Saturday, May 07, 2005

David Blunkett's return

Had I known that David Blunkett would return to Government as the Secretary of State for Work and Pensions I would have been tempted to vote Labour!! As Home Secretary, he sought to overturn centuries of constitutional traditions in the UK such as trial by jury and suspending habeas corpus. Whilst I fundamentally diasgreed with these measures, he was certainly prepared to "think outside the box", will he do the same to the Welfare state?

His first goal will surely be to overhaul the currently bloated Invalidity Benefit paid to 2.7m people. The Welfare State We're in highlights some of the many disincentives to work for the "sick" and disabled people currently in receipt of the benefit. No Conservative Government could ever be "trusted" by left-wingers to introduce reforms to overhaul such a pivotal element of the welfare state that David Blunkett will hopefully seek and introduce.

His other goal will be dealing with the long term pensions crisis. Will he solve it by making long term savings compulsory or increasing the private sector retirement age to 70? Dare he battle the unions and raise the public sector retirement age to 65? Would Gordon Brown allow such a fight as he jostles for the vacancy at the top? Blunkett may try to make long term savings compulsory, but with a dip (at the very least) in the economy on the way, Gordon will not want consumer spending to fall further by making consumers save more and spend less, especially as taxes increase. Otherwise, the policies would surely result in a full on recession, destroying Gordon's image of a prudent Chancellor whose fine stewardship ended "boom and bust" in the economy. It would also make Gordon's working assumption of becoming Prime Minister a little harder to achieve.

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