Millions of benefit claimants will be forced back to work in the biggest shake-up of the welfare state for 60 years, ministers will announce.
Large parts of the benefits system are to be privatised, with companies hired to find jobs for the unemployed, The Daily Telegraph can disclose.
Private firms will be given incentives of up to £50,000 each to get people back to work and reduce the country's £12 billion annual incapacity benefit bill.Only last month, David Freud, the government adviser on whose recommendations the reforms are based, said he believed that up to 1.9 million of those claiming they are too sick to work could be found jobs.
In addition, hundreds of thousands of lone parents will face stiff requirements to find jobs or face losing their benefits, a move certain to infuriate Labour backbenchers.
People who refuse to co-operate and reject work interviews will have their benefits "sliced".
The proposals, to be announced by James Purnell, the Work and Pensions Secretary, represent the largest shake-up in the welfare state since it was established after the Second World War following the Beveridge Report of 1942.