LETTER: Radical options for benefits

From Ms Patricia Hewitt

Sir: You are wrong to suggest that the Social Justice Commission proposed "more means testing and in-work benefits" ("Labour leaves the land of dreams", 23 May). We argued powerfully that the present government's policy of extending means tests will inevitably trap more families in poverty and unemployment and proposed instead - as Frank Field has also recently done - the replacement of means tests by a modernised social insurance system, offering individual benefits in return for individual contributions. We also proposed a universal second-tier pension built upon Serps or (as in Australia) upon a range of properly regulated occupational, industry and personal pension schemes.

As long as there are jobs which pay too little to support a family some in-work benefits will be required. But the present policy of extending in-work benefits while destroying the Wages Councils risks bankrupting the social security system as unscrupulous employers shift their wage costs on to the state. That is why we proposed a minimum wage, set after wide consultation at a level which will not risk job losses but which will safeguard employees and taxpayers alike.

The post-war welfare state was designed for a world in which most men were employed for 45 or 50 years and retirement lasted for perhaps 15 years. When employment, for both men and women, may last for only 30 or 35 years, and non-employment (for family responsibilities, further education and training, leisure or retirement) may take as many years, it is obvious that only radical measures will enable people to spread their earnings across increasingly varied life cycles. It is precisely such radical options that the Social Justice report offers.

Yours faithfully,

PATRICIA HEWITT

Deputy Chair

Commission on Social Justice

Institute for

Public Policy Research

London, WC2

23 May