LETTER:Lessons Labour should recall

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From Ms Jean Corston, MP

Sir: Frank Field criticises our colleague Roy Hattersley for not being modern enough in the anti-poverty strategy he advocates for the next Labour government ("Poverty, but not as you know it, Roy", 18 August). He tells Roy to look forward to the new millennium, not backwards to what he describes as the "no longer relevant" approaches of the Thirties or the Sixties.

The irony is that Frank then proceeds to take refuge in the 19th century and ignores national institutions bequeathed by successive Labour governments to deal with problems all too similar to those of today, and which remain very popular, as a basis for future advance.

So, Frank writes yet again about the "culture of dependency", the effects of benefits systems "on people's characters", and how means-tested welfare teaches people at best how to "work the system" and at worst to commit fraud.

He writes as if all this was new, but it is precisely what Victorian moralists had to say about poor relief. Many were the "New Right" of their century, who failed to relate the causes of poverty to class, wealth and profit. In his proposal for "universal private pensions", Frank also forgets the lessons that were learned by the leading industrial nations 100 years ago about the limitations of private insurance. Fine for the well-off - if they remained well-off and had no alternative but to bear the exceptionally high administrative costs of that "commodity". Meaningless for the low- paid, and against the common risks of ill health, severe disability and unemployment. And it is all so inefficient, like means-tested as opposed to universal benefits.

At present, it costs 60p per recipient per week to administer the state retirement pension and a staggering pounds 5.45 per recipient per week to administer means-tested income support.The administration costs of private insurance are even higher than for income support. A universal national insurance system is economically efficient, as well as socially just.

Frank goes on to say that his National Insurance Corporation "must be run by the punters" and must result in individuals owning their own pension capital. He has chaired the Social Security Select Committee during the period of the Goode Report, and knows that ownership and control of pension funds is a myth, when subject to the law of trust and the fiduciary duty of trustees.

The challenge for a Labour government is the reformulation of the strengths of the public sector. Roy Hattersley was doing just that, and at least his proposals can be quantified. In the face of the remorseless rise in poverty under the Tories, a system of national insurance as an adjunct to a buoyant economy, together with a public housing programme, will diminish homelessness, reduce unemployment and have a beneficial effect on the construction industry. It is a positive start. Frank Field, by contrast, invites us to step into yet another Tory trap.

Yours faithfully,

Jean Corston

MP for Bristol East (Lab)


21 August