Welfarism - could it be a cause of poverty, rather than the cure?

I'M UP for moral missions. And surely there can be no higher moral mission than the elimination of child poverty. That, at any rate, was the "moral imperative" behind this week's Budget from Alistair Darling.

But there is another moral mission, and one at least as imperative. That is to bring an end to the culture of welfarism that has wreaked havoc across large swathes of the population and encouraged a state of dependence penury.

In many areas a triple poverty of resource, spirit and aspiration is now spreading from one generation to another. It has smashed through personal responsibility, broken the link between the life choices that we make and their consequences, and is costing us billions in the farcical assertion that we are creating a fairer and better society. We are not. In large areas of our inner cities we have real and serious housing and welfare problems, with lone-parent families totally dependent on welfare as the fathers have disappeared. But, like the emperor's new clothes, we dare not speak, but instead cheer this nakedness of result as a tapestry of fine social achievement.

I abhor child poverty. Every reasonable person abhors it. But we have been raising taxes and blasting money at this goal for years – with little result. Of course, child credit should be paid to poor families. But raising taxes piles on the poverty.

On Wednesday, the Chancellor announced welfare reforms which he said would lift up to 250,000 children "out of poverty" and maintain progress towards the goal of halving child poverty by 2010 – funded in part by excise duty hikes.

So an extra 900 million annually will be spent on child benefit and child tax-credit. But experts have warned that the government is now drifting off track for the 2010 target of getting 1.7 million out of poverty.

Now there's a question-begging figure. One has to ask why we have an economy and a tax system so structured as to produce such an appalling outcome. And we need also to ask what we are doing with an annual welfare bill set to hit 146 billion next year.

This is what we will be providing in social security benefits. And we can hardly accuse the government of lack of generosity in this area. Back in 2000-1 the bill for social security payments was just under 100 billion. Thus, over a period in which, according to Alistair Darling and Gordon Brown, we enjoyed the longest sustained period of economic growth in living memory, the social security bill still rose by almost 50 per cent.

Moreover, according to this year's Budget Red Book, the figure of 146 billion does not include 46.9 billion credited to "Children, Schools and Families". This is up from 42 billion in 2006-7 and on its way to 51.9 billion by 2010-11.

These sums rise remorselessly every year, regardless of the prosperity of the economy or the rate of GDP growth. Indeed, they reinforce the impression that we are caught in a helpless, self-defeating chase after an electric hare: no matter how much we spend, welfare needs will always increase by more.

Nowhere is the sense of an electric hare bounding ahead of us more evident than in the field of child poverty. Despite continuing efforts by the government since 1997, the Joseph Rowntree Foundation, in partnership with the Institute for Fiscal Studies, found that, in order to meet the 2010 target, more redistribution would be needed. A revised IFS projection ahead of the Budget argued that at least 3.8 billion more would be required to meet the 2010 target.

The reason the figures are so daunting is because of the definition of "poverty" used. Poverty rates are defined as the number below 60 per cent of median household income after housing costs. Median income is the income of the family in the middle of the income distribution. Thus, no matter that there may be a general increase in prosperity and incomes, there will still be households defined as being in poverty. This is an unwinnable battle unless incomes are radically redistributed. But piling more tax on work will destroy the incentive to get off benefits.

And real, not relative, poverty does exist. This week I watched Abi Morgan's feature film White Girl, the third offering in BBC2's White season. It was a story of an 11-year-old white girl in an Asian dominated area of Bradford who converts to Islam. Debbie, her mother, was caught in a life of absolute desperation: trapped in poverty, illiteracy and alcoholism. Her oafish violent husband seemed no better off, selling the children's bike to fund a drug habit.

This was a numbingly depressing depiction of British life: not a poverty of the purse alone, but a cultural bankruptcy, a collapse of pride, responsibility and spirit. Critics have attacked the series for its portrayal of a broken and defeated working class, whose problems have not been caused by immigration, but by globalisation and economic change.

That is true, of course. But it misses the point of how large swathes of British society have been allowed to fall into such a state. Might it be because we have one of the greatest welfare dispensaries in the world, not despite it? We have a dysfunctional tax and benefits system that has encouraged joblessness at the expense of (overtaxed) work. And it is rampant welfarism that has allowed real poverty to spread. That is why rolling it back is surely the great moral mission today.