Jeremy Hunt has announced a major crackdown on benefits claimants, as part of a new drive to get people back into work.
The move will cut the taxpayers' benefits' bill, creating more room for tax cuts.
The changes, which involve significant alterations to universal credit, would see benefits recipients stripped of all support if they don't meet certain conditions.
The Back to Work plan, announced as part of the Autumn Statement, is meant to "help people stay healthy, get off benefits and move into work”.
WATCH: Hunt delivers his Autumn Statement to the House of Commons
The Government has claimed the scheme will "help up to 1,100,000 people with long-term health conditions, disabilities or long-term unemployment to look for and stay in work".
It will expand key health and employment programmes, including NHS Talking Therapies, Restart, and Universal Support in a bid to get people off benefits and into work.
But the Department for Work and Pensions will also introduce "tougher sanctions for people who don’t look for work, as part of the next generation of welfare reforms".
WATCH: Jeremy Hunt takes a swipe at Rachel Reeves
Hunt said the Government will “ask for something in return” when providing a further £1.3 billion of funding to help 300,000 people who have been unemployed for over a year.
He said: “If after 18 months of intensive support jobseekers have not found a job, we will roll out a programme requiring them to take part in a mandatory work placement to increase their skills and improve their employability.
"And if they choose not to engage with the work search process for six months, we will close their case and stop their benefits.
“Taken together with the labour supply measures I announced in the spring, the OBR says we will increase the number of people in work by around 200,000 at the end of the forecast period, permanently increasing the size of the economy.
“I know some on the benches opposite would prefer to fill those vacancies in a different way. They hanker after a more liberal immigration regime or even dream of bringing back free movement.
"But Conservatives say we should unlock the potential we have right here at home, which we do with the biggest set of welfare reforms in a decade in today’s autumn statement for growth.”
Shadow Chancellor Rachel Reeves said working families have been “skating on thin ice for too long”
PA
But hitting back at his statement, Shadow Chancellor Rachel Reeves said working families have been “skating on thin ice for too long”.
Speaking in the Commons, she said: “The Chancellor and the Prime Minister say that the cost of living crisis is dealt with, now everything might look a little bit better 10,000 feet up in your helicopter, but down here on planet Earth people are approaching Christmas and the year ahead with worry and trepidation.
“The cost-of-living crisis has hit us harder because Tory mismanagement has left us so exposed, 11 million UK households don’t have enough savings to cover three weeks of living expenses if they needed it.
“Working families have been skating on thin ice for too long and as their resilience has been eroded, so has our national economy.”
