Benefits Street proves my reforms are right, says Iain Duncan Smith Mr Duncan Smith: Everyone should be part of Britain's improving economy New £26,000-a-year cap on benefits encourages people to work, MP claims Surge in number of people finding employment, official figures show Employment at a record 30.15million after the biggest ever quarterly jump Change: Iain Duncan Smith, pictured, said the benefits system has created welfare 'ghettoes' Middle-class families have been shocked by the reality of the "twilight world" of Britain's welfare "ghettoes," Iain Duncan Smith will say today. In a clear reference to the Channel 4 documentary Benefits Street, the Work and Pensions Secretary will say that under Labour the "middle-class majority were largely unaware of the true nature of life on some of our estates." "Even now, for the most part, they remain out of sight - meaning people are shocked if and when they are confronted with the reality," Mr Duncan Smith will add. The Channel 4 programme about the lives of benefit claimants on a Birmingham street has provoked a fierce debate about the welfare state. Mr Duncan Smith will today argue that Britain "will only be great again if all in our society are part of our economic recovery and growth." Signalling further welfare reforms that will be central to the Conservative election manifesto, he will also caution colleagues that "casual disapproval of those on benefits is too easy," pointing out that generations of politicians created the system that now traps claimants. Yesterday, the Bank of England gave an unusual endorsement of the Government's claim that its reforms - including a new £26,000-a-year cap on benefits paid to any one household - are encouraging people to get work. With official figures showing employment at a record 30.15million after the biggest ever quarterly increase, the Bank said: "A tightening in the eligibility requirements for some state benefits might also have led to an intensification of job search." Speaking yesterday, Mr Duncan Smith described the jobs figures as extraordinary. "I believe the welfare reforms this Government has introduced - including, like the Bank of England mentioned, the tightening in the eligibility requirements for some state benefits - have contributed to this positive labour market story," he said. Controversial: The Channel 4 programme Benefits Street has provoked a fierce debate about the welfare state The long-term economic plan and the reforms we've introduced are playing an important part in helping people off benefits and into work. The road in Benefits Street was named after a teacher who only had one day off work in 46 years. James Turner taught at nearby King Edward's School in Edgbaston. The street was dedicated to him by a former pupil in 1882. Local archivist Alison Wheatley said: "He was a very hard working and well respected man. He only had a day off at the end of his career when he retired from ill health after contracting influenza. In a speech in London today to mark the tenth anniversary of the Centre for Social Justice, the think tank he set up in opposition, Mr Duncan Smith will insist that the Tories "would have wanted to reform the welfare state even if we had no deficit." "As Conservatives, we should hate the idea of people with unfulfilled potential languishing on welfare," he will say. Welfare reform is fundamentally about opportunity and life change, cutting the cost of social failure by transforming the life chances and outcomes of those on benefits - restoring fiscal stability, and restoring lives at the same time. He believes millions were left locked in a life of dependency with "no incentive to aspire for a better life." In the worst cases, the current system "makes criminals out of those trapped in its clutches" as people choose to work in the "shadow economy" because they fear benefits being withdrawn if they do so legitimately. Welfare 'ghettoes': Police Community Support Officers patrol along James Turner Street in Birmingham which was the focus of a Channel 4 series Benefits Street Under Labour, despite the economic boom and a 60 per cent increase in welfare spending, income inequality was the worst for a generation, Mr Duncan Smith will add. "In neighbourhoods blighted by worklessness, where gangs were prevalent, debt and drugs the norm, families broken down, those living there had one thing in common; they were for the most part dependent on the state for their daily needs," he will say. For too long we let these problems be ghettoised as though they were a different country. The welfare system became "distorted" and was too often an entrapment rather than the safety net it was intended to be. "And at its very worst, the present system makes criminals out of those trapped in its clutches," he will say. Faced with losing up to 94 pence of every pound they earn because of how benefits are withdrawn, too many end up in the shadow economy or working cash in hand. Such behaviour can never be condoned, but it is a tragic state of affairs - and a mark of how far the current system has failed - that people should feel pushed into crime by having their aspirations to make a living penalised. Surely the system should deliver for people who want to work hard and play by the rules. The star of Benefits Street rang Nick Clegg yesterday - and revealed that she was a Labour supporter. But "White Dee," the self-styled "mum" of the Birmingham street, pictured below, said she might be persuaded to back the Liberal Democrats. Dee - real name Deirdre Kelly - rang Mr Clegg's radio phone-in show to ask if he thought the documentary was a "fair reflection" of people on benefits. The Deputy Prime Minister admitted he had not watched the Channel 4 series yet, but was committed to reforming welfare. After she told him she was "very into politics" and always voted, the 42-year-old told Mr Clegg: "The last time I voted it was Labour because I was really annoyed when you went into coalition with the Tories. But hey-ho, you can win me back, Mr Clegg. Miss Kelly later confirmed she had voted Labour in a local election. She goes by the name "White Dee" to distinguish her from a neighbour "Black Dee," whose real name is Samora Roberts. Yesterday she invited Mr Clegg, pictured below, to visit the residents of James Turner Street after calling his show Call Clegg on LBC radio. "He would see a very clean street," she said. The series, set to run for another two weeks, saw 5.2million tuning in to Monday's episode - but it has attracted more than 900 complaints after featuring scenes of shoplifting, jokes about fiddling benefits and growing cannabis. In one episode Miss Kelly is shown using her knowledge of the welfare system to help her neighbours, of which 75 per cent are said to be on benefits, to negotiate the Government's new welfare tests. But she told The Lib Dem leader the show's stars were "shocked" by how they had been portrayed because they thought it was "a documentary about community spirit." "I think it's very cleverly edited," she added. Mr Clegg told Miss Kelly that ministers had to be "hard headed" over welfare but warned against "demonising" those on benefits. "Receiving help from the generosity of others shouldn't be a permanent way of life, and that the incentive to work is the most important one of all," he said.