Don’t cut universal services for the old
Let me declare an interest. I am old enough to get the £200 tax-free winter fuel payment and free local bus travel anywhere in England. As I live in London my travel Freedom Pass extends to local bus and tube travel throughout London 24/7, and local trains from 0930. I guess the whole package is worth £700 a year to me, tax-free. Though in truth if I paid for London travel I would claim back much of it from clients and customers. So that’s that out of the way.
Well almost. I do not in the slightest need that money. If it disappeared tomorrow I would shrug and say “So be it”. It would not leave me freezing in the winter and cut off from family, friends or the local library. Or, come to that, work. So: I get it; I do not need it; and the amount is small enough in my personal financial affairs that whether I get it or not is neither here nor there.
So that leaves me uniquely able to say unequivocally that it would be complicated, counterproductive, and wrong to stop winter fuel payment and free bus travel for those over state pension age. Here’s why.
First, complicated. Who would you take it away from? Everyone who admitted they didn’t need it? Everyone called Paul? Everyone who paid higher rate tax? That would be possible but it would create a cliff edge at an income of £42,475 – earn an extra £1 and lose £200. And it would not save much. The Government estimates that ending it for households with an income above £35,000 would save just 13.5% out of the total cost. The administrative cost could be £25 million a year or more – the amount estimated for administering the child benefit tax charge which begins on 7 January.
You would save more by following what one tweeter suggested to me recently – go down the income scale and only give these benefits to those poor enough to pay no income tax. Then the cliff edge would move down to £10,500 for over 65s (slightly more for over 75s and rather less for 61 to 74s. I know it’s complicated but I didn’t invent the system). That would save more but would certainly take it away from many who needed it.
Another problem is that these are individual entitlements so the non-taxpaying husband, wife, or civil partner of a higher rate taxpayer would continue to get it. The only way round that is to impose a joint means-test such as that about to be imposed on child benefit recipients – and which the theoretical savings above are based on.
Now, I know your next argument. It is one I have made myself. Surely, you are thinking, surely all that Oxbridge brain power in the civil service can come up with SOME scheme to rid me of these turbulent pensioners? Well, just look at the problems of the Child Benefit Tax Charge – yet to be realised.
So that is the ‘complicated’ bit.
Now ‘counterproductive’. The thing about these universal benefits – ones that you get on grounds of age or condition – is that they go to everyone. Those who need them do not have to declare their poverty to get them. If they do have to take that step then many simply do not claim. More than two million older people fail to claim up to £5 billion in means-tested benefits they could get if they applied.
Paying them to me is the price we pay as a society so that my neighbour Marjorie, too proud to claim means-tested benefits though she needed them, at least got her winter fuel payment and free bus travel – though she could use that very little in her last years. If you means-test free bus travel and winter fuel payment then poverty among pensioners would grow as many failed to claim what they could get.
And finally ‘wrong’. In a way this is an extension of counterproductive. Many countries call the government departments that run social security or health the Ministry of Solidarity. Because state benefits represent solidarity. Between the sick and the well. Between the jobless and those in work. And, of course, between young and old. There are times and circumstances in life when the state should step in and transfer money from one group to another. Just as the childless pay for schools, the-law abiding pay for the police force and the courts, and those without solar panels on their roof pay for those who do.
In summary, taking winter fuel payment and free bus travel away from richer older people would save relatively little, cost a lot in administration, increase poverty among the old, and undermine solidarity between the generations.
.
Paul Lewis is an independent financial expert who presents BBC Radio 4’s Money Box every Saturday and regularly appears on BBC radio and TV news and current affairs shows. The original version of this post appeared on the Paul Lewis Money blog.
Good piece, though not saying anything particularly new, articulated the narrative very well.
Cutting universal benefits isn’t a good idea if you want to live in a civilized society.
Whoda thunk it Johan?
Solidarity. I kinda like that concept.
Ministry of Solidarity. Solidarity Payments. Social Solidarity. Yes, definitely works.
About the problem of wealthy people getting benefits that they don’t need, why not have a simple voluntary declaration that an individual could make to say that they don’t require any state benefits? A simple one character Y/N field on that person’s national insurance file which a wealthy person could switch off with a simple phone call. Appeal to their sense of social solidarity without complicated and unfair rules, and ‘cliff edges’.
I’m sure most rich and/or right-wing people would gladly forego their payments, saving taxpayers money, whilst allowing the provision to continue for the rest of us.
As discussed on wings before, I like the idea of those who can afford such services and have a moral conscience about it, being able to offer what they decide they can afford to the relevant authorities. No admin, no interviews, no fuss.
