In rebuilding the welfare state to enable ‘Work for those who can, security for those who cannot’ (DSS, 1998), New Labour saw the need for a radical joined-up strategy in order to include disabled people in the general policy shift towards work. The central elements of the new government's overall reform strategy for long-term sick and disabled people were active tailored help and encouragement for those who want to move into work; removing disincentives in the benefit rules and system; ensuring that work pays, and tackling discrimination and promoting change in the workplace. Thornton (2000) has discussed the strengths and weaknesses of these elements, and some of the inconsistencies and issues still to be resolved.

Within this broad programme of welfare reform, New Labour also sought reduction in expenditure on incapacity benefits (DSS, 1998). Despite reforms designed to tighten access to the main contributory benefit in 1995, the number of working-age recipients of Incapacity Benefit had continued to climb. There was a sharp reduction in the number of new recipients but a lengthening average duration of claim (Kemp and Thornton, forthcoming). Thus, embedded within policies to reduce poverty and social exclusion lay determination to move some current recipients off Incapacity Benefit; to tighten access for new potential recipients by changes in the rules, and to offer advice and services to help people take routes other than those leading to long-term benefit receipt.

There was considerable challenge here for the new government, whose guiding principle for support for disabled people within the philosophy of ‘welfare to work’ was that, “Those who are disabled should get the support they need to lead a fulfilling life with dignity” (DSS, 1998, p 2). Any tightening of access to incapacity benefits would be highly sensitive. Experience of the earlier Benefits Integrity Project showed the strength of feeling against social security developments perceived as ‘an attack on disabled people’ (Drake, 2000). There were also increasing concerns about the deepening of inequality. It would be important that any benefit changes designed to encourage disabled people to do paid work were seen quickly to lead to positive outcomes.

Fundamental changes were required to achieve a benefits system that encouraged paid work.