POLITICS
Labour prepares to close down the something-for-nothing society
SIMON HEFFER
Mr Tony Blair and the late Aneurin Bevan are rarely associated with each other, despite both being Labour politi- cians. Mr Blair is an ascetic, donnish, punc- tilious ex-public schoolboy. He is also, to the traditional left, a proto-Tory. Bevan, by contrast, was an evangelising socialist, pas- sionate in commitment and exuberant in manner. However, Bevan was really the first moderniser of the Labour party, a tra- dition of which Mr Blair has become the latest figurehead.
The dissolution of the marriage between Labour and a universal welfare state is cen- tral to modernisation. Bevan watched in distress as the 'cascade of medicine' was 'poured down the throats of the British people' by the National Health Service he had just established. He saw the morally, and financially, corrupting effects of wel- fare. In his manifesto for the leadership of his party last year Mr John Smith at last hinted that universal welfare should not be taken for granted. In December he consti- tuted a Commission on Social Justice to explore this sensitive area. It will not report for some time. What effect it has depends on who wins the internal battle for Labour.
Paradoxically, only Labour could get away with abolishing child benefit or state pensions for all over retirement age; or with introducing a form of workfare, or abolishing mortgage interest tax relief. Were the Tories to do these things some would breach their manifesto commit- ments, others would be cynically portrayed by Labour as an assault on the weakest in society. Most Tories, however, are not wor- ried about being called names. They recog- nise that desperate measures are needed to stop the Public Sector Borrowing Require- ment reaching £60 billion next year.
'We didn't need a manifesto commitment on child benefit,' a Parliamentary Private Secretary told me. 'What Thatcher did with it was right — let it wither on the vine. Now we can't touch it. What will Labour do? Promise to abolish it and give twice as much to the poor and nothing to everyone else. That's what we should have done.'
A former Cabinet minister complained to me that 'the welfare spending is lunatic. You can't blame Peter Lilley — he can't help what Sarah Hogg put in the manifesto. But Major should have told Virginia to take a running jump over health spending and start sacking some of the pen-pushers in the health service. Welfare spending is the obvious place for us to save money.'
These two observations sum up the prob- lem. First, the welfare state is of more ben- efit to its employees than its clients. This is a result of Labour's historic role as provider of jobs for trade unionists. A mil- lion people work in the NHS, though a happy by-product of the creation of trust hospitals has been the sacking of many underemployed operatives. More than 70 per cent of the NHS's £35 billion a year is spent on pay; firing people is the easiest way to save money, even if the fired go straight on the dole. Labour's health spokesman, Mr David Blunkett, now says his party supports an internal market in the health service. This is not just an accep- tance of reality but a sign of Labour embarking on a trial separation from the health workers' unions. Mr Blunkett is now all for welfare state rationalisation, whatev- er happens to the workers. By contrast, Mrs Bottomley, the same day, agreed that the 14 regional health authorities (cost of exis- tence: £12,500 per second) would survive even though the independence of hospitals left them with little to do. Their new role? Ensuring the 'internal market' does not put any hospitals out of business.
The second, related, point is that Labour threatens to outflank the Tories on welfare. It is not just a few 'Clintonisers' who feel that the pregnant wives of merchant bankers or the children of property devel- opers should not receive free prescriptions, or that the Duchess of Westminster should not pick up a wad of child benefit for the infant Lord Grosvenor and his sisters each week. The mood is common on Labour's back benches too. In an article in Monday's Daily Mirror, Mr Gerald Kaufman ridiculed the traditionalists for wanting to use the policies of the 1966 general election to win the next one. He pointed out that in 1966 three in five workers had blue collar jobs; now the same proportion has white-collar jobs. He added that a majority of people rented their homes in 1966; now seven in ten own them. A more instructive compari- son would have been with 1948, when the modern welfare state was invented, and social conditions were even more primitive.
Yet the Tories seem keener to maintain the vision of Attlee and Bevan than Attlee and Bevan's successors. As Mr Blunkett has said : 'We have to take a very hard look at ourselves. The Tories have doubled the number of people on benefits, yet it is the Labour Party that is seen as in favour of mollycoddling people. We have to be tough with ourselves and ask why that has hap- pened. We have to convince people that we are not a tax and spend party.'
In a submission Mr Blunkett is placing before the Commission for Social Justice, he will argue that Labour must become 'the party of self reliance.' The reformers want an integrated tax and benefits systeni, which would target help on the worst off, thereby ending universality of benefits; they want workfare; they want to stop the mid- dle-class racket of mortgage and pension tax relief. The most zealous reformer, W Frank Field, says that if a programme such as this were undertaken Labour could cut taxes to 15p in the pound at the basic rate, because the rich would no longer be getting their dividend from the welfare state. Those able to help themselves would be compelled to do so; and the old Victorian distinction between the deserving and the undeserving poor would be drawn up again. It sounds like a Thatcherite fantasy. In fact, it is. All the ideas are straight from the Institute of Economic Affairs in the mid 1980s, when Lord Harris of High Cross would complain from those offices that there would be unemployment so long as the state paid people to be unemployed. Then, the Tories felt such ideas were so extreme that they could not imagine eVerl suggesting them. When Lord Joseph, as Education Secretary, told the middle class- es to pay more towards the university edu- cation of their children, there was deafen- ing execration from those whose second holiday each year was effectively paid for by the welfare system. If the reformers win the Battle of the Labour party, and radical welfare policies are pursued, Labour will be in severe clan' ger of winning the next election. By corn' parison, Conservative thought on this issue is in the morgue. Mrs Bottomley is terribe5I of radical reform; Mr Lilley is not, but his frightened colleagues will not hear of it: It could be 1945 all over again; a long-serviq Tory government thrown out because! t cannot match the exciting vision of its Labour opponents. The problem, unless PA! Lilley can wake up his friends quickly, is that next time it will be the Conservatives who are advancing the socialist policies.
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