I would however say, I bet you’ve paid a shedload of tax in your life mate more than enough to pay for such “free” services many times over.
“I guess the whole package is worth £700 a year to me, tax-free. “
A benefit like this may well be worth £700 in savings to the person concerned, since they no longer need to put their hand in their pocket – but it doesn’t necessarily cost the state that. My mum and dad make great use of their free public transport – they smile, wave their card and take a spare seat – but I don’t think the bus/train company invoices anyone for that trip. I’m not sure exactly how it works – I presume a deal was struck between our government and transport operators for the benefit of our elderly. Makes good sense and i think it’s a great thing, but remember that the benefit to those using the system is of far greater value than the cost to either the operator or the state in delivering it.
I agree, it is an important moral, practical and political point to make. Opposing universal benefits serves only to divide the classes against each other, increase beurocratic complexity and create perverse incentives and “poverty traps” in unexpected places.
My only question is why this stops at bus passes. If prescriptions should be universal, if library membership should be universal, if bus passes should be universal, then why should the basic cost of living (i.e. “income support” be means-tested?
And of course there is no compulsion on the wealthy and entitled accepting the benefit, or using it. Bus passes need not be claimed; winter fuel can be given to the more needy in the family or community. The cost of means testing is prohibitive.
The child benefit tax charge is a disaster in the making. Since married women ceased being their husbands chattels, at least for tax purposes, over 20 years ago, our friends at HMRC do not have the records to link spouses, to determine who has the higher income. And as for unmarried couples…..
So where a benefit is needed prudence dictates that universality is usually the route to follow. Prudence, didn’t one of Johann’s former bosses have a connection…..
Being of an age at which I receive a state pension, winter fuel payment and qualify for, but don’t have, a bus pass (wee Wendy must hate me) I can but agree with our contributor and thank him for the article. I also have an army pension so am slightly better off than some of my peers.
IMHO universal benefits are by far the fairest way for the state to distribute it’s largesse as the population as a whole have, and continue to, contribute(d) to the system at the appropriate level throughout their working lives. It matters notI whether the recipient actually requires the benefit to ensure their survival all have contributed and all should benefit.
Should a recipient feel they cannot in all conscience accept the payment then there are plenty of charities which would put it to good use, not least in these days of austerity the food banks which are springing up in every town, but please spare my the loud declarations by way of the MSM about how you wish the government would means test it just because you don’t need it.
Accept it, you paid for it, put it in an envelope and pass it on to someone who can make use of it.
Heraldnomore, just on the bus pass issue, its very good thing for the environment if people who can afford cars and taxi’s choose instead to use public transport, in terms of both Oil consumption and emissions. Get yerself a pass! ;o)
Universal benefits, you do not need to declare your poverty to recieve them, never a truer word was said, with universal benefits there is no stigma attached to recieving them, its the same for everyone.
How can you beat that for a fair and just social community.
Vote Yes, to keep your universal benefits, and make them a Scottish right of life.
Alba Gu snooker loopy!
I like the term “universal services”, it strikes me as being a lot less pejorative than ‘universal benefits’. We should also remember that it is not just the “old” (I speak as one who is getting older by the minute!) who should have access to “universal services”, our sick need medication, our poor support and our youngsters an education. I think that we can be rather proud of ourselves here in too wee, too poor and too stupid Scotland, that we, although relying on handouts from Westminster to our ‘wee pretendy parliament’, can still put our elderly, our sick and our young at the top of our priority list. Just think what we will do when we reap our own harvest and ring our own till!
Sorry my last post was for Boorach
I fear Paul Lewis has blown his cover here – he’s a rabid socialist, obviously, and the BBC will have to deal with him pronto. Few years back there was a BBC 24 item about the Eurovision Song Contest, running through the runners and riders. Israel was mentioned, perhaps because they’d had won it the year previously or suchlike. Then they went to so-and-so for a weather update: ‘Since when was Israel a part of Europe?!’ he quipped cheerily. That was the first and last time I ever saw the dude.
I like the “Ministry of Solidarity” idea, talking of which, can we follow Iceland and have a “Ministry of Ideas” too?
One aspect of free bus travel which Paul doesn’t note above (I may have missed it) is the redistributive economic effect.
Pensioners who can travel for free go on more trips, and spend their disposable income more. And of course, they have more disposable income due to not having to pay a bus fare.
There are studies showing the health benefits, but are there any showing the economic impact?
@ pmcrek
Have no need for bus pass, seldom go further than high st and that’s but a short walk. Also I live in my van and one is required to have a fixed abode to qualify for bus pass.
Odd, I can be on electoral roll and not qualify for bus pas! 🙂
‘Odd, I can be on electoral roll and not qualify for bus pass!’
