As I sat through meetings with my officials in my first week in post I was reminded of a remark made by Alan Greenspan when he was still Chairman of the Federal Reserve: “If I have made myself clear then you must have misunderstood me”.
It’s very simple to be complicated about the welfare state. It is very easy to lose your audience in the alphabet soup of benefit names and a wake-me-when-you’ve-finished list of eligibility rules, taper rates and disregard procedures.
Today I want to try to be purposefully simpler than that. I want to talk about the principles behind the details. I want to do what, as politicians we do too rarely, and talk about what the welfare state should be designed to achieve.
For me, it’s simple: the welfare state is there to improve life chances. The aim is that people should be the authors of their own lives.
Two weeks ago, the Prime Minister set out the animating purpose of this government. It is to find, encourage and nurture the talent of everyone. This is, of course, an economic issue. In an era when the premium to skills keeps rising, our economy more than ever before depends on our people.
But it is more than that. The defining purpose of our politics, our cardinal value, is to remove everything that attenuates life chances, everything that stymies opportunity. Even if there were no economic consequences to wasted talent, which there are, it offends the most widely-held moral intuition in this country: it’s not fair.
In Britain today it’s too much a matter of fortune if you get a chance. And it’s too much a matter of chance if you make a fortune.
The welfare state, from its origins, encodes the idea that we use the common wealth for the good of all. There was more to it than just the smoothing of income over the life course. There was more to it than ensuring basic needs were met. There was more to it than avoiding destitution. It was, above all else in fact, a claim for democratic nobility, for equal consideration.
Think of that telling word nobility which describes both a desirable trait and the social elite who are said to display it. Think of the narrative of Tom Jones, the foundling boy, whose notable ability is explained when he turns out to be of high birth after all. It wasn’t thought credible that someone born in ordinary circumstances could have such talent.
Progressive politics turns on the very opposite idea. All people can flourish. It is a matter of basic justice. Social nobility extends to everyone.
There are three relevant principles which will guide me as we move towards this genuine meritocracy: control, capability and contribution. Just in case you think I’ve chosen those for the fact of the alliteration I could say that they correspond to equality, liberty and fraternity – my not very revolutionary trinity for welfare.
I want people to be in control of their own lives. But I recognise, as our political opponents don’t, that sometimes we need to build people’s capability before that is possible. And I recognise too that welfare is a collective good – we have duties to one another that we need to discharge in the contribution we make.
The guiding idea of welfare should be independence and control. Freedom from dependence of any sort is the objective.
For the majority, independence means work. The Labour Party, as its name tells you, was founded on this idea of work. It is written in the pages of every Labour manifesto since 1906. It was emblazoned on the banners of those who took to the streets to demand gainful employment a century ago.
In the 1980s, the Tories abandoned a generation of workers. In the drive for flexibility they simply let people fall. Over the last ten years we’ve shown how heartless that was – we’ve shown that the labour market can be flexible and full at the same time.
The Tories just couldn’t have had the success we’ve had. They just didn’t understand, and they still don’t understand, that the visible hand of government has a role in providing fiscal stability, effective competition policy, free trade, and investment in skills, in science and in the knowledge economy.
In the 1980s, it would have been impossible for our economy to absorb over a million new workers from overseas. And they wouldn’t have wanted to come here anyway.
Yet, we’ve absorbed those new workers, and unemployment has continued to fall. Today, there are jobs if people want them. That’s the traditional definition of full employment, and we have achieved it.
The claimant count is at its lowest for 32 years. The employment level is a record at nearly 29.4m. There are one million fewer people on out of work benefits than there were in 1997. Work is proving to be the best welfare for more people than ever before.
But not everyone can work. That doesn’t mean we give up on the idea of control. I want to look at the principle of individual budgets to see how we can give more control over their lives to those we don’t expect to work. I don’t think it’s an accident that a pressure group advocating the greater use of personal budgets is called “In Control”. I think this is a very effective way of extending choice and control over care and support. And it’s transforming people’s lives and opportunities.
