Statistically, welfare fuels poverty. When you provide benefits, people come to rely on them. While I would agree that welfare programs are a valuable safety net, too often they are designed to provide too much and for too long and it becomes a vicious circle like we see across the Western world; both in social and economic contexts.
On the other hand... easing the tax burden increases consumer spending, which fuels hiring, which reduces poverty. But it does take time.
Britain is having an even harder time than the US in shaking the recession largely because such a huge amount of its budget is funneled into social programs which provide negative growth that it lacks the means to channel money into programs which can provide positive growth.
On one hand, welfare can never make the situation better. On the other, in order to improve the situation you have no choice but to make it worse for certain people.