Tough New York Welfare Scheme for Uk

A tough American welfare program, which links payments to performance by low paid workers, is to be introduced in Britain. Gordon Brown backed the initiative, Opportunity NYC, which is to be renamed Contracts out of Poverty in Britain, when he met New York's mayor, Michael Bloomberg, yesterday.

Brown, who modeled many of his welfare reforms as chancellor on US initiatives, sees the New York scheme as a powerful tool to help people out of poverty.

The cost of training and extra payments to children will be withheld if participants fail to turn up to work or fail to meet targets. "The key idea is to introduce incentives," a government source said. Brown has long looked to the US for ideas on welfare reform. His tax credits, which have recently been under attack for the abolition of the 10p starting tax rate, were modeled on reforms introduced by Bill Clinton in the early 1990s.

A government source said: "The new system builds on tax credits. They will still be there for people who take part in this program. But they are paid regardless of performance. Under Contracts out of Poverty, some payments will be linked to performance." Alistair Darling, the chancellor, announced more than £100m in support for the program in last month's budget. But Brown's decision to endorse it in such a high-profile manner in New York may add to unease among labor backbenchers who are threatening to rebel against the abolition of the 10p rate.