................................................................................ ON THE RECORD ALISTAIR DARLING INTERVIEW RECORDED FROM TRANSMISSION BBC-1 DATE: 25.10.98 ................................................................................ JOHN HUMPHRYS: Well, Alistair Darling, the man with the difficult job in our Edinburgh studio. Is it still root-and-branch reform or is it pruning a bit here and cutting a bit there? ALISTAIR DARLING MP: No, my starting point is that the Welfare State in its present form, which was essentially designed some fifty years ago for the world of post-war Britain, needs to be changed to take account of modern conditions. Now, there are three criteria that I think you have to apply when you look at benefits, when you look at the services that it provides. Firstly, is it helping all those who can get into work, secondly, are we paying benefits to those it was intended to help or has over the intervening period, some of the benefits really lost sight of the principles it was supposed to underpin them. And thirdly, are we helping those most in need because on any view, if you look at whatever area you want, there are people who are not getting the help that I think most of us would like to see. So the need for a root-and-branch examination of the Welfare State, benefit by benefit, service by service, is absolutely essential. But, of course, what we have got to do, is to ensure that every change we make is rooted in principle and that principle must be work for those who are able to work and security for those who aren't. HUMPHRYS: Can it be rooted in principle, as radical as root-and-branch as you imply in that answer, if it is just a series of trims here and cuts there and lopping off a bit here and lopping off a bit there. Can it meet those criteria if that's what happens? DARLING: That's not what we are proposing. What I am doing, at the moment, is looking at all the benefits that we pay, the services that we provide and asking myself how do they best fulfil the objectives and the principles that we set out in our Green Paper published earlier this year, which, as I said, the overriding principle is how do we get, for example, more people into work. That's the principle that underpinned the introduction of the New Deal, as your programme, your trailer earlier showed we're extending to lone parents tomorrow, right across the whole country. We also want to look and ask ourselves wherever or not benefits are appropriate or whether over not the underlying purpose of those benefits has changed over the years. And, of course, we also want to help those in most need. Let me give you an example, in your programme you referred to Incapacity Benefit. Now we have a situation today where one man in four, over the age of sixty, is now on Incapacity Benefit, that's double what it was in 1979, despite the fact that as a nation we've got healthier. What happened during the 1980s was that the last government finding high levels of unemployment were politically difficult for it, actually encouraged people to become sick. So what you saw was during the 1980s, the numbers of people going onto Incapacity Benefit went up every time there was an increase in unemployment. Now, Incapacity Benefit was never intended as an early retirement scheme, what it was intended to do, was to provide help for those people who were in work, who were no longer able to work because of sickness. Now, the intention of Incapacity Benefit has been undermined over the years and clearly that's one of the areas which I have to look at. HUMPHRYS: Right, and I'd like to come to that in a moment, but can I just return to the basic question which really can I sum it up like this. If I were to look back, or anyone, were to look back over what you've done in let's say twenty, twenty-five years' time from now, we will see a dramatically different Welfare State, we won't just see a few benefits cut here and there, but we will see perhaps some benefits that have gone altogether, some others that might have taken their place, we will see something that is fundamentally different from what we now have. DARLING: Yes, you will because as I set out in the speech I gave earlier this week, the role of the Welfare State has got to change away from simply passively reacting to problems, paying out benefits without dealing with the underlying causes of these benefits having to be paid out. You know, the whole point of the New Deal is to say that we recognise that people will come out of work, that they will need help to get back into the labour market and we are putting in place a mechanism that will help them do that. Now that's something that was unheard of a few years ago because the Welfare State didn't do that. It's our objective to have a Welfare State that becomes far more active in preventing problems in the first place, keeping people in contact with the labour market, ensuring that people don't get into poverty whereas at the moment too many are. And in that way, you save money if people are in work, they are far better off and it's actually better for us as well, both in economic and social terms. But if you go about your task, as I think the Tories have tended to do, and simply saying what can we cut here, what can we cut there, then you immediately have abandoned the point of principle and you will not achieve very much. What I want to do, is to recast the Welfare State so that it meets the needs of the country and society in the next fifty years, rather than make do and mend with a system that was designed for the world of post-war Britain. HUMPHRYS: The thing that puzzles me about that is that the man, the very man who talked in exactly that kind of language, the sort of language that you've just used, and wanted