A van isn’t an address.
Run that past us again.
Notdifficult. I live in a van. Highland council won’t issue bus pass to anyone without fixed abode (address). For purposes of electoral roll all I have to do is state where I usually park overnight.
@Boorach –
(I’m starting to hope I’m asleep and dreaming all of this)
You live in a van? Is that where you are writing from?
Hy Boorach,
Your not Robbie the Pict are you?
@ianbrotherhood
Surely is, wondrous things these iPads (spell checker excepted) unfortunately Vodafone sans 3G is painfully slow. Pages take an eternity to load.
The van part is entirely by choice.
@ Albaman
‘fraid not….. Not nearly that famous/infamous.Just your average nonentity
Heads up!
Today I came across an interesting and thought provoking well written article by Hazel Lewry entitled Is the Treaty of Union Already Dead? Well worthy of a read.
link to weegiewarbler.blogspot.co.uk
@Boorach –
Sounds liberating. So, I guess you’re the main man when we get the pirate radio station up and running!?
Eureka!!.
@ ianbrotherhood
I’m up for anything for my country! As far aspirate radio goes 25 years in royal signals won’t hurt I suppose
quite a coup getting Paul Lewis to write a piece on here! – ach just saw it was a cut & paste. Ah well. I like him and its nice to read it here.
@Boorach –
We’d best knock this topic on the head – next thing you know there’ll be Predator drones hunting us down…where did I put that tinfoil onesie…
Boorach,
Pray tell us your van is one of the camper variety, rather than one you got cheap with a missing wheel from someone calling himself Del!
5 Billion in pensioners benefits unclaimed – there are also many other budgets that are unclaimed bringing the total to 20% of the entire welfare budget. That fact alone blows a hole in Scottish Labours arguments.
whatever it is Labour are planning – it has nothing to do with saving money. Again it comes to the fact that they are so desperate, that they are prepared to chase tory votes. and the only way to get them, is to be tory. The thing that makes me so angry is that they are so swivel eyed and dispicable, that they will then be stupid enough to blame it on the tories if they actually won. They have been living on that hatred of the tories for so long, they need to keep Scotland angry and poor. But to go to these lengths so you can beat the SNP….honestly I am ashamed to have been a labour voter in the past. Keir Hardie and Bevin must be spinning in their graves.
link to dailybail.com
@ianbrotherhood
Funny, there was mention of drones this week, (on radio or tv, can’t remember), and my immediate thought was oh aye here we go, the msm assisting the war mongers to introduce the necessity in modern times for said drones.
And wallah today in the times, Paddy Ashdown, (LIBERAL!!!) writes an op-ed putting the argument for them.
Mental or what !! 🙁
Murder by X-Box addicts, and Obama has the nerve to crack jokes about them. He is more Bush than Bush and the only reason he hasn’t been hauled over the coals by the MSM, is ’cause he’s black. That and the fact that the military industrial complex owns the MSM. You couldn’t make it up. 🙁
I got on a bus the other day and there was an old fella ahead of me, about 85. He put his card on the ticket machine, got a ticket and walked on the bus. I felt proud that my country was providing this free service for our elderly citizens.
@Baheid-
Ashdown? Seriously? When, oh when, is that ball-less scrotum ever going to just STFU?
It’s a sign of the times that we’ve all seen the footage of what these things actually do, and it’s often broadcast pre-watershed. MSM seem content enough to keep playing this obscene prima facie evidence of war crimes, while assuring us that the pixels being blown to pieces are ‘suspected’ of this, that or whatever else. It’s down to us to keep reminding each other that what we, and our children, are routinely witnessing, is the extra-judicial execution of other people and their children, the vast majority of whom are guilty of nothing. An ongoing, escalating atrocity exhibition has been normalised. If someone says ‘fuck’ or ‘cunt’ or exposes their genitals on daytime television, the channel responsible braces itself for an onslaught from Daily Mail readers. But we can be shown footage of entire families being slaughtered, and the fact that their deaths resemble a scene from a computer ‘game’ somehow makes it acceptable?
How sick do we have to get before we do something about this?
The victims are far away, speak a funny language and are not generally white. What other reasons do you need? The continual repetition is just another way of installing fear and a general feeling of helplessness within the general public. It is all part of a model that has been worked out with mathematical precision. I hope in the sake of all that is good, that we vote Yes and get a written constitution. If people are so transfixed not to dare and leave NATO, then I would hope our constitution would prevent us from aiding and abetting such heinous crimes.
