................................................................................ ON THE RECORD INTERVIEW WITH DONALD DEWAR MP RECORDED FROM TRANSMISSION BBC-1 DATE: 7.2.93 ................................................................................ JONATHAN DIMBLEBY: Donald Dewar, let's pick up some of the themes of that film. Let's start with the image of the Labour Party. Its tradition, its history, what it's said in the past has left in the public mind - and I'm sure you'd agree with this - a sense, fair or unfair, that the Labour Party is the tax and spend party. That it's the party that will take from those who have in order to redistribute to those who have not. Would you agree that in the nineteen nineties and beyond that image is an albatross for you? DONALD DEWAR, MP: I certainly think that it's become a disadvantage, that it's become a caricature. I don't think it's a fair image of the Labour Party and I believe the principles that we stand for are ones to which people will respond, but we must shift the emphasis to some extent, and if you're building a policy for the benefit system or a social policy at the moment, you can't do it and you shouldn't do it on the assumption that at some unspecified point in the future you'll be able to devote enormously increased resources, and I certainly don't take the view that the answer to the problems of the Social Security Department is just spending more money within the framework of the present system. I think there's got to be radical change, not to help the Chancellor - that's not the way we should approach it - but in order to help those who are in need and those who are struggling in our society where the divide, the economic divide between those that have and those have not, is in fact widening all the time. DIMBLEBY: Now, that's very interesting. If that's the case and if you are, therefore, not just going to be able to spend and spend, but to spend what the country has earned, and I presume without increasing taxation at all, except perhaps at the top end.. DEWAR: Well, again I make the point to you Jonathan, and I'm sure you accept it, that we are probably a couple of years away from an Election and we don't know what kind of situation we will in fact discover. I mean we know we're running a public sector deficit of forty-four billion at the moment, or something of that order, and that, for example, is an enormous inhibition on any Chancellor, even a Labour Chancellor. DIMBLEBY: I understand that, but insofar as the image is there, one of the best ways of dispelling it is to make it clear, as you have done, that you're not the spend, spend and spend again Party taking whatever tax there is to do it, but that you have to be the Party of growth rather than of tax. DEWAR: I'm sure that's right but sticking to my area of responsibility - the present DSS budget is around eighty billion pounds. Now I don't know anyone left, right or centre, in British politics - I certainly don't know anyone who's in touch with what's happening on the ground - who isn't aware of the bitterness, the frustration, the disappointment, that is still built in to the system. It's not delivering as effectively as it should - there's one pound, or almost one pound, in every three spend by Central Government, and one of the objectives of our very, very radical look at the whole system is to try and ensure that that money is spent in the best possible way. DIMBLEBY: Now let's look at that more carefully then. You've got to demonstrate spent in the best possible way, you have to convince the electorate that you aren't spendthrift with the money - you've got to have value for money, a return, as it were, on the investment of those who are taxpayers. DEWAR: Certainly, but I think everyone's got an interest though in ensuring that we've got a system that enables, that empowers, people who want to earn their own keep - they want to better themselves. After fifteen years under this Government, Ministers are turning round and saying we've got a safety net system that isn't very effective and a safety net system which is often a disincentive. Well, whose fault's that? And can we do something to improve on it? DIMBLEBY: OK. Well, let's look at what has been the hot issue of the week. How to deal with the problem of the unemployed - in particular, the long-term unemployed - huge numbers of people and increasing. Do you think it is right to consider openly how it is that you can best deliver value for money in money that is paid out in welfare to those who are unemployed, both for their own sake as well as for the sake of those who are paying that money, namely, the taxpayer? DEWAR: I think it's a false distinction to say, you know, value for money, and the interests of the long-term unemployed. I believe you can put the two together. It's important that they get an opportunity. Clinton was mentioned. I don't believe that Clinton is the model
necessarily we should follow. There's lots of other countries' experiences we might draw on, but I certainly believe people should get a chance under the welfare system, which is one of the points that he makes, and I don't believe that that has been happening as it should. If you look at Sweden, for example, which is perhaps a more productive area for parallels. They spend just about the same percentage of our gross national product - of their gross national product - as we do, and yet they spend an enormous amount more on training and on dealing with the direct problems of the individual person in unemployment. We spend an enormous amount more than they do on paying for dole. In other words, nine thousand pounds a year it costs to keep someone on the dole.
