How to end the Welfare State: Through media manipulation, ministers prepared voters for what was once unthinkable

THE GRADUAL dismantling of the Welfare State, which began on Budget day, passed by unnoticed, judging by the lack of public outcry.

The response from organisations representing the disabled, unemployed and older people most affected was, in most cases, half-hearted.

While occasionally sipping the Chancellor's traditional glass of whisky, Kenneth Clarke had announced the deepest cuts in the social security benefits budget for some of the neediest groups; the people the welfare state was created to protect and who arouse public sympathy.

The pension age for women was to be raised from 60 to 65 starting in 2010; some 70,000 people a year who now qualify as physically or mentally disabled would lose invalidity benefit, and it would be taxed for new claimants; 90,000 unemployed people a year would lose all benefit, except their National Insurance contribution, after six months instead of a year - until their savings were spent.

Measures that only a year ago would have seemed unthinkable had become reality. But the usually vocal charities and pressure groups seemed resigned to their fate. They had been expecting the worst; the ground had been well prepared.

The media played a crucial role. Politicians would say newspapers and broadcasters stimulated debate. Others would say they were manipulated to soften up public opinion.

Over the past year, people have been led to expect cuts. Ministers have warned us the Welfare State can no longer be sustained if it continues to grow; because of the 'demographic time bomb', there will be fewer workers to support the pensioners; many people who claim invalidity benefit are not genuine invalids; many of the unemployed have no desire to work; foreigners are exploiting our benefits system; single mothers have babies to get council houses.

The development of the debate on Welfare State's future is a classic example of how the unthinkable becomes thinkable; ideas are floated to test public opinion and draw fire. Extreme proposals are aired in pamphlets by think tanks of the Left and Right.

The methods used to influence the media include 'lobby' lunches with ministers who cannot be named, with the source of the ensuing story disguised as 'sources close to' or 'senior ministers'; unattributable briefings by officials; and, above all, leaks.

Leaks take several forms: the genuine leak by a disenchanted insider; the deliberate leak to test the water; and, perhaps most mysterious, the accidental leak.

Stories about drastic cuts in invalidity benefit began with a leak to Donald Dewar, Labour's social security spokesman, in October 1992. Mr Dewar believes the document was a genuine leak but says he does not know the source.

The seven-page document, headed 'Policy in confidence, taxation of invalidity benefit', was a draft letter from Peter Lilley, Secretary of State for Social Services, to Stephen Dorrell, then Financial Secretary at the Treasury. It said 250,000 people would lose about pounds 15 a week in their net income. Mr Dewar leaked the document to the Guardian and the Daily Telegraph, whose stories provoked outraged responses from disability groups.

Last year's Autumn Statement did not contain any proposal for invalidity benefit and the Disability Alliance, among others, expressed relief.

The next 'leak' came in one of the most extraordinary episodes in the history of the Press Association, the national news agency which supplies almost every newspaper and broadcaster.

At 10.35am on 10 June this year, the fax machine in the PA newsroom in Fleet Street began printing pages and pages of what turned out to be several internal Whitehall reports and correspondence marked 'Policy in confidence, taxing of invalidity benefit'. The pile of papers included detailed proposals for taxing the benefit and reducing the number of people claiming it by introducing a tough medical test. They showed that discussions between Peter Lilley and Michael Portillo, the Chief Secretary, were at an advanced stage.

Staff at the Press Association were astonished, but delighted that someone had apparently leaked the papers to PA: leaks of sensitive Government documents normally are made only to newpapers.

As the PA began to run the story across the wires picked up by the media, everyone assumed the document was a leak. The Department of Social Security insisted it was an accident: the document was being faxed to its lawyers, who are on the same exchange as PA.

A DSS press officer said: 'It was a monumental cock- up.' But the documents contained the same report as had been leaked to Mr Dewar eight months earlier.

The pension age debate began with an official Government consulation paper, 'Options for Equality in State Pension Age', published in December 1991. The Trades Union Congress and Equal Opportunities Commission, among others, lobbied heavily for the pension age to be equalised for men and women at 60. But in August last year the Social Security Advisory Committee, which advises on proposed changes to benefit rules, recommended equalising it at 65 and using the pounds 3.3bn revenue raised to increase Income Support premiums for people aged over 55. (Mr Clarke's Budget ignored the latter recommendation.)

In December 1992, the Times ran an unsourced story saying 'social security ministers are convinced' the Government would raise the pension age for women to 65. A White Paper was expected in the summer of 1993.

