With this government, keep your eye on the reality not the rhetoric

Three cheers for a sensible welfare reform, but let the Government not pretend it is more daring than it is
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The Independent Culture
NO ONE could accuse the Government of rushing into welfare reform. Tomorrow the Social Security Secretary, Alistair Darling, will publish with a flourish his pensions Green Paper. The proposals have been a long time coming, and will be more modest than the former Social Security Minister Frank Field would have liked. But in their practical modesty they will provide the clearest indication yet of what the Government has decided it means by the "modernisation" of the Welfare State.

It seems like an age since Field launched his welfare reform Green Paper to an even bigger fanfare than that which will accompany Darling around the television and radio studios this week. For a government that never knowingly undersells any initiative, Field's welfare reform Green Paper was the most over-hyped event since the election. Rather cleverly, the impression was given that the welfare bullet had been bitten, and a series of radical measures were soon to be implemented. The degree to which this was very much a preliminary opening in the welfare debate became clear in the summer. The departure of Field in July caused only a political ripple. His exit from the DSS did not send the reforms off course, as they were on no course to be sent off from.

When Darling moved into the Department of Social Security after the Cabinet reshuffle he did not find endless controversial policies requiring urgent amendment. He found virtually no polices at all.

So far, the Government has been the victim of its own hype, its confused objectives and the sheer, nightmarishly logistic challenge of reforming the Welfare State. As far as they go, the welfare reforms implemented have been important and valuable improvements. Three cheers for the minimum wage, welfare to work, changes to the working families' tax credit and the other items on a long list that ministers recite when they are challenged about welfare reform.

There is nothing wrong with the list. It is the disparity between its contents and the apparent ambition which is the source of the problem. For a long time, Tony Blair, the most focused of prime ministers on other big issues, and with a clear sense of long-term objectives, did not appear to know what he wanted from welfare.

Field's appointment after the election reflected the importance Blair attaches to political symbolism. His departure reflected Blair's wariness of the practical consequences arising from symbolic acts. In between coming and going, Field attempted to adapt his well known radical policies to what he took to be the pragmatic demands of the Treasury, which meant they were neither especially practical, nor coherent.

Meanwhile Harriet Harman became sucked into the more mundane rigours of a public spending review that was under pressure to show that the Government could live up to its pre-election pledges to transfer some welfare expenditure into education and health. Simultaneously, several other departments were exploring housing benefit reform and other employment measures uncertain of objective. It is no surprise that a year ago this week the Government suffered a revolt over cuts in single parent benefit. It is a miracle that there were not more cock-ups early on.

I doubt there will be any cock-ups from now on. Instead, incremental reforms rather than big bangs will be the order of the day. The stakeholder pension which Darling will unveil (in fact, he will hardly unveil it, as the ideas have been around for at least a year in the form of a stakeholder's pension booklet produced by the Junior Social Security Minister, John Denham) will encourage those on low incomes to take out a second pension without compelling them to do so. There will be incentives and warnings of penalties for those who do not.

Field supported a compulsory stakeholder scheme, involving redistribution from rich to poor by forcing the well-off to subsidise contributions of those on low incomes. Not surprisingly, the more the pensions' web was explored, the more complicated it became. A compulsory system would have produced odd consequences, proving a poor return, for example, for those earning less than pounds 9,000 a year who would still have had to rely on state hand-outs when they retired.

Darling's stakeholder pension can be introduced without causing a great political storm, and will result in more people on low incomes becoming aware of the need for a second pension, while making it much easier for them to get one. Again, three cheers for a sensible reform, but let the Government not pretend that it is more radical and daring than it really is.

Let us have less of the distorting glitter: welfare roadshows embarked on before policies had been decided; prime-ministerial speeches made on a council estate, yet devoid of substance; welfare reform Green Papers promising yet more Green Papers. All have given the impression that something dramatic was about to happen. Instead, ministers should acknowledge that they are attempting something more incremental than the presentation has often implied.

This does not mean that Darling is doomed to become a reincarnation of Peter Lilley, who chipped away at social security spending, and got a cheer at his annual party conference each year when he proposed new measures to tackle fraud. The proposals were usually accompanied by a verse, which he sang badly. The cheers got louder on each reappearance, his audience conveniently ignoring that the same promises had been made the year before.The end was nigh for Field when, weeks before being sacked, he announced, Lilley-like, "dramatic" policies to attack fraud.

Darling is working to a set of three progressive principles, rather than imposing savings here and there. They are worth repeating, because they get lost in the hype:

l There should be employment opportunities for all

l Work should pay.

l Provision should be made for those who are "incapable of work"

The principles were hammered out while he was still at the Treasury, although that does not mean Gordon Brown has taken over the welfare review. Indeed, some of Darling's former colleagues in the Treasury fear he has gone native. "He looks as if he is acting tough, but really he's still asking for a lot more money," observed one. In other words, do not expect the social security budget to fall as the Government improves, rather than radically overhauls, the welfare state.

Practical reforms within a social security budget that is likely to go up a little rather than down is no bad outcome, as long as ministers admit that is their aim. Any more over-hyped rhetoric will be a sign that they still have no confidence in what they are doing. If Darling sings a song at the next party conference and singles out cutting fraud as his main objective, we shall know that he has failed.

The author is political editor of the `New Statesman'