If we could cut those numbers and spend money more on, in fact, creating opportunity for the unemployed that would be very sensible. DIMBLEBY: They do also - and it's an interesting example that you take without going into the details of it - they do also have an element of what you might call responsibilities in return for rights, or what the Americans might call an element of compulsion. That's to say, they do expect that people should work for their benefits, those bigger benefits. Now, is that something to which you're attracted? DEWAR: I don't say I'm attracted and certainly not in the sense the Prime Minister has been using it, or appears to have been using it, and in the sense which it has been roundly condemned by Mrs. Shepherd and by in fact every one of the Employment team in Parliament. I think that we can get hung up on the compulsion argument. I don't like compulsion. I accept that the system at the moment has got it. Re-start, the actively seeking employment rules, all have elements of penalty and compulsion in them, so it's not a new concept in our system, but I certainly don't want to see the long-term unemployed left in a position where they have to take a job which may seem to them to have little future, in return for a dole payment, or dole-plus of a very limited sort, and then being told if they don't do it they'll be left literally high and dry without any income. But if you are saying to me that we've got to get systems which aren't simply a weekly payment and leave them to their own devices, you've got to get a system which gives real training, real opportunity, gets them back into the job market, even in a limited sense. Yes, I'm very keen on that and that's where the Swedish model comes in and where, for example, we might look back - as I know many Conservatives do - to the old community programme, where there was no shortage of volunteers. I think that's the key, Jonathan. At the end of the day, there's an enormous number of people trapped in the dole queues at the moment who would like to earn their keep, who would like to be involved (as we've proved with the Community Programme) and, of course I think there's an enormous field for imagination and innovation. My fear is that when I listen to Norman Lamont, or if I listen to Mr. Peter Lilley, that these schemes will be ruled out simply because they cost too much. DIMBLEBY: Yes. Now let's look though a bit more closely at what you would do under these circumstances. You say that you would like to have proper training, a proper investment in individuals so that they could return into the labour market and you cited again the Swedish example. Are you prepared, obviously you hope and probably correctly imagine that most people want to have work, most people will be delighted to have training. It's going to cost, it's going to cost more than is presently spend as you've identified, it would cost more than probably is being spent in the past, even under Labour governments, given the numbers that there are who are
unemployed. Is it on your agenda to consider that the element of compulsion which you described as already existing, should conceivably be to some extent extended in return for a better quality deal. DEWAR: Well I think there are rights and obligations but I don't think you need to parade compulsion as part of this agenda. DIMBLEBY: What's obligations mean then? DEWAR: Well, obligations mean exactly the obligations that people showed they were prepared to fulfil when the Community Programme was in operation. They weren't getting the top rate for the job in the full sense, I mean, clearly there was a limit to what you could earn, there was a limit to the number of...the period you could work but people were queuing up for it and I think anyone who has been in the field will tell you that there are still examples of the work done under the Community Programme, valuable and sensible work which was appreciated for its own worth. But all I'm saying to you is let's not underestimate the willingness of people to co-operate. Pressed labour is never good labour and I don't think that you need to rely on that on that particular principle. DIMBLEBY: That's understood but you are saying that there's no reason to rule out an element of obligation being built into improved training and extended preparation for those who are out of work before they are able to take up a place in the job market for real. DEWAR: I believe there are obligations, it depends how you define them. What I don't think... DIMBLEBY: Give us... DEWAR: You don't need to define them in terms of extending the tragedy we've had with the sixteen and seventeen year olds in this country, where people have been told, you've got a guarantee of a training place, very often that guarantee has turned out to be a sham or indeed, absent and about a hundred thousand have been left literally with no means of support and if you go and talk to anyone who is, for example, working with the young jobless, they will tell you what a disaster that has been. I don't want to go into that kind of obligation... DIMBLEBY: I understand that, but give us a sense of the kind of obligation that is in your mind, I'm not saying, what is the defining characteristic of obligation but what is the kind of thing that would conceivably make sense? DEWAR: I expect people who are unemployed and who are drawing benefit, I expect them to respond to opportunities that are given to them. There is a menu of choice, if there is a chance then I expect them to respond to it and I think that they will respond to it... DIMBLEBY: And if they don't? DEWAR: I think the problem..well, if they don't, they're going to end up of course in a disadvantaged and prejudiced position simply because they're no longer competing effectively in the job market and very few of them will want to put themselves in that position. DIMBLEBY: And they would economically suffer as well in the process... DEWAR: Of course they would economically suffer because they are not earning their keep, they're not advancing their prospects, they're not standing by their family and I don't think many people would want to prejudice themselves in that way. What the problem about this is is the cost, I freely concede that but I go back, we'll have to do, obviously, a lot thinking about the detail but I go back to the fact that if you can take people out of the dole queue, save the Treasury the nine thousand pounds a year in lost tax revenue and direct benefit payments and so on that they're costing at the moment, then I think the sums may not be as formidable and at least we can make a start. DIMBLEBY: Okay, let's look at another area where conceivably you could find ways of demonstrating that public money is spent with return on that money, value for money, your very own phrase. We heard a