In February a new think tank, the Social Market Foundation, published a pamphlet explaining why the pension age should rise to 65, and eventually to 67. It was written by David Willetts, Tory MP for Havant, a member of the Social Security Select Committee, and a former director of the Centre for Policy Studies, a right-wing think tank founded by Baroness Thatcher.

During March and April, newspapers began running stories saying 'senior sources' predicted and 'ministers believe' the age would be equalised at 65.

Soon after a lobby lunch in March, the Independent was told that the decision to equalise at 65 had been reached and would be rubber-stamped that night. But the meeting decided not to make the decision: the timing was bad because of the Newbury by-election in May. In April Ann Widdecombe, then a social security minister, gave the Independent an on-the-record interview saying that, because of the demographic changes, most countries were raising their state pension ages and it would cost pounds 3.3bn to lower the age to 60.

Reducing the amount of time people could claim unemployment benefit from 12 to six months was first mooted in unsourced stories in August 1992. It was suggested that Mr Portillo wanted the measure to save about pounds 500m a year.

The ground was being paved again in July this year: the Department of Employment published a press release saying that two out of every three people who claim unemployment benefit leave the dole queue within six months.

On November 3, the Daily Telegraph reported that Mr Lilley was looking at taxing invalidity benefit and added: 'Other possible savings include limiting the entitlement to unemployment benefit from a year to six months.'

The story re-surfaced in more detail on 21 November in the Independent on Sunday and the Sunday Times, apparently after lobby briefings.

Making employers pay the full cost of sick pay was bound to upset industry and the business community. The first time the idea was seriously proposed was in a February pamphlet called 'The Radical Agenda: Politics of Choice,' published by the right-wing Adam Smith Institute. It said the burden of statutory sick pay, 80 per cent of which the Government now reimburses, and industrial injuries benefit should be switched to employers.

The idea next appeared in the Independent on Sunday on 7 November when employers predicted such a change would be disastrous for smaller businesses. (The Chancellor appears to have listened: the Budget imposed the cost on larger companies only.)

Documents detailing the sick pay and other social security cuts were finally leaked to the Guardian on 15 November, then to the Observer which ran the story on its front page six days later. Cutting the pounds 8.9bn bill for housing subsidies, which are paid to 11 million people, was first mentioned as a possibility in the Daily Mail in February this year and emerged as a priority in the Financial Times in April. In June, officials from the Department of Social Security briefed the Social Security Advisory Committee, chaired by Sir Peter Barclay, that cuts to housing benefit and invalidity benefit were likely in the short term. Newspapers reported that cuts to housing benefits were expected and officials were said to be looking for ways to save money. The cuts announced in the Budget were for councils to stop paying benefit for 'unnecessarily expensive' properties and to people who entered Britain on the express understanding they would not be a burden on public funds.

The sharp increase in the cost of housing benefit was one reason used to justify the summer assault on single mothers. It began with a Daily Express front page headline - 'Curb on single mothers: ministers target spiralling pounds 5bn bill for benefits' - intensified the following day when John Redwood, Secretary of State for Wales, implied in a speech that single mothers should lose benefits if the father failed to take more responsibility for their upbringing.

Three days later, on 5 July, John Gummer, Secretary of State for the Environment, issued a statement announcing an inquiry into 'apparent' discrimination against two-parent families in allocating council homes. He suggested that more young mothers should be encouraged to live with their parents or in hostels.

The attacks continued at the Tory conference in October at which single mothers were blamed for problems ranging from rising crime to the public sector debt.

On 9 November, a document, headed 'Policy in confidence; lone parents', was leaked to Hilary Armstrong, Labour MP for Durham north- west, who passed it to the Guardian. Ministers were considering cutting benefits, making their parents financially liable for single mothers and requiring them to register for work. The Budget did not produce the much-predicted clampdown on lone parents. Nor did it include other fearedchanges such as extending VAT to newpapers, books and other items.

Other changes which have been floated during the year - such as taxing child benefit, taking pensions away from high earners, and making people take out private insurance to cover their income and mortgage in the event of unemployment or incapacity - also failed to materialise. But they are still on the agenda.

On 29 November, on the eve of the Budget, the Times carried an exclusive headlined 'Tories to abolish housing privileges of single parents'. The chief political correspondent wrote: 'Ministers are planning to house single mothers in blocks of flats and other buildings scheduled for demolition and redevelopment.'

All leaked documents to the Independent on Sunday please.

(Photograph omitted)