big changes, wants to see a big bill coming up now to reform the Welfare State, as he puts it, Frank Field, we saw him on the film, he was sacked. It's a bit odd isn't it, if you are on the same wavelengths? DARLING: Well, I'm not going to go over old ground again. You know, Frank decided.. HUMPHRYS: It's relevant though isn't it, to this discussion. DARLING: No, no, just let me...Frank decided that he wanted to leave the government.. HUMPHRYS: Because he couldn't keep that job, that's the point, lest we mislead the audience, he could not keep the job that he was doing, therefore he had to walk, as it were, not a choice. DARLING: Frank made that decision but both of us are absolutely committed to the same thing, which is reform of the Welfare State. Now, what I have to do, as the new Secretary of State, is to ensure that we give substance to the philosophy and over the next few weeks and months I will be making announcements and setting out how we believe the Welfare State ought to be modernised, and how it ought to be changed to meet the needs of the society, the economy that we are now entering into. Now, that's what I intend to do. The Prime Minister has said that there will be a Welfare Reform Bill. It won't be the last Welfare Reform Bill because if you bear in mind that nearly two thirds of what the Social Security Department spends now, stems from decisions taken before 1948. You will see that the change will take some time to implement, but unless we start now, unless we start rebuilding the Welfare State to meet the needs that we know will be about in the next ten to twenty years, then the generations that come after us will ask what on earth we were doing. I am determined that the Welfare Reform, the rebuilding of the Welfare State, which we as a party set up in the 1940s, will be rebuilt and refocused to meet the needs that we face in the future. HUMPHRYS: As you say, and the effect of that clearly, you would have failed if it, if this is not the effect is that you're going to save money in all kinds of areas, I mean that's been made clear, you've already made that point yourself. When the Tories were in power, Peter Lilley, your predecessor, as the Tory Minister said that he wanted to restrict the growth of Social Security spending to the growth in the economy, should not be more than the growth in the economy. Now presumably, without having a great attack on Peter Lilley and what he did, if you wouldn't mind, presumably you would accept that same challenge, wouldn't you? I mean you'd have to wouldn't you really? DARLING: Well, I'm not going to mount a great attack on Peter Lilley, other than to observe that Social Security spending this parliament is running at about half the rate of increase, there's about half that in the last parliament .. HUMPHRYS: But still not good enough by your own admission? DARLING: ..two per cent ... this parliament. My objective is to ensure that the Welfare State, the changes we make, are routed in principle and meet the needs that we know are going to arise in the next ten to twenty years. HUMPHRYS: Yes you make that point ... DARLING: Look let me, let me perhaps give you two examples, which you referred to. HUMPHRYS: Well I'd much prefer you answer that particular question before we go into details, because you know, we're going to be looking at specifics in a moment. What I really want to know is whether, if the cost goes up, if the cost of the Welfare State goes up, you would be happy with that. DARLING: : What I want to do is to ensure the money we spent is spent in the most effective way. HUMPHRYS: Of course. DARLING: And you know, we'll come onto specifics in a minute I know and I will illustrate how we intend to do that. What I can tell you is that Social Security spending at the moment, the rate of increase, is half that of the last parliament. Now one of the reasons it is half that, is because of changes that we've made, to ensure for example, that benefits go to those people who are entitled to receive them. Now there's other changes, ones that will be introduced in the Welfare Reform Bill, they will clearly take long, a longer time to take effect, but what they will do is enable us to meet needs that we know are likely to arise over the next ten to twenty years. The fact that people live - are going to live longer, the fact that they'll need greater care in their old age. These are all things that we know are coming up and are coming up fairly quickly and unless we make changes now, to ensure that where we don't need to spend money, for example, getting people into work who are not presently at work, or dealing with the underlying causes of poverty, where we can deal with that, unless we make those changes now, then we'll be in great difficulties in the future. That is the test that I've set myself, that's what I want to do. HUMPHRYS: Let's pick up exactly that - the getting people into work who are not at the moment in work and lone parents obviously is a very important category here, because maybe a million of them, who are not in work and who perhaps, perhaps, might be in work. Now you want to get many lone parents into work, right? That's quite clear? DARLING: Yes. HUMPHRYS: Right. Mothers with under school age children? DARLING: No, the lone parents who receive letters from us, asking us to come in and join the new deal, are those whose children are over the age of five. What is encouraging is that if you look at those lone parents who've come in and been for their interview, nine out of ten have actually joined the new deal. Five thousand in just the pilot programmes, and remember it's only been running on a pilot stage over the last few months. Over five thousand have gone into work. If you were to reflect that right across the