Blair's new roadshow faces a bumpy path

Empty rhetoric of welfare reform

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Tonight Tony Blair opens his great welfare reform roadshow, designed to soothe Labour Party doubters. But how do you calm the nerves of the troops when the policy still isn't decided, nor even the basic principles thrashed out?

He will start with a list of scary statistics to make the flesh creep. In 1971 only 18p in the pounds went on welfare, now it's 30p. Horrors! That's why reform is essential, he'll say, with some stern stuff about his determination to see it through. This is a dangerously ill-judged approach, raising wild expectations on the right and deep fears on the left of some great cut. But there won't be. There will be sensible readjustment, redirecting small sums from those who don't need it to those who do. There is no crock of gold hiding inside the DSS, and we spend less than anyone in Europe.

Frank Field, Minister for Welfare Reform, will also be on his feet tonight at an altogether different gathering, part of his strange romance with the right. He will give the second annual Keith Joseph Memorial Lecture, the first having been delivered by the Baroness Thatcher, no less.

However, Field will say something which we should greet with a great sigh of relief. He will say there will be no Big Bang in welfare reform after all. Phew! For any Big Bang was bound to blow up in Labour's face. This is an about-turn for Field, who in an interview with me at the party conference said he was keeping his Green Paper under his hat because the policy was, in his own words "A Big Bang". It was to be a total philosophy of welfare, which is about as achievable as the Hitchhiker's Guide's "meaning of life, the universe and everything."

So Field's Green Paper has been taken away by Blair's new Cabinet Committee to be turned into a much needed practical list of sensible reforms ( as yet undecided). Harriet Harman is wisely talking of "radical evolution", gradually nipping and tucking from the better off and giving more to those with nothing.

But there are great dangers ahead and, as ever, they come from the Treasury. Gordon Brown threatens to inflict further damage, following his disastrous intransigence on lone parent cuts. Has he learned his lesson? There's no sign of it. Ominously and unusually, a top Treasury official has just been made head of the Department of Social Security.

Despite near universal criticism, Brown is still insisting on his daft Working Families Tax Credit. It will replace Family Credit, with no gain to anyone. However, the 300,000 wives who lose out will create a big fuss. He should be warned - although it's complex, the backbenchers will eventually get their mind round this. The danger is that many reforms will be of exactly that ilk - big rows for scant gain.

In attacking benefits wasted on the rich, Harriet Harman was absolutely right to propose an affluence test. But she was ill-advised to chose maternity benefit as an example, although the extreme Nicola Horlick case was tempting. For maternity benefit, as our Minister for Women should know, is not a benefit in the ordinary sense, but a working conditions equaliser between men and women. It guarantees that women, like men, will not be financially penalised for their biological function as child-bearer. Maybe the Employment budget should pay, maybe employers should bear the burden, but expect an explosion if this is simply cut. Of course the one-fifth of working women who get nothing deserve maternity rights too, but why is the only source of money from hard-won women's rights? What's more, it only saves a piffling pounds 50m. Is it really worth the fight?

Forty-four per cent of the DSS budget goes to pensioners. The right thing to do would be to declare that the well-off will lose the state pension in, say, fifteen years time. That's been ruled out; although like Norman Fowler's crucial reform of Serps, it should be done for the sake of the future. However, Labour will inch towards targeting increases on the poorest, not the richest, sensibly creating a growing two-tier pension system.

Real money could be saved in disability which takes up 25 per cent of the DSS budget, if the mystery could be solved of the six fold increase in claimants when there's no evidence of worse health. And should the rich get anything from the state for being sick? Fifteen per cent of disability benefit is paid to the top quarter richest people.

Some ground rules are emerging. First, no existing claimants, rich or poor, will have their benefits cut (which means savings will come in slowly.) Second, new cuts will not hit the poor: reforms will hit the better off. At a snail's pace, we shall move towards abolishing most benefits for those who don't need them. Child Benefit and it's possible taxation, will probably stay on the back burner for a bit.

But the longer and harder Blair looks at it, the clearer it will be to him that welfare reform is no gold mine. Trimming a few eccentricities won't save much. There is no crisis in welfare spending - the crisis in confidence is caused by the politicians, Blair included. Harriet Harman is not conducting a revolution, but simply doing what any minister in charge of so much money should do - weeding its herbaceous borders, pruning dead heads, and replanting the gaps. Essential if people are to trust that the money is well spent.

No, if Brown wants to get his hands on real money for his many urgent needs, he will have to eat a few of his own words. The hard choices are all his. He can't budge on income tax, but he could reneg on his word and raise pounds 5bn by lifting the ceiling on National Insurance contributions, making the rich pay according to their means. Instead of picking on, say, better off working mothers, he should cast his net equally among all the better off. He could make the self-employed pay their fair share of National Insurance. Money is there for the taking - but very little of it from welfare reform.

Tonight, Tony Blair should calm fears and lower expectations. Stop all this wild talk and put the subject away out of sight until it's been decided what to do. Then present the whole package with a clear and coherent theme - a redistributive message, but low key. No more stoking up expectation of a tiger, when a neat and sensible mouse is the more likely outcome.

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