Peter Riddell: Political Briefing
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James Purnell had to compete with two of his predecessors and his Conservative Shadow over authorship of the welfare Green Paper. All are partly right, though Mr Purnell has enhanced his rising reputation by being the minister to produce the package.
It is now well over 20 years since Norman Fowler began the long process of making welfare benefits more conditional and encouraging recipients back into work. In the mid-1980s they were tackling a system that was universal and largely unconditional in that, once on benefit, there was often little incentive to leave. During the Tory years efforts to reduce published unemployment totals led to shifts on to sickness and invalidity benefit (after 1995 incapacity benefit).
Peter Lilley reminded MPs yesterday that, before the 1997 election, he had proposed incentives to help people to move off benefit into work. An innovative Britain Works scheme would use “the experience of the private and voluntary sectors to get people off welfare into work”. Sounds familiar.
Most of the seven Labour social security or work and pension secretaries before Mr Purnell have promised welfare reform. There have been some improvements, as shown by the fall both in youth unemployment and in the numbers claiming incapacity benefit, though these were the result of a strong economy as well as the measures. Tony Blair and John Hutton then commissioned David Freud, a former banker, to conduct another review. He estimated that up to two million might unnecessarily be claiming incapacity benefit. Mr Freud proposed changes to the benefit system to increase work incentives and also payment by results for private and voluntary firms. Initially the Treasury was cool, and Peter Hain was cautious, while the unions were hostile.
All that changed when Mr Purnell took over from Mr Hain. With the backing of Gordon Brown, he has embraced the Freud report. Freud has become a symbol of a commitment to change, also embraced by the Tories.
After so many promises, will this new package make any difference? The emphasis is not only on a responsibility to work but also on support. As Martin Narey, of Barnardo's, has pointed out, benefit dependency is hard to tackle because of a lack of affordable childcare. Frank Field has been sceptical, arguing that unless a single rate of benefit is introduced for those of working age, incentives to work will be insufficient. This is because those who get through the employment capacity test receive a higher rate of benefit.
The Goverment has set itself an ambitious target of raising the employment rate (of the working age population with jobs) from 75per cent to 80 per cent, while taking a million off incapacity benefit by 2015. These measures should help, though the state of the economy will be crucial. By the time we can judge we will probably have had another two work and pension secretaries, though the Tories have also promised to implement the proposals.
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