country, it would mean a hundred thousand lone parents would go into work. So I believe that it is a clear example of where you've got a group of people, who in the past have been neglected, they've been ignored, but we're doing something positive to help them. When they see what's on offer, when you bear in mind that if you go into work, you could be up to forty pounds a week better off, and as far as the country is concerned, we're paying forty pounds a week less in benefit, then people can see that a change of philosophy, actually brings real results. It's a fundamental change of culture, of what the Welfare State is trying to do. HUMPHRYS: So it's absolutely crucial to get those lone parents, single mothers, into that interview. The question is how you're going to do that, because as you say, an awful lot don't show up for it, even when you invite them. DARLING: Well, if you consider the pressures that are on someone who has got, you know, young children, or even children at school and when you bear in mind that you know for years now, people have just taken the view, well if someone's a lone parent, there's nothing that can be done, it's not surprising that it has taken time to, for the word to get about, for people to realise that they could actually be better off, both, not just in, in money terms, but actually for a whole, in a whole variety of ways - people feel better by being in work and ... HUMPHRYS: But that's a bit patronising isn't it? I mean an awful lot of people are well aware of that, and the fact is they still, many of them, for whatever reasons there may be, do not turn up for that basic, that first interview, that is going to reveal to them all the delights about which you speak. Now the question is how you are going to get them to show up for that first interview. Has there not got to be some kind of pressure on them, some kind of incentive? DARLING: Well, I believe that the evidence so far, shows that lone parents, and particularly in the pilot areas, became increasingly aware of the help, the support that was available .... HUMPHRYS: Well less than half of them showed up for the interview. DARLING: I know but as I said to you, it's not, it's not surprising you know given, given the fact that you know lone parents have pressures that somebody without children don't have, and you know sometimes just the inertia, you know I came across a constituent of mine the other day, who has now actually joined the new deal and who'd been thinking about it for about seven or eight months, because she kept saying, oh I'll do something next week, I'll, and then something would turn up which made it, a bit difficult on that occasion. It will, it will take time, but what I want to do is to encourage as many people as possible, not just lone parents but others who would benefit from the help they could get to get into work, because all the evidence shows and if you bear in mind at the moment, we have three hundred thousand vacancies, notified to us through Job Centres alone at the present time. Now if we could get a substantial increase in the number of lone parents going into work, then that would not only benefit them, but it would benefit industry and therefore it would benefit the whole country. HUMPHRYS: So you're obviously not happy with the fact that fewer than half show up for the interviews. The question is whether there should be some kind of incentive to get them there. DARLING: Well, I would like as many people as possible to come along for interview. HUMPHRYS: Of course. You're not happy with the present figure. I take that point. DARLING: Yes, and you know I think the government does have to examine how it can ensure that everyone right across the board is aware of the benefits that would be available to them were they to come into work. Now, we've made it clear with lone parents, as we have with people with disabilities that unlike the case of say, a young man or woman at the age of twenty-five, no-one is going to force them to go into work. But I think there's a world of difference between being compelled to go into work and saying to somebody: Look, the government can help you in ways that you may not have thought possible, and you ought to have a look and see what options are open to you. Now, how we do that is something that you know, the government is reflecting on, and I will make an announcement to parliament in due course. HUMPHRYS: So in other words you are considering some sort of compulsion, some sort of incentive, let's use that word, to get single parents to show up. I take your point about the difference between the interview and the job that may or may not arise at the end of it, but as far as the interview is concerned you are considering some kind of compulsion, some kind of incentive to get them there for that original interview. DARLING: I'm looking at a variety of ways in which we can get people to come in and to see what benefits might be available to them, what benefits there will be from being in work, improving educational qualifications and so on. When I've concluded that consideration I will make the appropriate statement to parliament, but what I can say is that all the evidence is, if you look at lone parents for example, the fact that nine out of ten having seen what is on offer have actually joined the New Deal seems to me to be pretty strong evidence. HUMPHRYS: Well, that doesn't quite square with the result of this pilot does it. It's actually one out of ten. I mean the invitations went out to forty-one thousand... DARLING: You're talking about two different things here. HUMPHRYS: No, no, what I'm talking about here... let's get the figures quite clear, for anybody who has felt that the pilot... you had forty-one thousand letters give or take went out to lone parents okay? DARLING: That's correct. HUMPHRYS: We had about seventeen-thousand of those people who were actually interviewed, and then we had fifteen-thousand who went and signed up as it were, for the New Deal. Of those only four thousand at the end of it got jobs. That's the case. DARLING: Let's deal with this in stages. Yes, I think we could do a lot better in terms of the number of people who are contacted, but don't come in for an interview. Of those that did come in for
