Over the Haagen-Dazs the talk is all of the end of poverty

Polly Toynbee the real agenda

There is only one game in town - the "underclass" and how to kill it off, throttle it at birth, ethnically cleanse it into oblivion. The ideas buzz through every airless corridor and jam-packed bar.

Wherever two or more people are gathered together, wherever clumps and cabals cluster around ministers, the key words waft up into the air as you pass by - sink estates, homelessness, crime, unemployment deserts, out-of-control children, poor pensioners. Words like welfare, Wisconsin, worklessness are sprinkled with the latest statistics. Newest pilot scheme results are swapped eagerly. What works? How do you do it? How do you pay for it? It's all they want to talk about.

And all this is from a Labour Party said to have lost its soul in the attempt to keep Middle England and the Daily Mail happy. They have performed this trick by talking publicly about "the family" or crime to satisfy the punitive and moralising tendency, while in reality working to end poverty. Talk loudly, but carry a very small stick.

But this is no longer an age for big political ideas or sweeping grand plans. It is pocket calculator politics, micro-policies, micro-management - what works, only what works. Each "underclass" denizen must be helped into work, cajoled, coerced, encouraged back into mainstream life. Not in the old ways with giant imaginary levers of policy devised by macro- economists to alter hypothetical patterns of human behaviour. It's about each person having a personal adviser on the ground, someone to see them through the fog of hopelessness and the maze of over-lapping bureaucracies.

I came across a plethora of ideas and plans from virtually every department. Ministers and their juniors talk breathlessly like newly trained social workers, starry-eyed, full of hope that leaves some wise old heads worried about the dangers of their future disillusion.

First there is the new Downing Street Social Exclusion Unit, designed to drive policies across departments, partly in Whitehall but mainly knocking heads together on the ground. They will target the nation's 1,370 worst estates, where 40 per cent of all crime is committed. Unemployment is no longer regional, but in such small, local jobless blackspots. Each now has been invited to bid to become Employment Zones and Health Action Zones, to embrace everything that moves and breathes in one area - jobs, training, buses to work, health, crime, drugs and sink schools. In their eyes you see the visions of new Jerusalems rising from the ashes of hell- hole estates. Great if it works, but it won't be easy.

But at least after all these years of governments massaging figures to reduce the size of the unemployed register, this government is actively seeking out those not on it. That means setting themselves far higher targets of numbers into work - among them the million extra people Harriet Harman says are now claiming sickness benefit. People have become no iller in the last decade: many of these are men in their forties and fifties, the hidden unemployed pushed off the register to waste their lives on sickness benefit at a cost of millions.

Yet it may not be easy to get them to return to work in the way that the single parents have been persuaded. (Pilots apparently show that one in three single parents is returning to work after just one interview.) Can the same be done for the sick? Gordon Brown's surprise new target of full employment will mean creating government jobs in intractable areas. What sort of jobs? One plan is for the police to run local crime prevention teams, enlisting local people on estates to patrol and protect their own area, under police training and management. If it sounds alarmingly like Guardian Angels or vigilantes, you are reassured with the insistence that it works in Holland.

There is plenty of the unthinkable too. Whispering lest Barbara Castle hears, there are those who dare suggest that the whole national insurance paraphernalia is a vastly expensive anachronism, invented 50 years ago for a very different society. Not now, but some time it may be right to take the state pension away from the richer pensioners to give to the grindingly poor. And isn't it time to filch the fat tax relief on pensions for the rich? No, behind the scenes they are not faint-hearted.

There was something vaguely threatening about the tone of Tony Blair's announcement of a new ministerial group on the family, yet behind the scenes the talk is of a radical scheme to tax partners together again, redistribute the savings and double the rate of child benefit - which would offer the biggest single step out of unemployment for many women.

All this and more is in the air, some happening soon, some later, some maybe never. Meanwhile trouble has blown up over Frank Field's role. He has taken upon himself an almost impossible task - to devise a grand overarching welfare reform that smacks more of the old politics than the new. Divesting himself of all other tasks, he is spending night and day drafting a Green Paper that may (or may not) appear next Christmas. He is saying nothing to anyone (not even his colleagues, alarmingly) about what's in it. He told me, he wants it to be a Big Bang. It will be, he says, a "philosophy of welfare".

Yet as he writes, that philosophy is being written on the ground all around him, his pen racing to keep up with what everyone else is actually doing. That may be why he has been dangerously, publicly thrashing around of late, having promised magic big solutions in a micro policy world. What works is all that counts now.

In all this, the government is taking a noble but high risk strategy: these social problems are deep-seated, expensive and from the experience of other Labour governments, profoundly intractable. The Government is asking to be judged on its ability to transform the people who are the most difficult to change. Huge effort makes small change in the underclass. Will they keep up their infectious enthusiasm when some schemes fail miserably? Do they have the stamina to pick themselves up and start all over again and again and again? At least if the economy is half as good as promised, then they have the best chance ever of succeeding.