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The interim report describes five "pathways to poverty" - family breakdown, educational failure, economic dependence, indebtedness and addictions. It paints a bleak picture of a society which is "breaking down on the margins", and where the "social fabric of many communities is being stripped away".
The group - which has consulted more than 800 experts and organisations directly - is expected to propose specific policies when it delivers its final report next year.
Mr Duncan Smith insisted that Britons should be "ashamed" of the state some parts of country were in.
He said: "For some time I have been concerned about our reluctance as a nation to ask why the world’s fourth largest economy continues to have ever greater demands placed upon its social support system, the welfare state, during a period of unprecedented prosperity."
He insisted that benefit payments had "risen inexorably", by £22.7 billion between 1993/4 and 2005/6 - or £35.5 billion if tax credits were included. This was despite pledges from successive governments to get tough on fraudulent claims and tackle the root of social problems.
Pat McFadden, Labour’s Social Exclusion Minister, said the Tories had opposed measures to tackle poverty such as the minimum wage, maternity leave and flexible working.
"The truth is that, despite all of today’s rhetoric, the Tories are not offering one concrete policy proposal to help and support Britain’s hard-working families and to eradicate poverty.
"It is Labour that is taking action to support families, as last week’s announcement to extend child benefit entitlement to mothers-to-be demonstrates."
Matthew Taylor, the Liberal Democrat social exclusion spokesman, added: "Simply wishing for more families to stay together achieves nothing, whilst penalising the children of broken families would just make social exclusion and relative poverty even worse.
"The Conservative’s document is high on moral tone but offers nothing to help real families in Britain today."
Ian Kearns, the deputy director of left-of-centre thinktank the Institute for Public Policy Research, said that family breakdown was one of many issues that led to social problems.
"To be convincing on social justice, Cameron’s Conservatives need to set out a wide-ranging package of policies dealing with job creation, poverty reduction and the issue of work-life balance. Even on the issue of family breakdown, it is naive to think that support for marriage will be an effective response.
"Cultural change and underlying social trends mean a more complex pattern of relationships is here to stay and we need to work with the grain of this reality.
"Public policy needs to focus on relationship and parenting support services for a wide range of relationships, including but not limited to marriage."
Chris Pond, chief executive of campaigning group One Parent Families, welcomed the report’s recognition that lone parenthood was "rarely a lifestyle choice".
"But lone parents will reserve judgment on whether the Conservative Party’s war against them is over until they see policies for tackling low income and deprivation, whatever the family type," he added.
"Conservative proposals to favour couples through the tax system suggest there is still an appetite within the party for measures that would do little to tackle poverty, while running the risk of stigmatising lone parents and their children."
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