Frank Field MP, Labour’s MP for Birkenhead and a former Minister for Welfare Reform, explains that in future governments will face tougher fiscal constraints with public spending limits of c.40 per cent of GDP. If welfare is to meet people’s aspiration for security, a new deal with contributors will be needed.
Mr Field proposes that his party champions a return to contributory national insurance, so contributors own their own benefit and funds are managed by new mutuals under their own elected boards on the model of the John Lewis Partnership. As Mr Field writes:
Welfare as we have known it looks like going down to defeat. Labour must use this week to begin to set out an alternative.
Successive governments have deserted the system based on the duty to contribute before the right to help was conceded. Increasingly benefits are now provided only after a test of income – method abhorred by voters.
Ed Miliband has expressed his wish to see a something for something welfare state replace the something for nothing welfare which is now dominant. Tuesday’s speech offers him the perfect opportunity to begin that long journey back to a welfare state that commands growing support and rewards functionality.
*Frank Field is Labour MP for Birkenhead, a former minister for welfare reform and the author of Politeia’s new publication, Working Welfare: Contributory Benefits, the Moral Economy and the New Politics.