Dominic Lawson: The way to reduce welfare dependency

Britain has the highest proportion of single-parent households in Europe

Guess which American politician said the following: "This country would be much better off if our children were born into two-parent families ... Once a really poor woman has a child out of wedlock, it almost locks her and the child into a cycle of poverty which then spins out of control." The speaker was not, as you might imagine, one of the leaders of that country's religious right. It was Bill Clinton. Those remarks were uttered in 1993 in a series of remarkable speeches Clinton made about the connections between welfare dependency and child-rearing out of wedlock. They were the rhetorical underpinning of his campaign to "end welfare as we know it".

In part because of ferocious opposition from the elected representatives of his own party, it was not until the end of August 1996 that the "Personal Responsibility and Work Opportunity Reconciliation Act" became law, with the stated aims of reducing both welfare dependency and child poverty, while strengthening marriage. In essence, the measure meant there would henceforth be a limit of five years' worth of state income support for any family in the country, regardless of how many children the mother had.

At the same time, Clinton inaugurated a new system to fund childcare for working mothers. To say that the traditional Democrat left was outraged at these proposals would be a gross understatement. Pat Moynihan declared: "The people who do this will go to their graves in disgrace." Edward Kennedy thundered: "This will condemn millions of innocent children to poverty in the name of welfare reform."

Marian Edelman, the President of the Children Defense Fund, told Clinton: "This will be a moral blot on our nation that will never be forgotten. This is, for me, a defining moral litmus test for your presidency." Her husband, Peter Edelman, resigned as an assistant secretary at the Department of Health, declaring that his boss's new law would lead to "more malnutrition, more crime, increased infant mortality, increased drug and alcohol abuse, increased family violence and abuse against women and children." Another Clinton appointee at the Department of Health, Wendell Primus, also resigned. The New York Times, that most restrained conveyer of conventional left-of-centre opinion, declared that Clinton's measure was "atrocious", adding that, "this is not reform, it is punishment".

Now, exactly 10 years on, what does all that sound and fury signify? Nothing, except for the fact that Clinton was right and they were wrong. As the ex-president wrote himself last week in The New York Times - and how much satisfaction he must have derived from that - welfare rolls have dropped from 12.2 million in 1996 to 4.5 million today. The same period witnessed the first sustained slowdown since the Second World War in the percentage of American children born out of wedlock. Over the same 10 years there has been a doubling in the employment of both single mothers, and never-married mothers. The poverty rate among single mothers - which in the US equates to an index-linked income of $17,000 for a woman with two children - has fallen from more than 50 per cent in 1995 to less than 42 per cent today.

Clinton, for whom black voters had always been a vital constituency, also pointed out in The New York Times that the poverty rate among families with black children had fallen from 41.5 per cent to less than 33 per cent. That is a figure which might still strike many in this country as unpardonably high. But the fact remains that Clinton had proved wrong the forecasters of doom in his own party, in direct proportion to the wildness of their claims of 10 years ago. Some, to their great credit, have admitted their error. For example, Wendell Primus, back in 2001, told The New York Times that "in many ways, welfare reform is working better than I thought it would. The sky is not falling in. Whatever we have been doing for the past five years we ought to keep going."

What they had been doing was to demonstrate the truth that welfare dependency is as much an attitude of mind as a way of life. With the right incentives, a vast number of families can be lifted out of an almost hereditary dependency on the state. As Clinton argued back in the early Nineties, one of the biggest causes of the growth in inner-city crime was "the breakdown of the family ... and the absence of work". It's not yet possible to demonstrate that the dramatic fall in the crime rate in the US in recent years is part of the consequences of welfare reform. But the claims that Clinton's measures would increase crime are completely discredited.

Some of Clinton's critics have been less contrite than Wendell Primus. They have argued that the unprecedented reductions in poverty and increases in employment among the least well-off are simply the effect of sustained economic growth. Yet during the earlier periods of rapid growth, in the late 1960s and early 1970s, there was no significant drop in welfare dependency. Dr June O'Neill, the director of the Congressional Budget Office under Clinton, has conducted a detailed analysis of this phenomenon, and her conclusion is that about only one-quarter of the growth in employment and reduction of benefit claims among the least well-off since 1996 is due to the growth in the economy: the rest she attributes to "changed policies".

The European Union might seem like a polar opposite to America in this regard, but the truth is more complicated. Figures released last week by the European Community Household Panel showed a striking correlation between benefit levels and the number of single-parent families: in essence, the greater the benefits, the more of them there are. Britain has the highest proportion of single-parent households, and the highest level of benefits for single mothers (apart from Denmark).

Ten years ago, while Clinton was trying to sell the idea of welfare reform to the American people, Tony Blair was touring the editorial offices of right-of-centre newspapers, telling us that we should support him because only New Labour would be able to carry out similar radical change in this country - I seem to remember Blair using the phrase "Nixon in China" by way of analogy. Many of us believed him. He certainly believed himself. He charged Frank Field to "think the unthinkable". Frank did, and was sacked in the year that a mere 10 per cent of Labour MPs voted against single-parent benefit cuts. Clinton's resolve was much stronger: the Democrats split 96 to 96 in Congress over his Welfare Reform Bill.

As a result of Mr Blair's failure of nerve we now live in a country where almost 4.3 million Britons are on either unemployment, incapacity or lone-parent benefits, while at the same time an unprecedented number of new jobs are being taken up by hard-working Polish immigrants. What a legacy.