I also want us to ask whether we are doing enough to help disabled people into work. As we get more people in to work, we will release resources. Where do we need to improve the support we give to disabled people, so as to give them control over their lives, whatever their circumstances?
Over the next few weeks, I want to sit down with disabled people, organisations representing them, people who have pioneered individual budgets, and address these questions before putting forward policy proposals.
But there is a lot to be done before people are fully in control. This brings me to the second of my three principles: capability. People don’t all start with the same chance to live independent lives.
In my constituency I see lives blighted from the start. Children who don’t get half what their peers get, and therefore won’t get the same opportunities.
Poverty shrinks capability. It impairs life chances. Poverty makes life riskier than it needs to be, less pleasant than it needs to be, less fulfilling than it could be.
I want to be categorical our about child poverty goal: it will not be quietly abandoned. Achieving our goals will not be easy. But I am determined that we will continue to tackle child poverty, and to see how savings from my department can contribute. If we can reduce spending on the costs of worklessness, to invest in the future of our children, we will hit two targets with one policy.
I spent part of the last week reading the speeches of David Cameron and Chris Grayling. As Martin Amis said of Philip Larkin’s miserable life, I did it so that you don’t have to.
There is, as you would expect, a lot of half-hearted, not very convincing emulation of New Labour. But there’s something missing: child poverty. The last reference to child poverty I can find from a front bencher is from Oliver Letwin who has clearly been locked in a room for fear he should ever speak in public again.
On Monday in the House I asked Chris Grayling whether the Tories were committed to our goal of ending child poverty. The silence was deafening.
The silence was also more eloquent than anything they ever say. Here’s a test for the Tories: if they agree with me, if it’s as clear a goal for them as it is for us, let them say so.
Let them say, as categorically as we do, that the stubborn existence of poverty scars life chances. It is not just. And we will redouble our commitment to act.
Now I’m talking about capability I’m wearing the influence of Amartya Sen on my sleeve. The real treasure of Sen’s work is the way that he gives us a richer idea of equality. He teaches us that equality has many dimensions, of which income is just one. One thing he shows is that work is intrinsically important. It is a good thing to have a job, over and above the income it brings in.
Over the last ten years, we have become much more ambitious about who we believe can work. Ten years ago, helping people on incapacity benefit into work might have been thought dangerous for their health. Today, the evidence shows that helping and supporting people into work is often the best way to improve their health. Ten years ago, people were wary about requiring single parents to look for work. Today, we know that it would improve their life chances and lift 70,000 of their children out of poverty.
That’s why, this October, we are replacing Incapacity Benefit with the Employment and Support Allowance. The new Allowance will remove the perverse financial incentives of Incapacity Benefit and refocus the capability assessment on what the claimant can do rather than what they cannot.
And it’s also why we will be expecting single parents to look for work when their youngest child is 7, rather than 16, bringing us more into line with other industrialized countries.
The Employment and Support Allowance will apply to new claimants first. We’ve already announced we will extend the new medical test to current Incapacity Benefit claimants under 25, and give them the tailored help of the Pathways to Work programme to support their return to work. But I want to make clear that over time and as resources permit our ambition is to transfer everyone on Incapacity Benefit to the Employment and Support Allowance.
These new expectations will mean we strike for a higher summit in our labour market: an aspiration of 80% employment – the highest of any major industrialized country. That means 1 million people off Incapacity Benefit, 300,000 more single parents and 1 million more older people working.
This is all based on the fact that we want to focus on what people can do, not on what they can’t. In my last job, I met a remarkable young man, Mark Foster, who was one of the leading actors in Oily Cart, a world class theatre company specialising in work by people with disabilities. He had significant learning disabilities, but that hadn’t lowered his expectations – he was working and contributing just like everyone else in the company, indeed he was one of its stars.