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Last Updated: Monday, 25 July 2005, 09:33 GMT 10:33 UK
David Laws on the welfare state
To mark 60 years of the 1945 welfare settlement, the BBC News website invited an array of politicians and social and business experts to debate the future of the welfare state.

David Laws is the Liberal Democrat work and pensions secretary.

The modern welfare state was born of the post war era 60 years ago.

David Laws

The prevailing political and social attitudes of the time saw the solution to the problems of want, disease, ignorance, squalor and idleness in the creation of state monopolies, paid for through public money.

The Victorian view in which poverty alleviation was largely the province of charitable and philanthropic organisations was swept away with an optimism in collectivism.

Sixty years later, the welfare state just about retains its founding principles but there have been many changes.

The idea of universalism is one founding principle that has faced substantial pressure in the last few years.

Instead of universal benefits that are largely flat-rate, the expansion of means-testing, or 'targeting' as New Labour prefer to call it, has led to the creation of benefits like Pension Credit and also tax credits.


The tax credits are near universal benefits directed at all but the richest 10% of families with children.

They are awarded on an annual basis after an assessment of income with more benefit going to those on the lowest incomes.

The government's policy wonks like to call this 'progressive universalism'.

The contributory principle is set to vanish in all but name. Contributory benefits like the like the basic state pension are slowly disappearing: the state pension withers away in value and the Pension Credit will spread means-testing to around four out of five pensioners in the future.

Incapacity benefit recently took on an element of means-testing and is soon to be reformed into a more work-focused benefit with rates and penalties designed to keep people looking for work.

'State monopoly'

The move towards a more laissez-faire state talked of and aimed at during the Thatcher years has been reversed and the state has expanded its role.

In the Blair/Brown era, the idea of a state monopoly has been tempered to some degree by greater involvement of the private and voluntary sectors.

But where they have been given a role within the social security system it lies in delivery of pre-determined welfare policies, mostly at the margins and where Government sees an opportunity to say it has cut back on 'waste'.

The modern welfare state is today firmly under the control and to the design of the Treasury under Gordon Brown.

It is not an ungenerous state, but to accept its help and support means submitting to intrusive means-tests and having your weekly budget micromanaged by huge IT projects and civil servants in call centres.

For many families this has caused much frustration, despair and mounting debt.

For pensioners, the experience is less chaotic, but the impact of mass means-testing pensioners looms over the working age population and makes self-reliance much more complicated and uncertain for the vast majority.

For Liberal Democrats, the future of welfare reform lies in returning to a simplified system, less reliant on means-testing and which offers a more effective guarantee of poverty alleviation while avoiding the complex, expensive and centralised system devised by Gordon Brown.


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