Vote Yes in 2014.
ianbrotherhood,
Are you a fan of J G Ballard? Your use of the phrase atrocity exhibition rang bells for me:
link to www2.iath.virginia.edu
Cameron B,
don’t know if it came to anything, but there was talk of using drones to find the cop killer in the USA. Just saying: who would object to that. And, later, the damned things are like flies over our cities.
Don’t entirely agree with this. I’m fortunate enough to earn an amount that I pay 40% tax on my top earnings, however it’s not just about making the most able pay. Often the cost of means testing / selective benefit costs more than the benefit, so no point. Many eastern European countries adopt a flat tax rate. Combine this with a high threshold and you have fairness and a simple collection regime which can save a government mucho dosho.
@ douglas clark
Yeah, apparently they are being used in a number of US states, though with less devastation than in Pakistan. One of several undeclared wars the US is conducting. Not sure if they are being used here. Won’t be long though.
DJ,
One of the ‘interesting’ things about the society we live in is that the very rich can pay less tax than you.
The denizens of Moscow on the Thames have a ‘domicile’ arrangement, if this rather lengthy, but somewhat interesting, article is to be believed:
link to guardian.co.uk
This is also to miss the Starbucks phenomena, where profits are taxed in more favourable régimes.
I am all in favour of an equitable arrangement of taxation and solidarity payments.
We are nowhere near it.
@ douglas clark
I posted a link to another Gruniard article today, on the Behind the Curtain thread. All about Prince Charles’s tax arrangements. You are spot on. We will never have a society where opportunities are available to all, until the super rich start paying their fair share of tax.
Can’t remember the figures now, but there in the regions of approx 1,000 drones operating at the moment and an estimated 30/40 thousand will be within the next 5 years over the blue sky’s of the U.S.
The only drones l want/like to see, are the ones that are attached to the bagpipes.:)
@Douglas Clark –
I’ve never read Atrocity Exhibition. Must get a hold of it. That link was intriguing – thanks. I first knew that title as a Joy Division song, can’t even remember the tune now. (Youtube, here we go, again…)
CameronB,
I did read your post, but I didn’t follow the link, sorry.
This entire strategy, of giving tax breaks to the super rich, seems to me to be a huge misunderstanding by successive Westminster governments about why we vote for a government at all.
It is not the DJ’s of this world that I have a problem with. If he earned his income, then good luck to him.
It is becoming enamoured, as Peter Mandelson apparently is, with the the super-rich.
We expect some degree of even handedness between them and us. And we don’t get it.
Our representatives enthralled at meeting and greeting billionaires. And telling poor folk that we ought to re-introduce the worst excesses of Victorianism? If only there were dirty chimneys to sweep,
Well, what other explanation is there for attacking the poor and giving tax breaks to the rich?
It is entirely feudal.
Oh! Edited to add, and wrong.
One of the worries for many, I would have thought, about means testing is where it stops.
After all, why stop at giving free bus passes or winter fuel payments only to those who are poor, at whatever level you decide that to be. Why should those with private or company pensions above a certain level be paid a state pension, which is, after all, a social security “benefit”.
Why should rich people have free eye tests; subsidised dentistry; free board and lodgings in hospital; free flu injections; and more?
Why, if re-introducing the prescription charge, should it be retained at the English level of £7,65? Why should there be that much subsidy for people who can easily pay? Most medication costs a deal more than £7,65. Why, we might ask Ms Lamont, does she, on her generous salary, not pay £50 per item towards her drugs… and why does a minister not pay £100 per item, or the actual cost?
If university education has to be paid for, because we cannot afford it, why don’t the rich pay for the last two years of secondary education which is not compulsory?
And once we take the baby steps of putting everything back to the English level of subsidy, how long will it be before we start taking these steps to raise more money from health, education and the old.
@ douglas clark
If there is no incentive, there is no potential for innovation. That was the principle reason Wall Street backed the Bolsheviks and then Stalin. They created a static society and captive market.
IMO, there has be very little progress since the days of feudalism. We might not be adscripti any longer (bound to the soil), but perhaps that was why home ownership was pushed so vigorously by Thatcher. I think it would be fair to say though, that we are still servus et colonus (worker and slave). Especially in China, where Apple factories and the like, have catch-nets to prevent worker suicides. Oh what a lovely world we live in.
CameronB,
Indeed. It is not all a bed of roses. However, just to cheer you up a bit, this is interesting:
link to ted.com
You don’t get that level of optimism very often!
Tris says: etc. etc.
Had a few Glenfiddich but excellent stuff, (but will have to read again later).
