The Welfare State

– in the House of Lords at 3:08 pm on 30th April 2003.

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Photo of Earl Russell Earl Russell Liberal Democrat 3:08 pm, 30th April 2003

asked Her Majesty's Government:

What policies the Prime Minister was announcing when he told the Financial Times of Monday 28th April that "what we have got to do is fundamentally to redraw the way the 1945 welfare state settlement is implemented".

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Chancellor of the Duchy of Lancaster, Cabinet Office

My Lords, the Government are proud of the achievements of the 1945 Labour Government in creating a welfare state in that age of austerity. Half a century on, we believe that deprivation and social injustice are best tackled by higher quality public services, implemented in line with four principles of public sector reform; namely, by the delivery of national standards of service through clear frameworks of accountability; by devolving and delegating to the front line; by promoting greater flexibility to respond to local needs; and by offering more choice to the users of public services.

Photo of Earl Russell Earl Russell Liberal Democrat

My Lords, I asked the Question because I do not understand what the Prime Minister means. Can the Minister explain further what the four principles mean in practice? Can he give any examples of measures which might illustrate them in implementation?

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Chancellor of the Duchy of Lancaster, Cabinet Office

My Lords, I recommend to the noble Earl the Fabian Society pamphlet of last September in which the Prime Minister explained why the reform of public services is the route to social justice. The first chapter is entitled "Beyond the 1945 Settlement". The first principle speaks to a problem that we have seen for half a century—that is, that the poorest sections of our society receive the poorest public services. We therefore have a radical and challenging aim of trying to create national standards of quality across the whole country. That will be best supported by the devolution of more authority and budgets to the front line; by greater flexibility for people on the front line to make the kind of decisions that offer a much more personalised service than people would have been able to have, or even look for, in 1945; and, of course, by building greater choice across areas such as the National Health Service. I cannot go into greater detail in my response, but much of the information is contained in the pamphlet, which I will happily make available to the noble Earl.

Photo of Lord Renton Lord Renton Conservative

My Lords, as I was elected to another place in 1945 and well recollect what happened during the years that followed, may I remind the Minister—because it does not seem clear from his statement—that the then Conservative opposition voted in favour of the National Insurance Act and another one dealing with industrial injuries insurance, which have stood the test of time very well and been amended from time to time? But the Conservative government and the National Liberals, of whom I was then one, voted against the National Health Service Act, and that part of the reforms has never succeeded as well as people hoped. Will the Government please concentrate now on getting that right?

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Chancellor of the Duchy of Lancaster, Cabinet Office

My Lords, I say again that we on this side of the House are intensely proud of what that 1945 Labour government achieved with regard to the creation of the National Health Service. I accept that there have been other areas of progressive legislation—one thinks of the Old Age Pensions Act 1908 and the National Insurance Act 1911 from the Liberals. Such examples come less readily to mind when I think of the Conservative Party's contribution in this area.

We believe that the core values of fairness and opportunity for all that this Government promote are predicated on increased prosperity, because that prosperity allows us to make public investment on the scale that the Chancellor has announced in recent years, with an extra £63 billion going into public sector investment over the next few years. But we have made it clear that that kind of unparalleled investment should be linked to reform.

Photo of Lord Haskel Lord Haskel Labour

My Lords, does my noble friend agree that the Prime Minister is on record as saying that the values which underpin the 1945 settlement are to be maintained? It is the implementation which is to be altered, according to the circumstances which apply today.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Chancellor of the Duchy of Lancaster, Cabinet Office

My Lords, my noble friend makes an important point. Those values of fairness, support and opportunity are enduring, but times obviously have changed radically since 1945. In the post-war era, after the arbitrariness of provision in pre-war times, people were therefore understandably very grateful for the state's ability to provide support to a sometimes very basic standard on a more universal basis, with access free at the point of use. We wish to make sure that we defend universal provision and access free at the point of use, but we want also to ensure, given all the changes that there have been in the past half-century, that we can offer more personalised services to people using our public sector and that we work with increased investment, more flexible labour forces and the new technologies to deliver that.

Photo of Lord Sutherland of Houndwood Lord Sutherland of Houndwood Crossbench

My Lords, may I draw to the Minister's attention one particular aspect of the welfare state which could reasonably be fundamentally reconsidered at this stage—the way in which funds are made available for care of the elderly? Currently they are through two separate streams, the Department of Health and social security. This is not good from the point of view of the individual in need of care, nor is it an efficient way to use public money in facing up to a major issue.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Chancellor of the Duchy of Lancaster, Cabinet Office

My Lords, I will leave the detail of the response to another Minister at another time. In general terms, I take the point that much of our delivery is complicated by red tape. Indeed, our attempts to deliver cross-cutting services can at times be in danger of creating more demands for audited information, and so on. We are therefore intent on trying to reduce the burden of red tape and of poor regulation, and I am delighted that in addition to all the work that the Prime Minister has put into this area, the Chancellor, in his Budget, said that the reform of regulation—the reduction of red tape—is one of the priorities that he will be imposing on departments.