The conventional Tory response is that the system is plagued by scroungers and fraudsters. If the DSS targets benefits more accurately at those who really need them, its budget will finally be brought under control – hence the huge swing towards means- tested benefits, over which Mr Lilley has presided.Of course, the more Mr Lilley means-tests, the more fraudulent claims his department processes (to the tune of pounds 1.4bn a year). But the Secretary of State has an answer to that, too – clamp down on the fraudsters, by using bar codes and smart cards. Even “New Labour” seems to accept the logic of this – witness Frank Dobson’s enthusiasm for “fraudwatch”, a telephone hotline for people who wish to inform on their fraudulent neighbours.Yet the reality is that the welfare malaise has causes far more profound than unemployment or fraud. In part, of course, it is an inevitable consequence of rising life expectancy. Take, for example, the growing number of elderly people in nursing homes.

The fact that they receive no assistance until they are down to their last pounds 8,000 is the object of much Tory opprobrium. But raising the threshold will merely push up an already soaring bill.The ageing of the population is only part of the problem, however. The real key is the fundamental internal contradiction of our modern, post- liberal democracy, which demands simultaneously more spending but less taxation. I say “post-liberal” because there was nothing wrong with the original conception of the welfare state devised by Liberals like Beveridge.

The post-1945 system represented a laudable attempt to reduce the inequalities that had existed before the war – or to preserve the equality created by the war – by constructing a basic safety net of old age pensions, health care and education, financed at least partly out of a national system of insurance contributions and progressive taxation.The problem is that the nature of democratic politics militates against keeping welfare at that basic level. The pressure on politicians seeking election to offer new forms of “hand-out” is too great. As the perks, privileges and anomalies multiply, the safety net begins to mutate. From being a net, it becomes a rather comfortable mattress on to which more and more people are tempted to flop. And finally, when the number of floppers exceeds a certain proportion of the tax-paying population, it mutates again – into a sticky quagmire of disincentives from which none can escape.In political economy, this proportion is the equivalent of critical mass: it is the point at which the number of benefit recipients grows so large that it becomes politically impossible to reduce spending. And if individuals as diverse as Viscount Cranbourne and children of Linford Christie are in receipt of some kind of state subsidy (albeit from English Nature in the Viscount’s case), we are surely close to that point.

Lord Acton famously said that power corrupts, and absolute power corrupts absolutely. But where power is shared democratically, it corrupts democratically, with innumerable scams for rich and poor alike.The simplistic right-wing answer to the problem is, of course, to appeal to the interests of taxpayers by offering them, John Redwood-style, tax cuts. The theory behind this is that tax cuts will either boost economic activity and so increase overall revenue, or they will force voters to accept cuts in public spending.In practice, however, a third possibility is more likely – tax cuts merely increase public borrowing, leading to higher levels of public debt and therefore higher interest payments, which have to be funded out of taxation. The only way this problem was avoided in the Eighties was by concealing public sector deficits behind privatisation receipts.