Leading Article: Get the words right for a genuine welfare state

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What is this "radical reform of the welfare state" that the Prime Minister wants to be remembered for? Let us hope that Frank Field, his bold choice as Minister of State for Social Security, will tell us more in his speech tomorrow.

The trouble with "radical", one of Tony Blair's favourite words, is that he uses it because it is a feel-good, all-purpose word with no distinctive ideological markings, meaning only that he will not be afraid to take big decisions. But it is the kind of language that sets some people off on the wrong track. Bill Clinton found himself passing the right-wing ammunition to a Republican Congress with his similarly ambiguous slogan promising to "end welfare as we know it". As we report today on page 18, Robert Skidelsky, the Conservative peer, takes "radical" to mean pulling up the roots of the welfare state and starting again from first (neo-liberal) principles. He advocates the privatisation of unemployment insurance and the health and education services, with only a residual taxpayer-funded safety net.

That tired free-market vision is certainly not what Mr Blair and Mr Field have in mind when they use the word "radical". Back in your box, Lord Skidelsky. (A comfortable red-leather- padded box it is too, much in need of radical reform itself - but that is a subject for another time.)

No, Mr Blair seems to use the word in the sense of "going back to the roots of". He cites the Liberal government of 1906, which began the construction of the welfare state, and the Labour government of 1945, which completed it, as his models. Labour's thinking on the National Health Service may be unimaginative, but both Mr Blair's personal experience and his communitarian principles mean there can be no question but that it will remain a public service. So will education. That leaves social security. And here there is another problem of language: Labour's adoption of the Americanism "welfare".

Labour's key pledge is to get 250,000 young people "off benefit and into work", but this is often shortened to "Gordon Brown's welfare-to-work plan", which hardly makes sense at all. Not only that, the use of the alliterative w-word threatens to taint the welfare state as a whole - which enjoys substantial public support - with images of scrounging and fecklessness.

And the fundamental problem facing "radical" reformers of social security is that scrounging and fecklessness account for a small proportion of the total budget. Let us rehearse the facts, taken from an excellent citizens' guide to how the Government spends our money, called simply pounds 300 Billion, by Richard Cocks and Roger Bentley. Social security spending, pounds 100bn a year, accounts for one third of the total. Of this, more than pounds 40bn goes to pensioners, mostly in the form of the basic state pension, but also income support, housing benefit and disability benefits. The question is how to spread second pensions to all without forcing people to rely on sharks in the private pensions market. There is no scope here for saving public money even in the longest of terms, as Peter Lilley discovered during the election campaign.

Take out other sickness and disability benefits from the social security budget (pounds 20bn, and already squeezed by new tests) and we are left with just three main headings. Benefits for lone- parent families cost pounds 9bn, the registered unemployed cost about pounds 8bn and child benefit costs about pounds 7bn.

None of these totals can be reduced significantly in the short term. Maybe Harriet Harman can act on her rhetoric of helping lone parents get into work. Maybe Gordon Brown will take child benefit away from the better- off. But there is no sudden big pay-out from the Treasury fruit machine in either case.

Set against these figures, the highest estimate of the cost of fraud in the benefits system is pounds 2bn. This is a huge sum, and fraud is probably endemic in parts of the system, such as housing benefit. Frank Field is quite right to point to the incentives to fraud which are built in to the system. But the likely savings even from an urgent and bold restructuring are small in relation to the big picture.

The same applies to workfare, the other quick fix. Early evidence from the Tory government's trials suggests that a surprisingly high proportion of the unemployed will suddenly "find" work when invited to work on a public scheme in return for their benefit. This is the logical extension of Gordon Brown's four "offers you cannot refuse" to young unemployed people, and will no doubt be pursued with moralistic vigour by the new government. But for the plan to retain its moral authority, the training and work schemes must be of high quality and must pay more than benefits. Again, any savings will be relatively small.

However, both quick-fix approaches point in the right direction, and a redirection of the social security system could release large sums of money over time.

The welfare state should not be re-invented from scratch, but its moral basis could be rediscovered, and the whole ethos shifted from hand-outs expected as of right to active help in return for effort. But that means language is important. Let us hear less of radicalism and welfare. It is Mr Blair's strength that he can command a rhetoric of public morality and social cohesion which could make a modernised system make sense to everyone, and thus secure public support. It is time for him to talk about unemployment, sickness and old age with the same clarity and directness with which he talked about crime and the family when he came to the Labour leadership three years ago.

This would not be radicalism in the rootless sense of the word, but it could make a dramatic difference if the Labour Government remains in power long enough to follow it through.