A "why bother?" economy has been created in Britain which has left thousands with no motivation to work, a report published today concludes.
Successive governments have encouraged a welfare culture that has left every family facing a £1,300 bill because the poor stay poor, it claims.
The findings by the public services think tank Reform suggest that increased welfare dependency has made it more difficult for those on the lowest incomes to do better.
An education system with a "dismal record" of educating the poorest, and a complex welfare system, have together created a far more divided society than other European countries, it finds.
Means-tested benefits and higher taxes have reduced the incentives available to those on low incomes to better themselves, Reform says.
It concludes: "The unintended consequence has been a 'why bother?' economy in which a significant minority do not have the capability or motivation to succeed."