an interview and actually saw what was on offer, nine out of ten decided to join the New Deal, either go into work or improve their educational qualifications. Now, the figure of five thousand who went into work... HUMPHRYS: Four thousand. DARLING: Well, it relates to the pilot project, and remember they were fairly limited, but if you were to reflect that those people on the pilots who went into work across the country, that would equivalent to something like a hundred thousand lone parents going into work. Let me just make this important point. This is in its early stages, the New Deal has only been running since April. There will be all sorts of ways in which we can improve what we do and the way in which we do it, but the alternative of throwing in the towel, of leaving lone parents, disabled, others simply on the scrap heap seems to me to be completely unacceptable, and you asked me at the outset how do we want to be judged in ten or twenty years time - one of the ways in which I'm determined that we're going to be judged is the way in which we refocussed the Welfare State to ensure that we get as many people as possible into work, to improve their qualifications. Now we're learning through the New Deal, I looked at it carefully when I was appointed, particularly the New Deal for lone parents, and the fact tht nine out of ten people who came in for an interview actually decided to join it seems to me be very compelling evidence to continue with that programme and with other extensions to the New Deal. HUMPHRYS: Let's look at some of the other areas that we both want to talk about. That is, one of them is the Disability Living Allowance. Now an enormous number of people on it as you made clear, double what it was six years ago - two million people altogether. You've said that you will not means test it as I understand, but is there a case for taxing the allowances that they get. DARLING: Well, the Prime Minister has made it clear that we haven't made any proposals to tax it, and I did see Lord Morris.. HUMPHRYS: No, not yet, I'm asking whether you might. DARLING: We've made no proposals to do that, but.. HUMPHRYS: But that's not quite the same is it. I'm asking you whether it is possible that at some stage you might make a
proposal to do that. DARLING We haven't made any proposals to tax Disability Living Allowance. At the moment the whole philosophy behind Disability Living Allowance is to make payments available to people who have got extra needs which wouldn't otherwise be met, but you know if you look at Disability Living Allowance you know there are two problems with it really. On any view, there are some people who at the moment are not being helped in the way that they should be helped. On the other hand, what we want to do is to ensure that the people that get Disability Living Allowance are the people who are entitled to it. And you know when you consider that, you know, a large number of people have got DLA and which isn't altogether clear of the evidence on which those awards were made, clearly we've got to ensure that the gateways to DLA and other incapacity benefits are sufficiently clear so that we pay benefits to those who need them most, and at the same time, and I emphasise this point, that we do more to help people who wouldn't otherwise be helped. HUMPHRYS: Okay, so there will be stricter targeting then, so that you get..... DARLING: Not stricter targeting. HUMPHRYS: Well, what I mean is, what else - when you say there are those people who are getting it at the moment who perhaps shouldn't, doesn't that mean the same thing? DARLING: No, what it means is, that before we award anyone a benefit of any type at all, we need to be satisfied that the evidence is there to justify that award being made. If you look at the Social Security system as a whole we get - there are far too many cases in which there wasn't sufficient evidence to justify an award being made, I mean Housing Benefit is a classic case in point here. But if you look at Disability Living Allowance, what I want to do is to ensure that we get help to those who need it most. Now, that is not happening at the present time. HUMPHRYS: But if you have somebody who is manifestly entitled to it - now let's take somebody who everyone would know I imagine - Stephen Hawking that very famous professor who is terribly disabled, he gets it I dare say, and he's also a rather wealthy chap. He writes books that sell millions of copies. Now, should he be - let me ask the question, should he, even though he's in a kind of super-tax bracket, should he be able to get that money without any tax at all, that's really the question isn't it? DARLING: Yes, but I think if you look at the people who are receiving Disability Allowance, you will find that Stephen Hawking is in a minority, most people are... HUMPHRYS: No, no, of course not but it's the principle and I use that as an illustration to try to get at the principle. There are people who are getting it, who are pretty well off, should they be taxed on what they get? That's the question. DARLING: I've said to you now I think three times, we haven't made any proposals for that. The Prime Minister recently wrote to Lord Morris making that abundantly clear.. HUMPHRYS: Yes, but you haven't said whether you are