By PETER OBORNE Tough job: Secretary of State for Work and Pensions Iain Duncan Smith has shown a personal commitment to delivering benefits reform in Britain There are very few people in public life with finer personal qualities than Iain Duncan Smith, the newly appointed Work and Pensions Secretary. As Tory leader six years ago, he was reviled, humiliated, plotted against and finally betrayed by his own colleagues. Everybody would have understood and sympathised if he had quit politics. But Iain Duncan Smith did not sulk. There were no bitter private briefings. He did not take the usual failed politician's route and enrich himself as a lobbyist, company director or after-dinner speaker. Nor did he write a self-indulgent, money-spinning memoir that seems almost obligatory these days for any politician who leaves office. Duncan Smith, a former British soldier and the son of a wartime fighter pilot, just bashed on. He devoted himself to the study of what is perhaps the most perplexing and yet crucial issue that faces our country today. The former Tory leader wanted to find the answer to two questions. Why, when Britain is more prosperous than at any time in our history, is there also so much poverty and deprivation? And, despite a prolonged period of peace and security, why are crime, homelessness, family breakdown and drug addiction reaching record levels? Iain Duncan Smith set about his mission the hard way. He did not just listen to the bureaucrats, academics and other self-appointed experts on the Welfare State. In fact, he refused to accept the conventional wisdom that the system is so entrenched that it cannot be changed. Instead, he went to see for himself the derelict inner-city housing estates. He talked at length to welfare officers, charity workers, single mothers, drug addicts, prostitutes and the unemployed. This was hard, poorly paid and unglamorous work. But gradually Iain Duncan Smith made a shattering discovery. It dawned on him that the truth was that our welfare state has been making the problem of unemployment and poverty worse, not better. In financial terms, our benefits system, which costs £85 billion a year, may be generous. But it traps people in squalor and deprivation. This is because the system is perversely structured so that there are no proper incentives for the unemployed to find a job. It means that someone who moves off the dole to a £15,000-a-year job may actually find themselves poorer because they lose some welfare entitlements. As Duncan Smith said last week: 'A system originally designed to support the poorest in society is now trapping them in the very condition it was supposed to alleviate.' Daring solutions: Both as Chancellor under Tony Blair, and then as prime minister, Gordon Brown did not listen to radical plans for benefits reform - put forward by a think-tank set up by Mr Duncan Smith It is this absurd system that successive governments have allowed to take root and which explains why immigrants (most of whom come from countries where welfare systems scarcely exist) have grabbed so many new British jobs over the past ten years. It also explains the dreadful fact that our failed welfare state has produced something entirely new in British society: a pattern of long-term joblessness that now stretches through generations. As a result, there are housing estates where neither young adults, their parents nor their grandparents have ever had a job. This, in turn, has produced a long-term culture of dependency on handouts from the State, often buttressed by people resorting to crime to obtain more money. Alarming discovery: Mr Duncan Smith found that a system designed to help the poor was actually trapping them into a life of poverty For the past five years, Iain Duncan Smith has been a voice crying in the wilderness as he examined the causes of these social ills. He set up the think-tank The Centre For Social Justice, which has produced numerous reports highlighting the scale of the problems and proposing ever more radical and daring solutions. But Gordon Brown, both as Chancellor and then Prime Minister, would not listen. Then two weeks ago, in an act of great courage, David Cameron made the momentous - some would say foolhardy - decision to bring Iain Duncan Smith into the heart of government as Work and Pensions Secretary, with the challenge to mend Britain's broken welfare system. Duncan Smith will be in charge of a department that spends an astronomic £185 billion a year - well over 20 per cent of all government spending. It is sobering to reflect that back in 1979, the year Margaret Thatcher became Prime Minister, Britain's welfare bill was a mere £30 billion, a sixth of where it stands today even when adjusted for inflation. Iain Duncan Smith has two main priorities - each awesome in size. The first is to repair the country's pension system. Until recently, the British used to be a famously prudent people with a well-entrenched culture of saving. However, that good financial sense has been destroyed over the past decade, and replaced by an ill-advised craze for borrowing and a shameless dependence on state hand-outs. Second, Duncan Smith must overhaul the benefits system so that it offers the jobless a route back to work rather trapping them in dependency for life (shockingly, a recent statistic has revealed that anyone who has been on invalidity benefit for more than two years is more likely to die than ever return to work). And the present system, as devised by Gordon Brown, is complex, unwieldy and archaic. There are up to 50 types of benefits. Even those who administer this rotten system are frequently baffled by the way it works, let alone those the benefits are meant to help. Above all, though, Duncan Smith's task is to make work pay and to try to stop the poorest people in society being trapped in state-sponsored poverty. But, of course, doing this will cost money because they will initially have to be allowed to keep their benefits after returning to work otherwise there would be no incentive to seek a job in the first place. Also, the establishment of retraining courses will be expensive. At a time of financial stringency, getting the agreement of the cost- cutting Treasury will be very hard. But Iain Duncan Smith is a very tough customer. Unlike most Cabinet ministers, he has no further personal ambition. He does not want to be Prime Minister. He cannot be bought off with a peerage. He cannot be blackmailed, threatened or bribed. He has an open mind and is interested only in one thing: to give fresh hope and meaning to those people who have been doomed to poverty and hopelessness by Britain's sclerotic welfare state. With these, he is uniquely placed to take on and, hopefully, win Whitehall battles that many would not even contemplate. Others have tried to reform Britain's broken welfare state. In 1997, Tony Blair was determined to do so (initially asking Frank Field to 'think the unthinkable'), but lost his nerve. Thatcher had tried but even she failed dismally. Most old Whitehall curmudgeons reckon that Duncan Smith will fail, too. For bear in mind it's not just the ugly battles with the Treasury that loom ahead. There's the adamantine Whitehall culture that automatically resists change of any kind. Duncan Smith will also face bitter political opposition from those with a vested interest in the status quo. These include the Labour Party whose bedrock of support comes from the client state it has created and the Civil Service, many of whose jobs depend on the huge nationwide system which dispenses welfare. Yet no Secretary of State has ever entered a new department as clearsighted or as well-briefed. He has studied the problems, which he has now been asked to solve, for more than five years. His ideas have been road-tested to destruction. His personal commitment cannot be doubted. If anyone can succeed, it is Iain Duncan Smith. Having caved in to the Tory Party over his attempts to neuter the power of the backbench 1922 Committee last week, David Cameron now faces a very awkward task confronting a fresh revolt over the coalition proposal to increase the rate for Capital Gains Tax. A second U-turn in a fortnight would make Cameron look weak. But the problem won't go away. Next month's Budget will pave the way for the biggest and most unpleasant set of spending cuts since the end of the Second World War. Benefits will be slashed, civil servants' pay is set to be cut and big public works programmes cancelled. In these very straitened circumstances, David Cameron risks creating splits in the coalition if he waters down the CGT reforms by extending special treatment to Tory voters with second homes and stocks and shares. As he has already remarked: 'We're all in this together.' SOME may mock John Prescott following news that he has accepted a peerage - but I cannot join the chorus. John Prescott has served his party and his country loyally and can feel extremely proud of his time in office. The House of Lords is full of crooks and time-servers - but Prescott will not be one of them. Furthermore, if anyone has ever deserved a title, it is his long-suffering wife, Pauline.Blair failed. So did Thatcher. If anyone can mend a welfare system ruining Britain, it's this brave man
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Last updated at 12:17 AM on 29th May 2010
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