Forcing people to finding a job, which has worked in America, is a policy New Labour should adopt

Britain would benefit from Clinton's tough love

Bill Clinton is not the most obvious politician to become the darling of the conservatives, but recently, he has been luxuriating in praise from some improbable quarters. The reason? He's the man who really did end welfare as Americans knew it - the promise he made when he signed the Welfare Reform Act into law 10 years ago.

Benefit was to become a transitional, rather than a permanent, aspect of peoples' lives. The permanent feature would be work. Welfare recipients, mostly single mothers in the US system, could receive benefit from the Federal government for a maximum of five years in their lives. After that, nothing. Unless they worked, they would have no income. Many American liberals accused Clinton of meanness and legislative child abuse - and I remember having great reservations.

We know now that it has worked even better than its architects imagined, with major implications for the way welfare systems will be designed in future and for the wider politics of social spending. According to the Brookings Institution's Ron Haskins, the numbers claiming benefit in the United States have shrunk by 60 per cent and there has been a 30 per cent increase in single mothers at work. The incomes of the families formerly claiming benefit, mainly headed by women, have risen, sometimes dramatically.

The poverty rate among black children and children in female-headed families in 2000 fell to its lowest recorded level. Since 1995, the Index of Child and Youth Well-being has improved almost every single year. In 2000, the number of children being placed for fostering fell for the first time since 1980 and has continued falling. There has been a social revolution. The welfare mom has become the working mother. Even cases of child maltreatment have fallen.

If forced to find work, the discovery is that claimants have unexpected depths of resourcefulness and employers respond by creating jobs to meet the new supply. The dwindling band of critics objects that the long American boom has meant the policy has not been tested when jobs are hard to find. But even in the dog years of the early 2000s, the social improvements were not reversed. There has been a structural change.

It's not all rosy. There are signs that some teenagers with working single mothers suffer acutely from lack of parenting, and there is a hard core of some 10 per cent of single mothers and other claimants in desperate straits who have neither benefit nor work. Poverty is still widespread. But the substantive point stands: there is a new work culture among America's poor.

The right's prejudice seems justified and the liberals are dished. But Clinton was always playing a long game, whose profundity has yet to dawn on his new conservative admirers. Welfare has disappeared off America's political radar as a live issue. Better still from the left's point of view, there has been a relegitimisation of the social spending that remains - social security and medical insurance. The conservative strategy was to claim that social spending was breeding a dependency culture. Bush wanted to privatise social security, so effectively lowering pensions. But the idea is politically stone dead. So is reining back medical insurance.

This has opened a bridgehead for the left. Social spending on health, education and pensions is popular and dependency-free; everyone benefits and the gains are obvious. The politics work completely differently, so that even some Republican governors are experimenting with introducing state-wide comprehensive health cover.

Nor is that all. There is interesting new evidence that high social spending is indisputably linked to higher economic growth. Economic historian Peter Lindert has completed the most exhaustive examination of trends in social spending in a range of countries, going back to the 18th century. In his book Growing Public, the new bible on social policy, he proves conclusively that rising social spending has been associated with higher economic growth in every case for more than 200 years. Forget tax cuts; raise spending on education, health and housing if you want growth. The reason is that healthy, well-educated workers who are not afraid of either retirement or unemployment work harder and take more risks.

The left in Britain should play the same game and this was how I used to understand New Labour policy. Tony Blair and Gordon Brown would attack welfare dependency and be tough on feckless families, make work rather than benefit the alpha and omega of the welfare system, and use the political opening of a newly legitimised welfare state to boost social spending in areas where it was genuinely popular.

Along the way, that political thinking has been lost. New Labour has tried hard, but has never felt able to reproduce the robustness of Clinton's measures in a British context. As a result, 16 per cent of households, representing more than three million people, are still workless in Britain, living off benefit, only down by an eighth over the past 10 years. Yet over the past two years, up to 600,000 east Europeans have found work in Britain. Too many British live on benefit for no better reason than they don't want to work and there is too little insistence that they show determination and resource in finding some.

This year's Welfare Reform Bill moves in the right direction, proposing, for example, that benefit recipients regularly attend a work-focused interview in order to find work. Whether it will really crack the problem remains to be seen. Blair, though, will still be portrayed as launching a vengeful attack on the nation's disadvantaged. His initiatives on bad parents last week will be used as further evidence of his malevolent intent.

It's a measure of how much New Labour has lost the plot. It has succeeded neither in lowering workless households significantly nor in legitimising social spending. Neither is there much understanding from its own side about the larger game. Instead, it gets brickbats from all sides. Part of the problem is that too many in progressive Britain still do not want to come to terms with the facts and part is that Blair has never managed to convince them why they should. He needs to use his last months in office to make good the deficiency - and fast.

Will Hutton
3 September 2006

http://www.guardian.co.uk/commentisfree/story/0,,1863995,00.html

 
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