Our welfare system undermines the value of hard workby Frank Field / September 19, 2012 / Leave a comment
Protestors in Trafalgar Square (© Jess Hurd/reportdigital.co.uk)
The longer parties are in power the greater the difficulty they have in breaking free from their time in government—and their former policies—once they occupy the opposition benches. This rule is playing out with a particular vengeance in Labour’s welfare reform programme. Disengaging from the past is not made easier for Labour by the way that the coalition government has copied their welfare approach, tooth and claw.
Such a disengagement is crucial, though, if Labour is to become an effective opposition. It must do so to establish a wider electoral appeal and before the government’s approach fails. Now is the time for Labour to set out the principles that would underpin a new approach.
I always thought Gordon Brown’s aim was to replace welfare’s national insurance bedrock with a plethora of means tested tax credits. Iain Duncan Smith’s universal credit is the logical extension of Brown’s tax credit strategy, which was never more than means testing on speed. Both approaches are misguided.
William Beveridge, creator of the modern welfare state, initially included means testing in his national insurance system thinking that its importance would decline over time. This did not happen, but it was only during the first Wilson government in the 1960s that politicians accepted means testing would have a growing influence over welfare provision. Even then, hopes remained that an alternative approach would somehow emerge.
The universal credit—the sweeping up of six means tested benefits into a single payment—is almost the final destination of Gordon Brown’s tax credit journey. But there are two big problems.
First, it is doubtful that any government can deliver an information technology system that comes close to the expectations which will be placed upon it. With the exception of pension credit, I can think of no government IT scheme that has not turned out to be broken backed. One would have to be brave to put any political capital on the IT of the universal credit proving the grand exception to this dismal rule.
There is for me, however, an even bigger objection. Universal credit is incompatible with the values the public would wish to see thrive in the good society. Here it is important to go back to Beveridge’s first principles. December will mark the 70th anniversary of his great wartime report. Beveridge was part…