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DERMOT MURNAGHAN: According to a poll this morning, two thirds of the population think the welfare system is broken. Before the break we heard how the coalition has set out to reform it so where do Labour stand? Well I’m joined now by Labour’s Shadow Financial Secretary to the Treasury, Chris Leslie, a very good morning to you Mr Leslie. As I say, in the polling two thirds of the British public thinks there’s something wrong with the welfare system, is Labour’s position effectively this, that if we get growth, if we get virtually full employment, we can carry on paying out the same rates, the same entitlements?

CHRIS LESLIE: No, I think we have to have a situation where welfare is continuously reformed, especially given that society changes. My generation is very different to the generation of families two and three decades ago and so you have to constantly make sure that the social insurance system which is there ultimately to protect people who fall into disability or ill health or lose their jobs as a safety net.

DM: But people feel it has gone beyond that now and there are people abusing it.

CL: You have to have reforms and that’s why I think you have got to make sure you base those on principles. Now the danger that we have is a government that is relishing the opportunity to do down some of the key social insurance protections that are necessary for people who need help if they lose their job, they don’t necessarily have their own trust fund or their own inherited fortunes to fall back upon and that’s why I think people have been so shocked really to see the government almost using any opportunity of any particular story that comes along to hit the system over the head.

DM: But a lot of people though are shocked, according to the polling and it’s not just this weekend’s polling, people are shocked by the number of families of people who can get what is effectively hundreds of thousands of pounds worth of benefits and Mike Philpot, the figure has been raised, but it was said the income in that household was as if he had been earning £100,000 a year.

CL: This is the argument that the Linton Crosby strategy, the George Osborne strategy, they are trying to take one appalling example and then twist that as though it should be the driver of the reform of the whole system. What you have to do I think is to make sure that you incentivise work and that absolutely has to be at the centre of everything. You can’t allow a situation where people can go for years and years without being in work and that’s why we would have a …

DM: But to take that snapshot, it’s that snapshot that allows people to have that wider debate. It’s not about that one family or families …

CL: Well you just put it to me that because George Osborne raised that particular issue …

DM: Exactly and this allows you to then say is it fair, is the system right that allows that, albeit admittedly very rare situation, but allows a situation like that to develop?

CL: I don’t really think it is appropriate to use that absolutely horrific case as the basis to then go into welfare discussion but I think there is a totally separate question about how you reform welfare to make sure you incentivise work and for us the key thing would be a compulsory jobs guarantee. What you have to do is to make sure that this work programme that they have currently got, that is literally worse than useless, only two I think out of every one hundred placements have resulted in sustained employment. What you have to do is say if you’ve been on long term unemployment we can offer you this opportunity at a minimum wage, decent work, you have to take it and similarly …

DM: And what happens if you don’t, how tough would Labour get, would you withdraw all benefits?

CL: You would have to forfeit some of your social insurance protections because of course it should be about everybody pulling their weight in society. That is what …

DM: Would you lose your housing benefit, what are the sanctions?

CL: Well the sanction would be of course that you don’t get your unemployment social protection insurance if you are refusing to take up decent job opportunities that are presented as part of that process. It has to have some tough decisions taken here but let’s not be under any illusions, don’t get away with the idea that George Osborne’s reforms are helping people back in to work. The tax credit cuts that they have put in place are actually making it more difficult for people to afford that step into opportunity and now they are even talking about freezing or even cutting the national minimum wage. Now if you basically make work so unattractive in that way you are going to continue to see the welfare bill spiral and that’s what they have been doing. Dermot, the welfare bill under George Osborne has gone higher and higher because of the costs of the …

DM: Because of the economic difficulties.

CL: … and that’s what he wants to distract people away from.

DM: Let me ask you about the politics of it all though. I mean you are worried, aren’t you, in Labour that you are getting on the wrong side of the argument, given the polling, given the public feeling and we see Liam Byrne, the Shadow Work and Pensions Secretary, writing in the Observer today, promoting the idea of relinking of the original I suppose Beveridge dream of making clear that your benefits relate to what you pay in, a contributory system. Are you serious about bringing something like that in?

CL: I think you have to go back to some of those core principles and say the contributory process, that notion that you somehow are getting back for the amounts that you put in, it should be better reflected in the welfare system but I think it comes back to the different strategies of how Labour would approach these things from the Conservatives. George Osborne has been rubbing his hands together at the opportunity to slash away at some of the key social protections, and we’re talking about people who are frightened about losing their jobs or they are in serious disability and all those other areas where the changes he’s been making are actually harming people’s lives. What we have to do is help them into work and it’s got to be orientated around job opportunities because that’s the sort of reform we have to have.

DM: Mr Leslie, thank you very much, Chris Leslie there.