Politics: Brown's balancing act on welfare

The tough and tender elements of Labour's "New Welfare State" could be fleshed out further in a Commons statement from Gordon Brown this afternoon, as Anthony Bevins, Political Editor, reports.

The Chancellor of the Exchequer's outline statement on next year's Budget, to be delivered for the first time in Parliament today, will restate his determination to create a shift from welfare to work.

But with scare stories about welfare cuts generating unrest among Labour MPs, Mr Brown will need to temper his "iron chancellor" image with assurances about the "fairness and justice" of the Government's long-term approach.

The Prime Minister told the Commons yesterday, in a report on last week's European "Jobs Summit", that he wanted to combine "job creation with a fair and cohesive society".

And David Blunkett, Secretary of State for Education and Employment, told an Institute of Directors' dinner in London that if unemployment was to be brought down permanently, business would have to look much harder for new recruits.

"Those currently excluded must be included," he said. "Those currently without skills will be able to acquire them, and those who previously became victims of change will in future be a part of that change."

But as Alistair Darling, Chief Secretary to the Treasury, said in a speech on Sunday: "The welfare system must be geared to promoting employability. For too many people, getting a job brings little additional benefit to the family income. "

The Commons Social Security Select Committee yesterday delivered an interim report on "Tax and Benefits", in which it looked forward to "some clarity" about the Government's objectives for low-income groups, in and out of work.

While it had much information about the affects of the poverty trap and the unemployment trap, it had few clues as to what the Government planned to do about them.

One other question that has not yet been addressed, was raised yesterday by Iain Duncan Smith, the Conservative social security spokesman.

"One of the alleged strengths of the Government's welfare-to-work scheme," he said, "was that it would not afford people a third option between work and welfare, ie. a life on benefits.

"Those under-25s out of work for 26 weeks would have to participate in a training scheme. The logic that unless time limits are imposed, claimants would be less likely to actively seek work, has been adopted by the Labour government, but only in part. The lone parents taking part in the programme are under no such obligation, irrespective of the age of their children."

If compulsion is introduced for lone parents - or for the disabled - then Labour's smouldering revolt could become real.

But as that could go against the grain of the "fair and cohesive society" Mr Blair spoke of yesterday, that possibility would appear remote.