Paul Anderson, Tribune column, 3 August 1998
I can’t be the only cynical old leftist who thought Frank Field’s complaint this week that he’d been done over by spin-doctors was just a bit ripe.
There’s no doubt that the usual suspects told journalists some extremely nasty things about him last weekend. But I remember only too well his own enthusiasm for slagging off members of his constituency party who had the temerity, in 1990-91, to try to replace him as their Labour candidate. Of course, then as now, he adopted the pose of St Frank the Martyr, the innocent victim of satanic forces, but the viciousness of his smear campaign against his opponents was remarkable. There are plenty of people in Birkenhead who are no doubt currently feeling pleased that Field has at long last tasted some of his own medicine.
What’s important about his sacking as welfare reform minister, however, is not the spin-doctors’ vulgar abuse but what it says about the government’s social security policy. And here it is possible to have some sympathy for him.
When Field was appointed last year, it was universally taken as a sign that Tony Blair favoured a radical restructuring of social security. Field had a reputation as an innovative thinker on social security, and in the years before the 1997 election had developed a coherent case for replacing the existing mess of pensions and benefits provision with a new system of universal social insurance.
Shorn of a lot of moralistic rhetoric about the importance of self-reliance, the evils of single-parent families and the like, Field’s argument came down to this. The main problem with the social security system as it had evolved under the Tories was that it left a vast number of people reliant on means-tested benefits. Means-testing — which he described as “the cancer within the welfare state” — by its very nature encouraged claimants to lie about their means, discouraged saving and created an unmotivated underclass of welfare-dependents. The solution was to replace means-tested benefits with benefits received as of right. And the only way to do this, given the general unwillingness to pay more taxes, was to make sure everyone contributed to social insurance funds.
Field made a particular point of the applicability of social insurance to pensions, which were a thorny problem for Labour. The Tories had allowed the real value of the basic state pension to decline and had done everything in their power to shift people out of the State Earnings Related Pension Scheme introduced by the 1974-79 Labour government.
Labour was committed to reducing poverty among pensioners — but it would take big tax increases to raise state pensions sufficiently to ensure a comfortable standard of living for all pensioners. And raising tax was one thing that Labour had set its heart against. Field’s scheme to replace SERPS with fully funded compulsory second pensions for everyone, which he costed in detail soon before the 1997 election, seemed to the Labour leadership to be the solution to Labour’s dilemma: better pensions for all, but no new taxes.
Or rather, that’s how it appeared when Blair gave Field his government job. Once it came down to thrashing out the detail of welfare reform, however, it was a different story. Within six months of Labour taking office, it was clear that there was an unbridgeable gulf between Chancellor Gordon Brown and Field over what should be done.
For Brown, the priorities were simple: no tax increases and reduction by any means possible of the £100 billion social security bill. He had no quarrel with means testing in principle — indeed, he thought that “targeting” was the best way to get value for money in social security spending. The Chancellor was shocked by the transition costs involved in changing to a wholly insurance-based system. Field’s proposals for compulsory savings sounded to him dangerously like new taxes.
So Brown held up publication of Field’s Green Paper on welfare reform for months while they haggled over its contents — and when it eventually emerged in March this year, six months after Field submitted the first draft, it was clear that the Chancellor had won a crucial political battle. All that remained of Field’s grand scheme was a vague statement of principles.
There was plenty wrong with Field’s original proposals. Any social insurance scheme leaves people without cover, and in an era of endemic employment insecurity the goal of abolishing means testing and providing universal benefits and pensions would be achieved more easily by introducing a citizen’s income and reviving SERPS, all paid for through by raising taxes. Nevertheless, Field’s ideas were better than sticking to the Tory policy of relying on cuts and means-testing to keep social security costs to a minimum. Now he has gone, it’s an open question whether Labour has any alternative to business as usual.
