Liberal Democrat Conference: Field claims Labour will reform benefits

WELFARE STATE

THE GOVERNMENT will introduce compulsory second pensions and scrap housing benefit in its current form before the next election, Frank Field, the former Social Security minister, revealed last night.

Mr Field told a fringe meeting at the Liberal Democrat conference in Brighton that his own proposals to transform the welfare state would actually go ahead, though ministers were not yet prepared to announce such radical changes.

He made clear he had been told the plans would be implemented during this Parliament. This is contrary to speculation following his resignation from the Cabinet this summer that his ideas had been blocked by the Chancellor, Gordon Brown.

Alistair Darling, Mr Field's successor, is due to publish a Green Paper on pensions before the end of the year.

Mr Field revealed that the Government's proposal of a minimum income for poorer pensioners meant that it had already decided it would push through plans to compel all workers to set up private pensions.

Similarly, the Government was set to adopt his suggestion to abolish housing benefit by transferring the cash from landlords to tenants.

The projected pounds 3bn increase in housing benefit spending could be used to raise income support by 25 per cent and to give tenants an incentive to move to cheaper homes if they were allowed to keep the increase themselves.

The MP for Birkenhead also reiterated his call for the Government to include in its next manifesto a pledge to impose a new 50 per cent income tax rate for people earning more than pounds 100,000 a year, a policy the Liberal Democrats adopted yesterday.

Mr Field scotched rumours that he was about to defect to the Liberal Democrats.

Radical proposals to reform the welfare state, including compulsory second pensions and the taxing of child benefit, were overwhelmingly endorsed by the conference, in spite of fierce protests that they went against the very principles of the Liberal Democrat Party.

Nearly 80 per cent of activists at a debate endorsed the leadership motion to shake up social security provision. Under the plans, a second compulsory pension, initially set at the same rate as the current compulsory Serps contribution, would be introduced.

In a further move, there would be a doubling of child benefit for the youngest child in any family with a child under five, funded by taxing benefits for higher-rate tax payers. And the troubled Child Support Agency would be abolished.