Leading article: Left and Right square up for a battle over poverty

Closer targeting of benefits may not be the solution to inequality

Paradoxically, since David Cameron became leader of the Conservative Party, it is the political right, rather than the left, that has made the running on questions of social cohesion and reducing poverty. This has had much to do with the work of Iain Duncan Smith, who has found a new mission in life from his work on "Breakdown Britain". And in taking up some of Mr Duncan Smith's ideas, Mr Cameron has had the advantage of not being in government. For the time being – though presumably, they hope, not beyond next summer – the Conservatives have the luxury of being able to explore a range of ideas without being asked why they are not implementing them.

Now, perhaps belatedly, though just in time for the coming election, the left is making an attempt to catch up. But a major forthcoming study, compiled by the Fabian Society and the Webb Memorial Trust, contains some uncomfortable conclusions. They will be uncomfortable for the Government in that they track a striking decline in the sense of social solidarity in Britain, even as their figures show inequality on the increase again. But they should also be uncomfortable for Mr Cameron and his Conservatives in that they call into question some of their most treasured tenets.

Chief among them is the idea that poverty can be reduced by less costly and more closely targeted – i.e. "smarter" – funding. This is not so, it says; experience abroad shows that poverty reduction is in inverse proportion to the narrowness of targeting. Benefits that are widely drawn, it finds, foster a sense of mutual responsibility, which is reduced the more they focus on particular categories of people. It says this is a mistake the Government has made, in an attempt to make the principle of redistribution more acceptable. But it is a mistake the Conservatives could exacerbate if they come in, intent on moving even further in that direction.

Now, of course, this is a study that comes from the political left, and quite a bit to the left, not just of where the Conservatives are now, but of where New Labour was, led by Tony Blair, and now by Gordon Brown. So its critical tone could be dismissed as only to be expected. Yet its broad conclusions ring true, as the effects are increasingly apparent all around us. They are: that inequality has started rising again, after a fall over the past 10 years; that, where poverty reduction is concerned, the public mood is considerably less sympathetic now to redistribution through the tax system, but especially through benefits; and that the next government will have to try something new, if the social state, and in particular the benefits system, are still to enjoy public support.

The authors of the report make clear that they favour something like the Nordic model, which is statist and expensive, but gives more people a stake in public spending. They also recommend a new social contract, under which benefit recipients would be required to do some socially useful work for their money. Whether British voters would accept this, brought up to expect relatively low taxation coupled with a comprehensive social safety net, however, is another matter.

Yet the future the report paints, of a return to "Victorian levels" of inequality and sharp social stratification by area, housing and employment, is a warning that deserves to be taken seriously. And whatever the merits of the case, this contribution from the left means that, at long last, something like an argument can now be had.