still considering it. That's what you haven't answered and I've asked you that three times. DARLING: What I've said to you is that we haven't made any proposals to do that. If that situation changes, then, you know, I am sorry but the first people to know will be Parliament rather than On The Record. HUMPHRYS: Let's use the old expressed 'not ruled in, not ruled out'. DARLING: Those are your words, they are not mine. We haven't made any proposals to do that, if that situation were to change in the future, then Parliament would be told first of all. HUMPHRYS: Alright. Incapacity Benefit, now the rules have been tightened up a bit under the last government but you say that it's still, in many respects, too easy to get it. Are you going to make it more difficult to get it in the future? DARLING: No, the main changes that were made by the last government in 1995 was to stop Incapacity payment..Benefit being paid after somebody retired. In other words to pensioners because of course it was never intended to be a pension. No, the problem with Incapacity Benefit is this, that originally it was intended as a benefit to be paid to somebody who was in work, who for one reason or another became sick or was unable to carry on working. What has happened over the years, is that it has been used, in many cases, not in every case, but in many cases, as an alternative early retirement scheme. That was not the intention and clearly the government has got to ensure that people on Incapacity Benefit and receiving that benefit are those for whom the benefit was intended. There's a second point which again your film brought out I thought quite usefully. That is that at the moment you..the government applies one test to somebody coming onto Incapacity Benefit, the old work test, which you either fail or pass. In other words, youare either completely incapable of doing anything or we say that you are capable for whatever comes along. Now, one of the things that we are looking at, as I made clear in the speech that you referred to earlier, is that we need to move away from the present system which asks what you can't do, to asking what you can do. In other words, there are people who at the moment could do something, perhaps with some help and support, who are not able to do that extra to their own benefit, both in money terms and in other ways as well. HUMPHRYS: And those who do get it, should they be means tested? DARLING: Well, when we've got proposals to make you will make them in Parliament. But you know the important point I think is this, firstly Incapacity Benefit has to be targeted on those that actually qualify, those for whom the benefit was designed. Secondly we have to ensure where people can do some work, and many people who are at the moment in receipt of Incapacity Benefit, would like to do something and could do some work, then we enable them to do so. Now, I will be making an announcement in Parliament, setting out how the government proposes to reform the system so that we ensure that benefits go to those they are supposed to go to and we do more to help those people who need that help, both in terms of getting them into work where that is appropriate and also for those people who can't work, providing them with the security that we promised in the Green Paper earlier this year. HUMPHRYS: Right, can I just turn fairly briefly if I may to Bereavement Benefits. Now, are you trying here because you've already said you are going to do something about Widows' Benefits, are you trying here to hold the spending that goes into Bereavement Benefits, Widows and so on, to where it is at the moment. Is that the object of the exercise, trying to cap it, is that what it's about? DARLING: That's not my approach at all. My approach for this benefit, as indeed with most others, is to ask ourselves what it is that we would do if we were starting from stratch today. Now, your film showed the history of Widows' Benefit. It was brought in in the 1940s, when most women didn't work, certainly not after they married and they were totally dependent on their husband who was the breadwinner. Very few of them, something like a hundred thousand, had any rights under pensions or anything like that, whereas now over one and a half million women benefit from pensions and other provision, insurances of course that might be provided. The second problem we've got is of course on any view, this benefit is unfair in that if a man loses his wife and he's got young children, he doesn't get help, you know whereas a woman does. And the third thing is of course that we pay a Widows' Pension regardless as to how well off the woman is, we are not doing that for men. And the final point of course is that we are being challenged in the European Court, so doing nothing is not an option. Now, as I said earlier this week, you could at the one extreme pay the Widows' Benefit to widowers, in other words extend the whole scheme at a cost of about two hundred and fifty million pounds a year, and you'd end up paying quite a lot of money to people who may not need it. Or at the other extreme, you could do something that I've never considered reasonable, and that's the scrap the lot. What we have to do, is to recast this benefit so that it gets help to those people who need it most, because there's no doubt, whether you are a man or a woman, if you lose your spouse, the effect is not just traumatic emotionally but it can be you know pretty traumatic so far as support is concerned. So what I am doing, in this and in every other area is looking to see how I can modernise a benefit so that it is appropriate for this day and age, rather than what might have been appropriate fifty years ago. HUMPHRYS: Alistair Darling, many thanks. DARLING: Thank you. ...oooOooo...