Articles

14 December 2010

Welfare: thinking the thinkable, Public Finance

Welfare reform is crucial to the coalition’s agenda. But ministers’ plans are driven by cuts rather than consistent principles, while Labour seems out of touch, write Gavin Kelly and Nick Pearce in Public Finance.

Almost every significant reform of the welfare state is heralded as Beveridgian in scope and ambition. But the reality rarely matches the lofty rhetoric. The latest attempt – Iain Duncan Smith’s plan for a Universal Credit – is certainly bold. It bears the imprint of a politician who has thought hard about welfare reform, and is determined to drive it through.

But the great misfortune for the work and pensions secretary is that his flagship reform will be outweighed by a broader set of measures being pursued by the coalition government. It is this disparate set of policies – as much as Duncan Smith’s claim to a grand plan – that look set to fundamentally alter the complexion of the welfare state.

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A new generational compact, Progress

Care for the young and old will be the next great chapter in the story of the welfare state. Labour should seize the chance to write it, write Gavin Kelly and Nick Pearce.

One of the best books written by a politician in recent years is David Willetts' The Pinch. In it Willetts documents, with great clarity and rich empirical evidence, how the baby boomer generation has been pinching too big a share of the nation's wealth, enjoying rising house prices and generous pensions while failing to invest in the future for their children and grandchildren.

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