Lord Prescott represents the Old Labour wreckers, who always resented these private companies. Theirs was the lazy, less politically risky system of mass pauperism, of posting welfare cheques to edge-of-town housing estates while not asking many questions about the lives of the people inside them. This may have been excusable a generation ago, when a growing economy did tend to reduce the number of unemployed. But nowadays, when any growth simply sucks in more workers from overseas, unemployment is permanent. Tackling it is the toughest task in politics. Fraser Nelson on Labour's greatest moral failure - welfare dependency.