The coalition government came to power in the wake of the inconclusive May 6 general election, which saw no party win enough support to form a government by itself and which led to the right- wing Conservatives and left-of-center Liberal Democrats joining forces to end 13 years of Labor party rule.

The majority Conservatives had campaigned on immediately tackling the near-record public spending deficit, currently 156 billion pounds (about 251.3 billion U.S. dollars) for 2010-11, through cuts and tax increases.

Chancellor of the exchequer George Osborne, the finance minister, introduced the most drastic cuts in government spending since the Second World War in October.

Osborne said that billions would be cut off the welfare bill. Since 1997, the welfare budget has risen by more than 40 percent in real terms from 63 billion pounds (about 102 billion U.S. dollars) to 87 billion pounds, well over twice the military budget.

If the government wants to succeed in hitting its target of cutting 81 billion pounds (about 140 billion U.S. dollars) from public spending by 2015, then welfare spending must be reduced substantially. If it fails to get welfare reform right, it could pay a heavy political price.

The official government opposition, the Labor party, cautiously welcomed the reform.

Douglas Alexander, shadow work and pensions secretary, said "If the Conservative government gets this change right, then we in the Labor party will support them, because there's common ground. If we can have a simpler benefits system that removes disincentives for people to get into work, we will support them."

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