GIRO NATION; as Labour Is Criticised over Benefit Fraud, a Hard-Hitting Analysis of Why Tony Blair Will Never Be Able to Tame the Welfare Monster

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Byline: LEO MCKINSTRY

Labour arrived in power three years ago promising a radical shake-up of the benefits system. In Tony Blair's own words, his Government would 'think the unthinkable' on welfare. So far, they have only come up with the unworkable.

Far from cutting back on benefits expenditure - as the Party's Election manifesto pledged - Labour has presided over a massive increase.

Last week, the Commons Public Accounts Committee criticised the Government for not doing enough about benefit fraud. And next year, welfare spending is due to reach a massive [pounds sterling]118billion, up from [pounds sterling]98billion last year, a shocking rise at a time when the economy is growing.

Can no one tame the welfare system?

For all Labour Ministers' tough rhetoric about a crackdown on the dependency culture,they have done nothing to reform a bloated system that subsidises idleness, irresponsibility and family breakdown.

The failure of the Government's policy on welfare is demonstrated by the ineffectiveness of its two flagship measures: the Working Families Tax Credit and the New Deal for Lone Parents. Both were supposed to make employment more attractive for benefit claimants but they have become expensive flops. The Working Families Tax Credit provided a direct financial incentive for jobless parents to go out to work, through a mixture of cash payouts to boost earnings and cover childcare costs.

The plan was hugely expensive, costing [pounds sterling]5.3billion this year, but Ministers boasted that it would soon result in a large drop in the number of households without a job holder, estimated to be around 1.5million.

Yet such claims have proved wildly optimistic. According to a report from the Institute for Fiscal Studies, the Tax Credit has been a dismal waste of money, encouraging just 27,500 of the unemployed to take a job.

Equally unproductive has been the New Deal for Lone Parents, launched amid much hype in July 1997. Costing [pounds sterling]190million in the lifetime of this Parliament, the initiative gives support with training, childcare and finding jobs, much of it organised by a new network of 'personal advisers'.

But this week, according to Parliamentary figures, it emerged that the policy has barely scratched the surface of mass unemployment among single parents. Of the 500,000 people offered help, just 66,980 accepted the Government's invitation to try to earn a living, and only 21,611 have secured jobs.

According to the Conservatives, each job found under the New Deal is costing the taxpayer at least [pounds sterling]11,000.

addition, the Tories argue that most of those who have gone into jobs would have found them anyway.

So why have Labour's welfare schemes failed so badly? The answer simple.

Ministers ignored the unpalatable truth that there exists in Britain today an underclass of feckless, ill-educated and socially inadequate people who do not want to work. Training and jobs counselling are of no interest to them.

In their empty, unambitious lives, the New Deal and Tax Credits are irrelevant.

This has happened because of the vast reach of state benefits. Contrary the claims from the poverty lobby, which has a vested interest in exaggerating deprivation, our welfare system can provide an adequate living for those willing to milk it. Many claimants see no point in taking a job when they can lounge around at home, have their rent and council tax paid by the Government, and receive substantial weekly cash sum. In short, they learn that idleness pays.

When social security was conceived in 1944 by Lord Beveridge, he announced that his plan was 'not one for giving to everybody something for nothing and without trouble, or something that will free the recipients for ever thereafter from personal responsibilities'.

Sadly, that is precisely the way our modern welfare state operates, for the right to benefits is not linked to any contribution to society. …