The Americans are celebrating ten years of welfare reform and they really are celebrating.   Signed into law by Bill Clinton (probably his greatest act) and drafted by Newt Gingrich’s Republican Congress, the Personal Responsibility and Work Opportunity Reconciliation Act (1996) has had a transformational effect on American welfare.  These are some of the results as tracked by the conservative Heritage Foundation:

  • "Overall poverty, child poverty, and black child poverty have all dropped substantially…
  • Some 2.9 million fewer children live in poverty today than in 1995…
  • Decreases in poverty have been greatest among black children… the poverty rate for black children is now at the lowest point in U.S. history….
  • Hunger among children has been cut roughly in half…
  • Welfare caseloads have been cut nearly in half and employment of the most disadvantaged single mothers has increased from 50 percent to 100 percent.
  • The explosive growth of out-of-wedlock childbearing has come to a virtual halt."

Welfare reform is just one of the pillars of American compassionate conservatism that UK Tories should learn from.  [Next month Greg Clark MP – chairman of the welfare reform subgroup of Iain Duncan Smith’s social justice policy group – will be writing three articles for ConservativeHome on what he is learning]. 

The situation in Britain could hardly be more different.  Many of Britain’s welfare ills were listed by Sue Reid in a depressing article for last week’s Daily Mail.  New Labour, ‘Nixon-in-China’-style, had a great opportunity to transform welfare in 1997.  It had a huge parliamentary majority, the goodwill of the British people and an economic inheritance that could have paid for serious welfare reform.  Tony Blair’s instincts – as has often been the case – were good and he appointed Frank Field as Minister for Welfare Reform.  But it all came to nothing.  Gordon Brown roadblocked Field’s reforms and Labour rebellions (as yesterday’s The Business reminded us) scuppered the promise of a ‘hand-up, not a handout’.

Because of New Labour’s weakness many more Britons lead lives that are not as free and rewarding as their American counterparts.  Resources that could be targeted on Britain’s most vulnerable people – the very old, the very sick and the very young – are instead being squandered.  And Britain’s economy is ill-prepared for the ever more intense competition from the east.

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