PM warned over vulnerable families

Entrepreneur Emma Harrison was tasked by the Prime Minister in December 2010 to lead efforts to return hundreds of individuals from troubled families to employment.

But the founder of employment contractor A4E, which has many welfare contracts with the Government, cautioned that the proposed £26,000 annual limit could be too crude a tool.

While she accepted the need for reform, she told BBC Radio 5 Live's Pienaar's Politics she was concerned parents of severely disabled children could lose out.

"I'm just a little worried by the extremely vulnerable families who could be caught by a populist movement," she said. "I think that in all big policies that there are going to be people who are going to be trapped, and I think we need to be really, really careful we don't catch the wrong people."

Asked what her message to the Government was, she said: "You know, we live in this amazing country. It's a civilised country and let's not harm the most vulnerable people in this country."

Ministers have vowed to press ahead with controversial welfare reform and last week overturned a series of amendments made to the legislation in a stormy passage through the House of Lords.

Among them, as well as the cap, was a bid by peers to limit cuts to top-up payments made to the parents of all but the most disabled children.

Ms Harrison said: "What I'm actually worried about is that, by having these sort of headline cap figures, there will be families who will be seriously vulnerable. I know families where they might have two or three very disabled children in one family. Their mum and dad are full-time carers. Everyone might say they're living on benefits, but ... if those children were in the state being cared for it would cost millions, so let's be really careful."

She went on: "Of course we should reform welfare. We should make it work for today. Somehow it has become possible for 120,000 families to live on benefits. Now within that group of families there might be a small percentage who will always have to live on benefits because of some very, very extreme circumstances."