A sector-by-sector review of social security encouraging more private provision where possible.Claimed advantages:Has produced significant longer-term savings. Lilley’s measures have already cut pounds 14bn a year off the social security bill for the middle of the next century. By 2000, the savings are smaller but still pounds 4bn – before further cuts of pounds 1bn or more due in the Budget. Private provision has been substituted for public in pensions, mortgage interest for the unemployed and, through employers, for sick pay. The UK now has more cash – pounds 500bn – invested in private and occupational pension funds than the rest of Europe put together. Better targeting has toughened entitlement to unemployment and incapacity benefits. Some measures have been taken to pay more people benefits in work, rather than pay them to stay out of work.

Pragmatic, evolutionary, far from uncontroversial, but more likely to be achievable than the big bangs.Mode: EvolutionaryDescription:Lilley’s strategy. Many remain bright ideas that require the resources of being in government to work out and cost. Despite much common ground, still wide differences on individual policy.Backers:Influential figures in Labour and Liberal Democrat ranks and among “the great and good” who have sat on the various inquiries want a more inclusive society and, at the least, an end to widening inequality.Odds:The lines down which Labour is most likely to go if it gets the chance. Some recommendations would make benefits more selective – eg Borrie proposal to tax child benefit.

Big differences between them on degree of compulsion – eg to take second pension, pay into “learning accounts” or undertake work and/or training in return for benefit.Disadvantages:All produce proposals, often not fully costed, that would increase taxes and contributions – certainly in short term. Widespread calls for paying benefits to help people into work rather than keep them out of it. Some common ground there with the Government, but deep divisions over whether that would need a minimum wage Heavy emphasis on education and training. Diverse and varied recommendations, but a broad acceptance of private-sector involvement in pensions and the attractions of funded, rather than pay-as-you-go, schemes Some common ground with Frank Field’s ideas. The Irish government currently has a working group examining the idea and there is some EU work on it.Mode: EvolutionaryDescription:The approach that has informed a string of reports including Labour’s Borrie Commission, the Liberal Democrats’ Dahrendorf report and the independent Joseph Rowntree inquiry. All go much wider than social security.Claimed advantages:Often an attempt to mix and match from the best of the Thatcher years while rebuilding the social solidarity that Thatcher and Major are claimed to have undermined or destroyed.

Others include Samuel Brittan of the Financial Times, the Oxford political economist Tony Atkinson, the Liberal Democrat peers Baroness Seear and Lord Dahrendorf, and Professor David Marquand, former SDP luminary now back with Labour.Odds:Heavily against a full citizen’s income because of the massive organisational and cultural change required But partial schemes may emerge. Supporters of at least some version of the idea range from Alan Duncan, the right-wing Tory MP who believes in an almost non-existent state, to Meghnad Desai, the Labour peer who is an LSE economics professor. Despite its seductive simplicity, other benefits would still be required, for example for housing and for the disabled. Backers argue it could be introduced in stages and for particular groups – an approach that loses the attractions and savings of simplicity.

The existing child benefit is a citizen’s income for children. And Labour’s idea of a minimum pension guarantee would be a form of citizen’s income for pensioners.Backers:Many eminent academics and some politicians from across the political spectrum. If the basic income provided enough to survive on, critics argue it would require enormously high rates of tax on those who work – 70 per cent or more; therefore many might choose not to work. Versions of the idea were explored in detail in government by Labour in the Sixties and the Conservatives in the Seventies.Disadvantages:Not one single idea, but a whole Heinz 57 varieties of different schemes, variously labelled citizen’s income, basic income, negative income tax, tax credits. The existing plethora of means tests would disappear, along with the poverty and unemployment traps and, in theory, much of the black economy. Individuals could afford to take work at very low wages, producing a very flexible labour market.