Income inequality will return to near the levels seen before the recession as welfare cuts bite, a respected economic think tank has said.
The gap between rich and poor had narrowed as middle and high earners faced a wage squeeze between 2009 and 2012, the Institute for Fiscal Studies (IFS) said.
But inequality will almost reach its pre-recession levels by 2015/16 as poorer parts of society feel the effects of cuts to benefits and tax credits, according to the IFS.
The minister for disabled people and Tory MP for Wirral West, Esther McVey, said changes to the benefit system are about "understanding disability in the 21st century" and adapting a system which will work better in the future.
The MP said the new scheme is not aimed at saving money.
- The personal independence payment scheme is being introduced for people with a health condition or disability aged 16 to 64.
- From today, it will be introduced for new claims in Merseyside, North West England, Cumbria, Cheshire and North East England. It will be rolled out nationally from June.
- Currently, there are no current plans to replace Disability Living Allowance (DLA) for children under 16 and people aged 65 and over who are already receiving it.
- Some people may require an assessment to work out the level of help needed.
- Most people currently getting DLA will not by affected by the change until 2015, according to the government.
Daily Telegraph reporter Matthew Holehouse says David Cameron will tackle criticism of his welfare reform bill head-on.