Field returns to the fray in welfare reform row

THE SIMMERING row over the Government's welfare reforms erupted again last night when former social security minister, Frank Field, launched a searing attack on the Chancellor's plans to extend means testing.

Mr Field warned that Gordon Brown's proposal to introduce a working families' tax credit to help the poor would lead to a "spider's web of dishonesty and corruption".

The MP, who resigned from his post last week, claiming his own reforms had been blocked by Harriet Harman, said the proposals would result in employers and employees colluding to perpetrate benefit fraud.

Addressing the Social Market Foundation in London last night, he claimed Mr Brown's idea of replacing family credit with the new scheme was "fraught with great dangers".

The most immediate danger was large scale fraud, as employers could persuade staff that they would be entitled to the new benefit if they accepted low wages. The whole idea was a "fraud-determined minimum wage," he said.

"It strengthens employers' hold over working people - `these are the conditions, cheat and both of us will be better off'. It thereby pulls employees into a spider's web of dishonesty and corruption. It also rewards employers paying low wages and takes pressure off improving productivity."

The speech, which also attacked the Government's refusal to introduce compulsory pensions savings for those in work, re-ignited the controversy, just as ministers hoped it had died down. His decision to quit the Government sparked a week of mud-slinging, which saw him described as a "failed joke" while he, described the spin doctors who had attacked him as a "cancer" that ate away at the heart of Government. Mr Field told the meeting that the primary reason he had returned to the back benches was to campaign against the means-tested polices currently backed by the Government.

He said means testing was "the big divide" in the debate on welfare reform and the Chancellor's current plans relied too heavily on that policy. Means tests were a disincentive to work that penalised savings and forced people to become more dishonest about their finances.

"Yet work, savings and honesty are the cornerstones around which a thriving, prosperous and decent society are built," he said. Mr Field said that while he agreed in principle with Mr Brown's proposal to offer means-tested supplements to the elderly on income support, a failure to compel the public to have pension savings "would play havoc with the economy and wider society".

Echoing Mrs Thatcher's approach to the welfare state, he claimed a recognition of the importance of self-interest should be central to any reforms.

"The great driving force in practically all of us is self-interest. Self- interest has remained the golden thread linking together most of all human advances since time began," he said.

"Blaming society, or `them out there', for instance, to the total exoneration of one's own responsibility, is as inaccurate an analysis of the causes of poverty as it it is insulting to the individuals concerned.

"The role of politicians is not to deny self-interest. To do so is too dangerous for words. It is, rather, to capitalise on this great driving force in each of us."

Mr Field said that welfare reform should be much more long term, operating over a 30-year period, and reiterated his idea that new forms of private and public insurance were the key to real change.

He added that the public would not support the worthy idea of increasing benefits unless serious action was first taken to tackle widespread fraud, much of which he had seen when a minister.

"The debate is now joined and I look forward to participating fully in a wide-ranging and careful public debate," he concluded.