Labour Conference: Welfare Reform - Darling signals support for second pensions

THE SECRETARY of State for Social Security, Alistair Darling, unveiled his vision of a modernised welfare state yesterday with a strong hint that the Government was set to back private second pensions for all workers.

He told the conference the present system badly needed to catch up with changes in employment, the family and an ageing population. The state pension would continue to provide a vital safety net for poorer elderly people, but able-bodied workers had a duty to take out second pensions. "We know the problem. There are too many people who can save for their retirement who are not saving and who need to save more. They have a responsibility to do so."

Mr Darling said the autumn Green Paper on pension reform would have "personal responsibility" at its heart and that "enabling" services, not just cash, should be offered by the welfare system.

But he did not say whether the Government would make the second pensions voluntary or compulsory, as urged by the former reform minister Frank Field. Mr Darling said a modern welfare state should not be "a passive system responding to failure", but should instead use private and public sectors to enable people to provide for themselves.

"Beveridge was a man of his time. But if he were alive today, he would want a different system," he said. "The world now is not the world that faced Beveridge. Too much of what the welfare state does is out of date. And too much of what it does it does in an out-of-date way."

Every benefit would be subjected to review to ensure it met the needs of the modernised welfare state. Despite opposition from disability campaigners, he refused to shy from reform of the complex system of incapacity benefits and vowed to end the Tory ploy of using it to hide mass unemployment.

Echoing suggestions that benefits claimants will be issued with "smartcards", he said the social security system would be transformed by modern technology.