Labour and necessity: Welfare reform? We really don't have any choice

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Tony Blair is right to stand firm on reforming welfare. Labour was elected to modernise Britain, not to defend the status quo. And just as Labour was trusted in 1945 to build the welfare state, now it is entrusted with its reform. As we have seen in recent weeks, some in Labour's ranks are uncomfortable with change. They always are. But we cannot afford to let them derail the reform that Tony Blair has rightly set in train. Those of us who remain committed to the welfare state know that there is no other option.

The simple truth is that our system of welfare does not work. It does not deliver help to those most in need. It does not help us fight the war on poverty. And it has lost sight of the values upon which it was founded. Responsibility, independence, dignity - values that guided the pioneers of the welfare state but values that have been dropped along the way.

Yes, some argue that values are less important than the amount of money we spend. They believe more money equals a better welfare state. They are wrong. The Conservatives increased welfare spending. They also increased the number of people living in poverty. Labour will do better.

And we should not forget the implications of the costs of welfare. Those who demand more spending appear to live in a world in which money does indeed grow on trees. The rest of us do not have that luxury. We spend pounds 100bn a year on welfare - six times as much as we do on education. Welfare takes a third of all public spending. And as welfare bills rise, we watch our schools crumble, our public transport grind to a halt and our hospitals struggle to survive. The cost of welfare makes it impossible to prioritise spending across he range of government departments.

Nor are people prepared to pay more for a system that does not work. Each working day, every ordinary working man and woman pays pounds 14 to fund the aspirations of the advocates of higher welfare spending. But they are often left out of the debate. They should not be taken for granted.

For most working people know that the system is abused, albeit by a minority. And just as people in genuine need have the right to help, working people have the right to expect that the system they fund is in working order. They understand the need for reform. That is why so many returned to Labour, because Labour had stopped defending what clearly did not work.

Yes, reform means facing difficult decisions. But if Labour is serious about modernising welfare - and I believe it is - there can be no excuse for ducking them. And yes, change is unsettling. But change becomes hope if reform is explained, if people understand that it will bring a brighter future. It requires both courage and compassion. The two are not mutually exclusive.

But Britain is not alone in adapting welfare to present-day needs. Around the world, industrialised nations are coming to terms with profound economic and social change. Even Sweden, where at one time three-quarters of the population were net recipients of welfare, is embarking on reform. Sweden, like other nations, knows that it cannot let welfare spending spiral further out-of-control.

Why? Because like Britain, nations across the world understand that high welfare spending can be an obstacle to long-term competitiveness. Some of our European partners know to their cost that high social costs lead in part to high unemployment. If Britain is to survive and prosper, both public spending and taxation must be kept in check. Global capital, international competition, multinational companies - all leave us with no option.

So let us have a debate about welfare. Let us discuss how best we can reform it to help people into work, to help those in genuine need, to encourage competitiveness and investment in Britain. But let's not waste time deciding whether reform is necessary. The people decided on 1 May that they wanted a modernising government. Labour made clear then that it would reform welfare. It is up to all of us to help it achieve its aims.

The writer is General Secretary of the Amalgamated Engineering and Electrical Union.

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