The welfare roadshow launched on 15th January at Dudley Town Hall is tapping into the deficiencies there undoubtedly are in the welfare state, not in order to mobilise public opinion to improve it, but to run it down. In his opening speech, Tony Blair claimed that Britain was split into ‘one nation trapped on benefits, the other paying for them.’
The Department of Social Security has produced Welfare Reform Focus Files, a series of documents which are intended as the basis for a Green Paper. A committee of senior government ministers has been set up, chaired by Tony Blair, which includes Gordon Brown, Harriet Harman, Frank Field, Frank Dobson, David Blunkett and Hilary Armstrong. However, the Government has indicated it will not be publishing any detailed proposals until after the case for restructuring is accepted.
This approach mirrors New Labour’s campaign against Clause IV, as Blair pointed out in his Dudley speech. Indeed, the Clause IV roadshow was also launched from the same venue in 1995. Also like Clause IV, the audiences were carefully selected and media presentation tightly controlled. Party members in Birmingham have reported that while invitations to the event were received two weeks in advance, the venue was only made known to them on the eve of the meeting.
January 15th marks a change in New Labour’s approach to the restructuring of the welfare state. Up till now, attacks have been targeted at specific benefits — the cut in lone parent benefit, the proposal to means-test or tax disability benefits, the withdrawal of maternity allowance, and so on. But with the possibility of mobilising very broad opposition on an issue by issue basis — as the Save Lone Parent Benefit campaign demonstrated — New Labour changed tack.
The roadshow represents an assault on the cornerstone of the post-war welfare state — universal provision of benefits and services, based on the principle of social insurance and paid for out of taxation. This is not, of course, to suggest that attacks on particular benefits won’t continue to take place. They will. The DSS focus files, for example, while stating “society has a responsibility to help people in genuine need, who are unable to look after themselves”, emphasise that “individuals have a responsibility to provide for themselves”. This is reminiscent of the USA where security against unemployment, ill health and old age resides in the private domain; the responsibility of the individual and welfare benefits are vestigial, a safety net only for the very poorest in society.
Harriet Harman’s recent proposal of an “affluence test” is part of this. The proposal that those above a certain income level should lose entitlement to child benefit, maternity allowances and even a pension is a proposal to means-test benefits which are universal at present. The approach of Harriet Harman and Frank Field to the welfare review has been summed up by some observers as, “cut what you can and privatise what you can’t”.
New Labour continues to repeat the claim that Britain cannot afford the welfare state as one of the chief arguments for restructuring. However as Anatole Kaletsky pointed out in The Times of 16th January, “The first point to note about the campaign to reform the welfare state that Tony Blair launched with his speech in Birmingham last night is that it is not necessary ... the idea that welfare cuts are driven by the forces of demography and the iron laws of financial necessity is simply false.”
The truth is that Britain is at the bottom of the welfare spending league of industrially developed countries. Furthermore, Britain’s welfare spending is declining measured as a proportion of gross domestic product. By the end of the 1980s, Britain had slipped to 17th out of 21 OECD countries, higher only than Portugal among West European countries.
Nonetheless, the fact that high-earners are eligible for disability benefits, child benefit or maternity allowance is increasingly used as an argument for cutting and/or means-testing these benefits. This is nonsense. As Lynne Jones MP and others have pointed out, why should well-off lone parents, pregnant women or disabled people be singled out for attack when others in the same income bracket are left untouched? Benefits reflect the additional costs incurred by people in these categories.
The only equitable and sensible method of dealing with such circumstances is through taxation of the highest earners and lifting the ceiling on national insurance contributions — not cutting benefits.
Defence of universal benefits and the need for progressive taxation will be themes of the eve-of-budget Lobby of Parliament organised by the Campaign to Defend the Welfare State (CDWS) on Monday 16th March.