Clarke throws welfare gauntlet

THE Chancellor, Kenneth Clarke, has challenged the right wing of the Conservative Party with a vigorous defence of child benefit and spending on the welfare state.

Mr Clarke, speaking to journalists after his Budget last week, dismissed demands for deeper spending cuts and corresponding reductions in direct taxation. He said that "not a soul" had come forward to suggest how extra billions of pounds' worth of cuts could be made. It was "politically a hugely popular step" to make sure the health service and schools received their share of the money culled from public spending.

Mr Clarke faced a backlash last night, however, when a survey showed that the Budget had failed to restore government popularity.

An NOP poll for today's Sunday Times, carried out after Tuesday's Budget, gave Labour a 32-point lead over the Tories, four points up on last month and the highest since John Major won the party leadership contest in July.

However, the survey backed Mr Clarke's support for the welfare state, including a finding that most people thought more money should have gone to education.

Overall the survey put Labour on 57 per cent, two points up on last month; the Conservatives were two points down on 25 per cent; and the Liberal Democrats were up one on 15 per cent.

Mr Clarke defended a vibrant welfare state. He said that an economy with a declining proportion of its spending devoted to the public sector "still fits with my concept of having the kind of welfare system which delivers high-quality education and health, a welfare system which honours commitments on pensions, child benefit and other central pledges".

Right-wingers have pressed for dismantling parts of the welfare state, and are likely to urge John Major to drop his commitment to child benefit in the next manifesto. But Mr Clarke said: "Child benefit is the one to which we are committed."

Mr Clarke said he expected to deliver another Budget before the next election, and he reiterated the Conservatives' goal of creating a 20p basic rate of income tax.

But he warned that the Tories would not win the election if they were perceived to be bribing the electorate.

Alan Watkins, page 19

Leading article, page 20

Business section, page 3