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Labour - One Year On Wednesday, 29 April, 1998, 16:29 GMT 17:29 UK
Working for welfare reform
Niall Dickson
By the BBC's Social Affairs Editor, Niall Dickson

In opposition the Labour Party liked to think of itself as the party that would defend health and education against Tory attacks. But shortly after coming to power they decided to follow Tory plans and reduce lone parent benefit. Welfare to Work was announced as the centrepiece of Labour reforms. Work was stressed as the best form of welfare - but not the only one. The debate is bound to continue through out this session of Parliament. Niall Dickinson looks at the success of Labour's welfare policy.

The Labour government has set itself two overriding priorities - improved educational standards and welfare reform. Of the two, changing the benefits system and addressing issues such as poverty and social exclusion has always looked the more daunting.

Before the election many of New Labour's critics were sceptical, believing that the absence of detail on welfare reform signaled a lack of real commitment to bring about fundamental change.

Frank Field's appointment as Minister for Welfare Reform within 48 hours of Tony Blair entering Downing Street, and in advance of many cabinet ministers, was the first of many clues that the Prime Minister was serious about tackling a growing budget and a system that was not delivering what was intended.

The strategy on lone parents

One issue was to overshadow all others almost from the outset - the government's decision to go ahead with a Conservative plan to end lone parent benefit for new claimants.

Ministers always knew that the lone parent decision would be unpopular but they under-estimated the force of the opposition. The rather clumsy effort to sneak the announcement out on Gordon Brown's first budget day soon backfired ushering a campaign of growing anger and intensity.

From that moment on the government was always struggling to prove its good faith in this area. Any mention of reform was seen as a crude device to cut benefits, cut the social security bill and preserve its status with its new found friends in business and middle Britain.

The Social Security Secretary, Harriet Harman then produced her New Deal for Lone Parents. This helped, but only up to a point.

She won limited support from lone parent groups who have always seen work and adequate child care as the solution to their plight, but it did not diffuse the issue.

Labour backbenchers slowly woke up and found their voice, some pointing out that as the new measures were targeted at women with children of school age, the cuts should not apply to those with younger children. Logic was not on the government's side.

What was not apparent initially was the tension within the government as to how the cuts should be justified.

Only in the last few months has the argument changed again, and the 'difficult choices' line has been dropped. Now the decision is portrayed as a virtuous one ensuring that all families with children are treated equally, the pill sugared with extra help for all families especially those on low incomes.

In this year's Budget the Chancellor went further, recognising explicitly the dangers of appearing to force parents to sacrifice their caring roles in a headlong quest for work and careers.

Referring to his proposed increases in child benefit, he said: "it allows us to do more for mothers who choose to be at home, working at home bringing up their children."

The government has realised it must strike a balance between encouraging parents to go back to work and not being seen to deny help to those who choose to stay at home to look after their children.

Work is the best form of welfare

There is no confusion about the single idea that underpins just about everything the government does in this area. Work is good for you. Those who can, should work.

More people in work means fewer on benefit which means reduced social security costs, which in turn means more for health and education. It is apparently the ultimate win-win policy.

Yet how do you "encourage" people off benefit and into work? How do you differentiate between those who genuinely cannot work and those who do not want to?

In his March Green Paper Frank Field attempted to deal with these conundrums. The mantra now is work for those who can, security for those who cannot. Again, as a slogan it can hardly be faulted, the hard part is creating practical policies to realise the ambition behind the rhetoric.

In the case of the young unemployed, compulsion has been made explicit - staying in bed is not an option for the under 25s. For other groups, while the pressures may be more subtle, the message is essentially the same.

Strictly speaking, lone parents and disabled people will only be offered help, but over time the expectation will build up that if they can, then they should work.

Ministers have already said they want to reform the test for Incapacity Benefit, so that it measures what claimants can do rather than what they cannot. Disabled groups are likely to regard that as a device to deny benefit to those who need it.

And lest we forget, this entire programme assumes that there is work for these people to do. Some experts argue that even now when the economy is doing well, there are not enough 'real' jobs which can be performed by today's jobless and that even with some training, there may be no demand for their labour.

There lies another answered question - what will happen to welfare if the economy falters?

Work is not the only form of welfare

For more than half of those who depend on social security it will never be the answer. Most of the benefits budget is spent not on lone parents or feckless youths but on severely disabled and elderly people.

The government, which has no intention of restoring the link between pensions and earnings, has so far avoided head to head confrontation with pensioner groups and some of its own supporters by setting up a pensions review, due to report later this year.

It is likely the government will introduce a new second pension scheme aimed at the lower paid which, unlike the existing State Earnings Related Scheme, will create a fund for each individual and will be operated by the private sector.

Less clear is the future of the basic state pension, described in the Green paper as the foundation of provision in retirement.

The signs are that Labour will not go down the road of means-testing, partly because so long as the economy grows, the relative cost of basic pensions will fall anyway.

What is more, the government has already shown that it accepts the argument that targeting poorer pensioners alone will not always be enough. When increasing winter fuel payments, the decision was to boost the incomes of all elderly people.

The commitment to universal benefits which once characterised Labour's approach to welfare has not been abandoned entirely.

The debate continues

It has been a mixed year for the government's drive to reform welfare. The rows over disability and lone parent benefits have exposed the contradictions and confusions that lie behind some of the easy rhetoric.

However, as the Green Paper showed, in many areas the government has done little more than agree the principles for reform.

Time will reveal how far ministers are prepared to make hard choices which could deprive the middle classes of some of the benefits they now enjoy and which could put additional pressures on genuine claimants.

There are more unanswered questions - how will they make the workings of the Child Support Agency both more simple and more fair, how can they control the rising cost of housing benefit, how can they raise the standards of living of poorer pensioners without incurring huge extra costs?

If there ever was an intention to produce a big bang style reform that has now gone - the incremental change favoured by the Conservatives will be retained albeit with greater speed and clarity of purpose.

As the pile of unanswered questions shows when it comes to welfare reform, there is a world of difference between intent and delivery.

Links to more Labour - One Year On stories are at the foot of the page.

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