Iain Duncan Smith is the unsung hero of the jobs recovery Last week began so well for the Conservatives, with oodles of good news about the economy. Even better, some of it was the kind of news that actually affects people's lives. By Thursday, we were all talking about the jobs recovery: unemployment was down and the number of people in jobs was up. There is an important difference between those two things, to which I will return. And then the Tories decided to invade Labour's favourite territory - the "cost of living crisis" - and opened up what the BBC called, with characteristic freshness and originality, a "war of words between politicians." So, whether wages were rising faster than inflation became the question of the day, and it was not at all clear that the Conservatives had the winning answer. Whose bright idea was that? Maybe having such a good story to tell about employment just produced an explosion of hubris which Labour (helped by innumerable broadcasting vox pops) quickly exploited as typical Tory out-of-touch-with-ordinary-people smugness. So let's try to forget that, shall we? Let's go back to the real government success that they might profitably have dwelt on for far longer. Not only have the numbers of registered unemployed fallen dramatically, but the number in proper full-time employment has increased. That means those people who are no longer unemployed are not just dropping off the list in despair (as appears to be the case in the United States) or disappearing into the black economy, but are actually becoming engaged in legal, productive work. Furthermore, a great proportion of those newly employed are British, not foreign. Imagine that. The truth is, of course, that George Osborne and his economic austerity are only partly responsible for this small miracle. In reality, it is as much Iain Duncan Smith's welfare reforms that are pushing British people off welfare and into work - just as they were designed to do. This is not only due to the specific reforms themselves, but to the change in the culture that they have fostered. It has now become possible to express disapproval of benefit dependency without being lynched, and to voice in public what has been unsayable for a generation: it is not morally acceptable or socially benevolent to have people stuck on welfare for life. To put it like that points up the important difference between the way that Mr Duncan Smith, the Work and Pensions Secretary, has presented this programme, and the way it has been marketed by the "tactical political genius" of the Conservative Party, Mr Osborne. IDS sees his welfare plan, as he made clear in a landmark speech last week, as being in the tradition of great Tory social reformers like Shaftesbury, who devoted themselves to improving the conditions of the poor. He is not necessarily in the business of saving money, but of saving lives: of rescuing people from hopelessness and dependency, and allowing self-determination and real life choices to become a reality for as many as possible. He understands the public resentment of those who do not work for a living, but he does not want to enflame it. Mr Osborne, on the other hand, sees a vote-winner. The anger and hostility that the working population feels towards those who are apparently happy to be supported by the rest of us is an untapped electoral resource which has now been legitimised by economic crisis. So the Chancellor talks about "shirkers vs workers," while the Work and Pensions Secretary talks about reconstructing lives that would otherwise be wasted. Question for discussion: which one of these men is the "nasty Tory" and which the true moderniser? But apart from the internal party difficulties, is there a larger problem for the IDS transformational strategy? It is not just Britain that has a problem with structural welfare dependency. Indeed, the term "underclass" was coined in the United States, where social analysts such as Charles Murray described what appeared to be a quite new phenomenon in the history of democratic, free-market societies. There was now an established tier of the population which was not simply poor in the traditional sense - either because of long-term unemployment or low pay - but was permanently workless and surviving only on state benefits. These were not, strictly speaking, the "working class" poor, because they had, for the most part, never worked - and didn't ever expect to. Their lifestyles were supported, and circumscribed, by a comprehensive benefit support system which had not existed in America before the Seventies, and they tended to pass their expectations of non-working life down to their children. The debate about the problems related to the rise of the American underclass eventually produced quite dramatic welfare reform. In 1996, pressed hard by a Republican Congress led by Newt Gingrich, Bill Clinton signed into law the wonderfully named Personal Responsibility and Work Opportunity Act, which was designed to put an end to lifetime benefit dependency. Among other things, it required recipients to begin working after two years of receiving benefits, and it placed a lifetime limit of five years on benefits paid by federal government. In addition, it encouraged individual states to experiment with their own welfare reform systems. Some of them created pioneering "workfare" projects, in which welfare claimants were required to do public service of some kind - park clearance or graffiti removal - to earn their state support. Many of these measures were startlingly successful, at least for a time. The Clinton federal reform helped to create an economic boom by dramatically increasing the number of people pulled into the productive workforce. That boom generated so much tax revenue that it produced a government surplus - which allowed George W Bush to run for the presidency on the tax-cutting slogan: "You've been overcharged. You deserve a refund. The crash of 2008 put an end to all that - but not to the principle that it established. Economies, as well as societies, are more robust and more edifying if they do not permit a pool of disaffection and despair to sit undisturbed at the bottom. But, that said, there may be something irremediable in this. The point of a meritocratic society is to pull as many people out of its lower reaches as possible: in theory, anyone with talent and motivation should be able to rise out of poverty and disadvantage. If this process is successful, then fewer and fewer people of talent and resourcefulness will be left at the bottom. Those who remain there may well be unemployable, especially when no-skill and low-skill jobs disappear. Perhaps the most that the Government can hope for is to make the problem less intractable by seeing to it that nobody is among their number who does not absolutely have to be.