‘Radical’ rethink of welfare state crucial for Labour

He claimed that the benefits system had “skewed social behaviour” and was never intended to be a form of “unearned support”.

Speaking on the 70th anniversary of the William Beveridge report that provided the blueprint for the welfare state, Mr Byrne said the system was no longer in tune with the Liberal politician’s ideas.

“Beveridge would have wanted reform that was tough-minded and asked everyone to work hard to find a job,” Mr Byrne said.

“He would have worried about the ways his system had skewed social behaviour because he intended benefits to help people who had their earning power interrupted because of illness, industrial injury or the capriciousness of the trade cycle.

“He never foresaw unearned support as desirable.”

In an indication of the direction Mr Byrne would like to move Labour policy on welfare, he pointed out that Beveridge wrote: “Unemployment benefit after a certain period should be conditional upon attendance at a work or training centre.”

Mr Byrne is also critical of the spiralling housing benefit budget, which he says is “simply too high”, and the lack of incentives for long-term savers.

His criticism of the present system may face opposition from left-leaning Labour politicians fearful of the coalition Government’s moves to curb benefits.

But he said Labour had to become “the radical reformers once again”, adding: “One more heave behind our old agenda won’t do.”

The Government has been faced with criticism over its own plans to reform the benefits system, including reducing the burden of high rental costs for some homes paid for by the state.