Major gears up for assault on welfare culture

COLIN BROWN

Chief Political Correspondent

A switch from state benefits to private insurance for unemployment, sickness and care in old age will be proposed by John Major at a special Cabinet meeting to give the Tories a new agenda for the next election.

Reducing dependency on the welfare state is one of Mr Major's priorities for the agenda for the "next phase of Conservatism". It will be proposed at the Cabinet meeting called for Thursday by the Prime Minister at Chequers to review strategy for the election.

The plans go beyond trimming the social security budget and will seek a "change of culture", senior Conservative Party sources said yesterday.

The aim will be to persuade more people to take out private insurance for redundancy, sickness or long-term care in old age. They will not be allowed to opt out of tax payments and Tory commitments to fund the National Health Service and state pensions from taxation will not be touched.

There are plans to abolish the one-parent benefit, worth pounds 6.30 a week for new claimants, in an attempt to persuade more women in the future to choose not to have a baby until they are sure of financial support. It will not affect existing claimants, but over the long term it will reduce costs as part of what the Conservatives say is a drive to change welfare into a system which encourages, rather than discourages, people to take work.

"It is about the balance between people in work and the population on welfare. The social security budget has ballooned and unless we do something about it, it will become unbearable without raising more taxes in the medium term. The Prime Minister wants to get a change in culture in the way that people approach life and how they provide for themselves," the sources said.

Each Cabinet minister was asked to come up with ideas which the Tories can use to relaunch their appeal to the voters, as part of a strategy paper, Building a Forward-looking Policy Agenda. The initial results will form the basis of a series of ministerial announcements at the party conference.

Mr Major begins the campaign with a speech at Birmingham tomorrow with a heavily trailed boost for grant-maintained schools, which is expected to include greater freedom to select pupils on entry.

The Home Secretary, Michael Howard, will go to Thursday's Cabinet meeting with plans for a voluntary identity card. To persuade people to take it up, he is planning to make it part of the driving licence.

Sir Norman Fowler, the former party chairman, is urging the Cabinet to do more to boost the housing market, with measures for first-time buyers. It would be "a great mistake" if the Chancellor failed to act in the next Budget, Sir Norman, who is chairman of the National Housebuilding Council, said. Sir Norman proposes increasing the rate of mortgage relief to 25 per cent and the Miras threshold to about pounds 40,000 for first-time buyers.