Adam Smith Institute

In his speech to the CBI yesterday, Gordon Brown signalled that he was planning to put welfare reform at the heart of political fightback, announcing an overhaul of the system to "move claimants from passive recipients of welfare benefit to active job and skill seekers." JobCentre Plus functions look set to be contracted out to the private sector and claimants may be compelled to take jobs that are offered to them or face losing their benefits.

Good. The Conservatives have already seized on this topic, and I am glad to see the government following suit. As our recent report Working Welfare makes clear , this is one of the key challenges facing the country. Aside from being a drain on the economy, worklessness breeds inter-generational dependency, health problems and crime and among other social ills. By actively deterring people from entering work, the welfare state is hurting the very people it was designed to help. Radical change is long overdue.

My worry, however, is that the government may not be willing to think radically enough, given their historic ties to the welfare state and their attachment to redistribution and 'social justice'. After all, Frank Field MP was once asked by Tony Blair to 'think the unthinkable' on welfare reform and was subsequently fought by Brown every step of the way.

Has the Prime Minister undergone a Damascene conversion? Is he prepared to cut taxes for low-income workers, simplify the tax credits scheme and make work absolutely central to the benefits system? Well, perhaps... but I won't be holding my breath.

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