A TOUGH new work test – expected to strip sickness benefits from 60,000 people across the region – shows the Government is “pro the North- East”, a minister said yesterday.

Steve Webb, a Liberal Democrat, urged MPs to recognise that the shake-up was trying to help huge numbers of people trapped on benefits and without any hope of a job.

The crackdown on incapacity benefit (IB) has sparked warnings that it will impoverish vast numbers of households, particularly in the North-East.

A study found that 20,000 North-East residents will be moved on to jobseeker’s allowance (JSA) – losing at least £25 a week – while another 35,000 will be pushed off benefits altogether, forced to rely on family for financial support.

During a Commons debate, Mr Webb said: “Our polices are pro the North-East, by helping people on IB and supporting them. It’s the longterm answer.”

However, Mr Webb, the benefits minister, ducked several challenges laid down by Grahame Morris, the Labour MP for Easington, who sponsored the debate, including:

• A jobs guarantee for anyone out of work for 12 months – alongside an obligation to take up the job;
• To confirm that private-sector jobs – as well as public-sector posts – are being lost in the North-East;
• To “ring fence” money lost to the region when benefits are slashed, for job-creation in the North-East.

During the debate, Mr Morris warned the looming benefit cuts would strip a staggering £170m from the North-East economy – enough to tip it into a regional recession.

And he added: “This is money that would be spent in local communities and taking it away will damage our regional economy further.

“There is a clear economic argument that unemployment would increase if benefits were cut in the region.

Simply, there would be less money being spent in the economy.”

Unemployment was soaring to levels not seen since the mid-Nineties, with 32,000 public sector jobs disappearing – exactly the same number created in London and the South- East, Mr Morris said.

A committee of MPs has criticised the tougher work test for spreading “fear and anxiety”, wrongly judging that sick and disabled people are fit for work – only for 40 per cent of appeals to be successful.

But Mr Webb argued that most aspects of the test – including retesting existing IB claimants and the requirement for those able to take part in work-related activity – had been pioneered by Labour.

And he rejected calls to delay until economic conditions improve, saying: “Even if we waited, the folk on IB would not be active participants in that labour market.”