Politics: Blair tightens grip on levers of power

The Prime Minister tightened his grip on Government policy yesterday, taking charge of a public campaign for welfare reform and setting up a new ministerial control unit in No 10. Anthony Bevins, Political Editor, examines moves that could squeeze the Chancellor's power base.

Tony Blair will tonight take the lead in a concerted public campaign for welfare reform, effectively grabbing control from Gordon Brown. He is searching for a more coherent and considered approach to a problem that has so far been tackled piecemeal - as with lone parents' benefit and the threat to disability benefits.

But the Prime Minister also announced last night that a new six-strong Strategic Communications Unit had been set up at No 10 "to make sure events are scheduled, launched and followed through to maintain impact and to convey the central story and themes of the Government."

As the Treasury is seen as the prime culprit for working in isolation from others, one of the unit's tasks will be ensure that the Chancellor's staff are working "on message".

There was extreme annoyance inside Government this week that while the Prime Minister was asserting his authority over welfare reform, the Chancellor's aides were once more floating "premature and unhelpful" proposals for the taxation of child benefit and the abolition of child benefit for 16- plus schoolchildren.

In the context of separate speculation that pensions could be curbed for the better-off, Mr Blair said during Prime Minister's Questions: "There is really no point in conducting a review and inquiry and then giving out what are possibly speculative proposals before they are properly considered. It has to be done in a proper and serious way."

In a speech to party workers in Dudley, West Midlands, tonight, Mr Blair is planning to say: "The status quo is not an option. Long-term, thought out, principled reform is the way forward."

He will reassure those who depend on benefits - and restive Labour activists: "Those in genuine need will always get help and support from a Labour government. That's my guarantee."

But the imperative for reform will to be underlined by a series of fact- files to be issued by Harriet Harman, Secretary of State for Social Security.

They will say that in 1949, the first full year of the Welfare State, 13.5 pence in every pound went on social security benefits, compared with 18p in 1971, and 30p today. With welfare benefits now costing the equivalent of pounds 80 per person, per week, 30 per cent of payments went to the poorest fifth of households in 1994-95 - compared with more than 40 per cent for the poorest households in 1979.

At the same time, it is estimated that pounds 4bn a year is now wasted on fraud; enough to build 100 new hospitals.

The Prime Minister told the Commons that welfare reform was required because spending was rising while poverty was getting worse. "That is plainly an unacceptable situation and one that we want to change."

Commons exchanges appeared to bring agreement between Mr Blair, William Hague and Paddy Ashdown on the underlying principles for reform but no consensus on how the issue should be taken forward.

Polly Toynbee, page 23