Treasury spokesman talking about replacing universal child benefit with a targeted child benefit. How attractive an option is that to you? DEWAR: I'm not frightened to discuss targeting, I think anyone who looks at the Social Security system will be anxious to make sure that we get help to the people who need it most, I think that's what it's all about in many ways and we're bound to have targeting. We talk about the universal benefits but there is a whole world, a whole hotch potch, mish mash, of targeted benefits of one sort or another and many of my constituents are caught among them. I think there's a great problem of simplification in dealing with these problems, so I don't rule out that discussion of that, the trouble with targeting, right, is take up, that people don't take up their benefits, the trouble is that very often you find it is a disincentive to work because if you increase your income by a limited amount you find that you lose so much - you're paying a rate of tax - fifty, sixty, seventy per cent - which would make the richest in the land blanch, and, of course, there is the problem of stigma. So, I mean, I don't think it's a, I mean, it is not a simple solution, if we can minimise or crack some of these problems, then clearly there is a possibility of looking at it.. DIMBLEBY: And put it at its lowest, universal benefits in relation to child benefit are not sacrosanct, that's what you are saying. DEWAR: Well.... as has been made clear, this is a radical look at the whole system. I have to say to you I can't anticipate what will come out at the end of the day, and of course we will look at anything but.....can I make just one other point it is important, I mean I am very conscious of the needs - I mean the most vulnerable people in our community are often families on low pay with a large number of children and I am certainly not going to be a party to the removing child benefit unless I am satisfied I am putting in its place a system that is going to help and deal with the problems of child poverty. DIMBLEBY: Does the same in principle apply to pensions. DEWAR: Well I think that the basic old age pension, which has been a contributory system and has been sold as such, I mean, there is an argument whether it is really contributory because the pay as you go system as you know that raises interesting subjects about the future of the National Insurance System for example, which is another area we ought to be looking at. But, I mean, I certainly believe that the present basic old age pension should not in fact be means tested, that's my personal view, but let me say to you that I have been attacked week in, week out by Mr. Peter Lilley on the basis that the secret of the agenda is to means test the basic pension I now..he treated us with contempt for suggesting it, I now open my papers this morning to discover that is exactly what the Tory agenda is. DIMBLEBY: Okay, which takes me onto my next point, just let me summarise where I think we've got to, you don't like the word a compulsion in relation with working for the dole, but you do recognise the importance of responsibility and if people don't exercise that responsibility, they would inevitably suffer as a consequence. DEWAR: They penalise themselves. DIMBLEBY: They penalise themselves because they wouldn't have so much money apart from anything else. In the case of child benefit, the question of universality of that benefit is up for discussion, you haven't come to a solution but it's certainly on the agenda for a radical discussion, ditto in the case of how to ensure in pensions that those who most need pensions, who get the most effectively, might mean an end to universal pensions. DEWAR: No I didn't say that, I said that I thought that the basic pension should not in fact be means tested, what I would say to you though that it is quite clear that you are going to have to top up beyond the basic pension and you are going to have to in fact deal with the problems of those who aren't in occupational schemes, aren't in personal pension schemes.... DIMBLEBY: Without being the spending party... DEWAR: Well we've got that problem now. Now the best way of doing it, how we can do that humanely, I mean, is it right that one and a half million pensioners are in the Income Support System at the moment. The government says that is a positive advantage to them because of weighted pensioner premiums within the Income Support System. I'm not satisfied with that situation and in that area there is a very real and lively discussion. DIMBLEBY: Let me put to you a problem that while you agonise over this, the... DEWAR: ....it's not that painful I hope.. DIMBLEBY: ...a very interesting debate you have over it, discussion, full, free and frank as they say, but while you do that, the Liberal Democrats on this front, the Tories on this front, advance and you end up following them after when it comes to the election, as the little Sir Echo Party saying, me too, we're there as well, don't worry. DEWAR: I don't think there is any danger of that at all, I'm not aware of what the Liberals are saying, but that's perhaps
my fault. The Tory message is totally confused at the moment, Labour will have a radical agenda, we will be equipped for the next election and one to which people will respond. DIMBLEBY: Donald Dewar, thank you very much. ...oooOooo...