Shhh . . . they're helping the poor

For the consumption of Daily Mail readers, this week's welfare bill was heralded (in advance, naturally) as "The Crackdown", with a picture byline of a strong-jawed, gimlet-eyed Tony Blair promising "the end of the something-for-nothing days". Anybody on the left will be understandably suspicious of such language and of a policy that can be greeted with such enthusiasm by the Daily Mail. They should nevertheless recognise that the policy, if not the presentation, happens to be right.

The welfare state is a failure. The gap between rich and poor is wider than at any time in this century; one in three children lives in poverty; social class still determines life expectancy and educational achievement to an unacceptable degree; public services are chronically underfunded. It may be argued that much of this would not be true if the welfare state had been properly protected between 1979 and 1997. But the present welfare state is so blunt and unwieldy an instrument that even the best-intentioned government would have struggled to make much impact on social and economic inequality.

The postwar Beveridge welfare state operated on the same standardised, production-line principles as the large factories that then dominated the industrial landscape. It recognised only four states of being: employed, unemployed, retired and housewife. People either had jobs or they didn't. In the first case, they worked full-time in expectation of the proverbial gold watch after 50 years; temporary contracts were almost unheard of. In the second case, benefit was paid mainly as a stopgap while people waited for vacancies at one of a dozen or so large and well-known local employers. A housewife relied on her husband's income while she raised children. People retired at 65 and then became poor. (The disabled - for reasons that have never been satisfactorily explained - were less numerous then than they are now, even though most adults had lived through at least one world war.) These simplicities were not universally true, but they were true of a sufficiently large majority of the population to make universal benefits the most efficient means of alleviating poverty. To argue that this welfare system can survive unchanged into our far more complex and individualised age is like arguing that television should still be confined to one black-and-white channel, provided by the BBC.

The "single gateway" for all benefit claimants is one example of how the welfare system will now meet individual needs rather than slotting people into predetermined categories. Another is the requirement that anybody dependent on benefit should attend a personal interview about employment possibilities. The middle classes happily pay for such services when they need them and have, in any case, ample contacts to help them find jobs and educational opportunities. Poor people, on the margins of society, often have no idea where to start, and the longer they stay outside the employment market, the harder it becomes for them to get in. But why, it is asked, compel them? Why not let them refuse the interviews if they wish? Why not, indeed? Why not let them refuse school for their children or let them send their boys up chimneys or work 15-hour shifts in unregulated factories while we are about it?

Three principles should underpin a modernised welfare state. First, nobody should remain dependent on welfare if an alternative is available - not because welfare is always undignified, but because it limits aspirations and saps self-reliance. Second, benefits, when they are paid, should be at a level that supports a decent standard of living. Third, help should not be indiscriminate but should go to those in greatest need.

On these criteria, almost everything this government has done has been in the right direction: the end of free higher education for the better-off; the introduction of the working families tax credit; education maintenance allowances for 16 to 18 year olds from poor families; the (probable) taxation of child benefit; the cuts in tax relief for mortgage interest and married couples; this week's changes in benefits for widows and the disabled. Those who truly believe in redistribution and equality may wish to go further and faster; so no doubt, in 1981, did the true believers in markets and inequality. But ministers have started to address the terrible truth about the British welfare state: that large sections of it had become a free lunch for the middle classes. When the suburbs finally rumble what's happening, new Labour could be in trouble. If it helps to keep them in the dark, we should perhaps forgive the Prime Minister for an occasional saloon-bar rant in the Daily Mail.

This article first appeared in the 12 February 1999 issue of the New Statesman, Kick out the image-makers