In confronting the challenge of the coalition's proposals to create a single out-of-work benefit - outlined by Iain Duncan Smith during the summer recess - three things strike me as being imperative to our response.

Feeling the benefit

The first is to recognise that any changes are enormously complex and full of contradictions.

The road to hell is paved with good (and not so good) intentions. After all, Margaret Thatcher preached self-reliance and liberation from dependence on the state, while trapping millions of people in welfare dependency and increasing the bill for out-of-work benefits and the housing benefit trap.

The second is that simplification and fairness rarely go together. In 2005, as secretary of state for work and pensions, I looked seriously at a single out-of-work benefit to simplify the system. It wasn’t purely the intransigence of the Treasury – and, regrettably, the growing conservatism of the government – that blocked genuinely radical change. It was also the complexity of trying to ensure that those in greatest need were supported most effectively, while creating a system that provided incentives to be in work and stay in work, rather than to play the system and fall into dependency.

To ensure that fairness is seen to be paramount, it is essential to make benefit cheats and tax cheats part of the same continuum. Fraud or overpayment on the one hand and fraud or underpayment on the other should be dealt with as one.

Third, we must not fall into the trap of simply defending the status quo.

The welfare state which emerged after the second world war was based on earned entitlement. Its founders believed in self-reliance and liberating people from poverty, rather than merely ameliorating it and trapping them within the system.

We should therefore take proposals from Iain Duncan Smith on their merits – or otherwise. Quite simply, he understood before the general election that something over £3 billion would have to be temporarily invested in order to ensure genuine, long-term, radical change and improvement.

His difficulty is that, like all his coalition partners, he is trapped in an imperative. It is not to bring about improvement in the lives of those who have been the victims of successive recessions, but rather to cut as quickly and as deeply as possible.

It was regrettable that our own manifesto for the May election did not take a radical overview of how we could provide more effectively for those who need more, while retaining universality and avoiding even greater complexity and confusion.

If we haven’t learned that the electorate is deeply offended by cash transfers which appear to take from the nearly poor and modestly well-off only to recycle cash around the system, then we will have learned nothing.

So, if we want to advocate that it is tax and not benefits which should help rebalance income and expenditure, why not use the tax system itself?

Surely the arguments around the winter fuel allowance and returning to the original objective of child benefit could be resolved by simply retaining them as a universal right, but taxing them. In the case of child benefit, this would probably involve an adjustment upwards alongside adjustments to tax credits, which would help those at the bottom of the income bracket by making it more beneficial to be in work than to be unemployed.

This would help to reverse the effects of some of the more insane cutbacks in public services which are taking place, primarily in local government.

Work is the best form of welfare. That is what we should concentrate on – as well as promoting radical and extensive volunteering schemes. Not as a substitute for paid work, but as a programme put together by forward-thinking local government and as a challenge to our most profitable companies to show some semblance of social responsibility in David Cameron’s avowed ‘big society’. This is something that even an opposition can organise – if the will and energy exist to do it.

Above all, we must recognise that dependency is debilitating; and debilitation is what rightwing governments have always relied on to avoid an upsurge of anger and frustration as money to deliver public services – positive public expenditure – is transferred into the negative public expenditure of providing subsistence for those who have lost their jobs.

 

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