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The Week

The cross-party consensus on welfare reform echoes the Gingrich–Clinton revolution

Fraser Nelson on the coming political week

16 July 2008

12:00 AM

16 July 2008

12:00 AM

The Conservatives are making about as much headway in next week’s Glasgow East by-election as they would on Mars. ‘I told one guy I was from the Conservative party,’ moans one shadow Cabinet member who was campaigning there. ‘He said, “Oh, aye. Where’s that happening then?’’’ Hatred would at least entail some kind of recognition. And yet the emerging Cameroon mission is precisely to help places like this — where the party is, quite literally, beneath contempt.

The curse of Glasgow East is worklessness — not just its 6.7 per cent level of unemployment. For every unemployed person, there are seven other people on some other form of welfare dependency. Most of these have not worked for at least five years and are, statistically, more likely to die than work again. Drink problems, drug addiction, violent crime and family break-up — all stem, ultimately, from mass joblessness, a curse visited upon the area by the welfare state.

And it is this curse which the Tories are now pledged to remove from Glasgow East and the many places in Britain like it. Delivering the prestigious Centre for Policy Studies annual lecture on Tuesday, George Osborne quoted William Beveridge’s diagnosis of the problem in 1944: ‘Idleness is not the same as want, but a separate evil, which men do not escape by having an income.’ And it is this evil, Mr Osborne said, which the Conservatives would make it their business to conquer by radical welfare reform. It is a hugely ambitious undertaking — but still a plausible one.

On Monday, meanwhile, the Secretary of State for Work & Pensions, James Purnell, will declare himself to have embarked on an identical mission. Like the Tories, he will pledge to reassess every one of the 2.6 million individuals claiming incapacity benefit (including 9,900 in Glasgow East) to see what work they are capable of doing. Like the Tories, he will propose to privatise great chunks of welfare-to-work provision. And like the Tories he will say he is implementing the report of the man Mr Osborne singled out for praise in his speech: David Freud.

This former banker has been transferred like a football star between warring teams. He was initially appointed by Tony Blair to produce a report which proposed mass privatisation of welfare provision. This did not endear him to Mr Brown, and he was given one dressing down by the then Chancellor that lasted 45 minutes. When Mr Blair resigned, Freud was cut adrift as Mr Brown’s intellectual purge — killing ideas that were not his own — began in earnest.

Like many homeless Blairites, Mr Freud was then given sanctuary by the Policy Exchange think tank, which debriefed him and repackaged his ideas for eager consumption by the Conservatives. And in January it was Chris Grayling, the shadow work and pensions secretary, who proposed to adopt his ‘work-for-dole’ system, and cut the benefits of those who refused to comply. To Mr Grayling’s surprise — and Mr Brown’s horror — this ‘tough love’ plan was given a warm reception.

What happened next gives a fascinating insight into Mr Brown’s psyche. Mr Purnell was given permission to lure Mr Freud back and to have him make his report on government policy. Things had changed, utterly. Once, civil servants joked that the way to get a plan past Mr Brown was to include a chart showing how it helped the poorest most. Now, it is enough to persuade him that a plan will hurt Mr Cameron. More or less anything will be approved if it meets this criterion — even plans that involve the mass privatisation of welfare provision.

So on Monday, Mr Freud will be witnessing the second incarnation of his plans thus far this year — but this time bearing a red rosette. He has been helping Mr Purnell draft the Green Paper, and every part of his wish list will be included. The Treasury has agreed to release cash from the welfare budget to private welfare-to-work providers (a key requirement) for three pilot cities. Anyone who has been unemployed for more than two years will be asked to perform community service, like cleaning parks or removing graffiti. Drug addicts will be refused welfare if they do not seek help.

Mr Grayling has his rebuttal ready. Mr Purnell will not deliver what he dangles, he will say. His ‘work for dole’ scheme will last just four weeks, not the 12 months the Tories believe is needed. The government’s ambition of taking a million off welfare in ten years is too small, Grayling will say. Purnell and Grayling present each other as a charlatan whose sole skill is to fool the media. Essentially, they agree on the substance of the policy blueprint. The contest is over who is telling the truth and who would implement Freud most authentically.

This bipartisan consensus is extremely significant: it echoes the extraordinarily successful Gingrich–Clinton reforms in the United States (and, for that matter, the pioneering welfare revolution in 1980s Wisconsin). Welfare reform is the toughest task in modern politics, made all the harder when you face accusations from political opponents (or your own party) that you are being cruel to the weakest section of society. But when the public accepts the system is failing (as the polls now suggest), and the parties argue only about the speed of reform, the conditions in which radical reform is at least possible have been met.

Mr Grayling suspects Mr Purnell will not dare suggest anything on Monday that could upset 16,840 welfare-dependent voters who go to the polls in Glasgow East three days later. Nor, he suspects, will the Labour party stomach anything genuinely radical. Mr Purnell retorts that the Tories have ‘nothing more than a press release’ to offer, and that Labour believes ‘there is nothing left-wing about being trapped at home’. He will have a Welfare Reform Bill in the next parliamentary session to test this theory.

All this will be deeply annoying for Messrs Grayling, Cameron and Osborne. It is already almost impossible to persuade the average MP, let alone voter, of the difference between the two welfare reform plans. Mr Purnell has denied his opposite number any tactical advantage, in stark contrast to Ed Balls, who has left nautical miles of clear red water between himself and Michael Gove. Yet, after cursing him, the Tories should also wish the Work and Pensions Secretary luck. The ‘giant evil’ of idleness in places like Glasgow East will take years to tackle. If this is to be the flagship mission of a Cameron government, there is not a moment to waste.

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