We propose that we need a welfare system that is based on the needs and circumstances of the citizen. The Government's Green Paper, "In work, better off: Next steps to full employment", published in July 2007, very tentatively edges towards some of the ideas and policies we have described. However, these tentative steps fail to live up to the rhetoric of its ambitions. There is an opportunity to plot a course for the next ten years to deliver a welfare contract that is more fair, simple and empowering. Such a system would be capable of placing the citizen at the centre and in doing so will move further down the road to full employment and social justice.

Despite rising employment, more than 3.5 million people are not in work and are claiming benefits, which is about the same as in 1997 when the Labour government came to power. At the same time, levels of benefits have not kept pace with rises in earnings and there is a strong correlation between a child living in a workless household and a child living in poverty. The Government will meet neither its employment aspiration nor its target to end child poverty by 2020 if it continues on current form.

Now is the perfect moment for a new approach to welfare. Sixty-five years after the publication of the Beveridge report it is time to retire old solutions (with enormous thanks and respect) and to tackle afresh the types of questions Beveridge was addressing: what do we want from the welfare system as a whole and how can we construct a system that is feasible, workable and affordable?