Power to your drone pipe 🙂
@ douglas clark
I’m not sure if that did cheer me up. I specialised in “third world development” when I was a student, and was planning on working on self build projects in Pakistan of all places. Although I agreed with a lot of the speaker’s presentation, the Ted lectures are not flavour free. Women’s education and health care are essential factors if economic development is to be encouraged. So is family planning, though I do have my doubts about the Bill & Melinda Gates Foundation.
Perhaps I am reading too much into Bill’s history, but his father, William H. Gates, Sr. was formerly the head of Planned Parenthood. In case you are not already aware of this organisation, it was established by Margret Sanger, who was a rabid racist and avid supporter of eugenics. Indeed, she was a member of both the American Eugenics Society and the English Eugenics Society (now the Galton Institute). She was even quoted as saying “Colored people are like human weeds and are to be exterminated.” Ted Turner also has a colourful history with regards to population control. He is also a good buddy of David Rockefeller, who’s father funded the global eugenics program, including the Kaiser Wilhelm Institute for Anthropology, which employed Joseph Mengele before the war.
How did you guess I needed cheering up?
@ dougla clark
When it comes to optimism, I am afraid I am with Voltaire. In fact, Candide is one of my favorites reads. I do not mean to be unkind, but I think it is the prerogative of children. As far as I can see, there is no rational reason to expect the best. One can hope though.
Vote Yes in 2014.
@ Indion
Apologies, I’m an early bedder but have no fear whilst it may not be the latest model it is fully functional and fairly well maintained. Definitely not the a camper but a project…..!
The UK government is certainly putting out mixed messages regarding tax avoidance. Although it looks like there is the beginnings of a crackdown here on the mainland, I have not found any mention of the same regarding British tax havens located in various British protectorates and Crown Dependencies, such as Jersey, Guernsey, the Isle of Man and the Caymans.
link to guardian.co.uk
link to publications.parliament.uk
Boorach
Thanks for relieving our concerns. I’ve got something similar on the go with a saltire coloured 4×4 to wrap up this spring and head home to join in with. Its wonderful to be part of the solution rather than be stuck with the problem. Good luck at your end.
CameronB,
When you start looking into the antecedents of some very well respected British educational, scientific and health institutes from the Victorian period through to pre world war 2 you invariably find the founding personality and principles of these organisations to be rabid eugenicists, imperialist, racist and social engineering fascists. It seems the horrors of the war were used in Britain and the allied countries as a historic decontaminate for our own filthy establishments history. ‘All that unpleasantness happened with those fascists that our brave boys defeated’ never mentioning the previous and ongoing unreformed attitudes essential to the formation and administration of an Empire, who’s profitability depended on subjugation, usually along racial lines and theft of others natural resources on a global scale. To this day that surface ‘decontamination’ is still bought by the general public and the world (that part of it without first hand experience of British fair play, that is), but the institutions of government have never really been reformed and these repugnant ideals essential to an imperialist outlook are still alive and well. The NHS , Comprehensive Education and the welfare state were formed by the unstoppable wave of idealism created by the returning soldiers and the wartime working women of the UK after their inhuman experiences of WW2. This was achieved against the opposition of the above establishment but with the help of some of those also returning from the war but ordained to enter and run the establishment of the future. This is how these great post war achievements were created. The governmental establishment went through no such reform and were able to stay true to their world view, held in check at first by the tide of hope the new welfare state had created. As time has moved on and year after year establishment parties have, through attrition undermined these institutions, the tide of optimism that supported our welfare state has receded and now the old Establishment forces can openly attack and dismantle what only a few years ago would have been electoral suicide for them. My point is that the destruction of the welfare state has always been the goal of the British Political establishment. It’s formation was never meant to happen in the first place. Without governmental reform at the time the institutes were set up their destruction was inevitable. Reform of Britain’s Establishment is IMPOSSIBLE! This is why we MUST vote yes in 2014 and if we do, we MUST reform all institutions of government and law, both native and inherited from Britain before we set up our new socially democratic welfare state institutions. Other wise 30,40,60 years from here, we will be back in the same shit we are in now, after the tide of a once in a 300 year wave of optimism and hope has receded. Sorry this has turned into a bloody essay! Just to say CameronB that after living without it for a while, hope for me is no luxury but essential to getting through each day in this continuing shitty world. Vote YES
@ Braco
There was me thinking that I had taken that too far. 🙂
CameronB,
Your turn next time then! shamedwinky
I believe it’s extremely important that benefits are paid out to everyone in society. I have recently (temporarily?) moved to the USA. One of the common complaints here is that people on higher incomes pay out for health and welfare benefits for poorer people but never get them themselves, “why should I pay for someone who’s too lazy to work?”, “why should I pay for healthcare for someone who abuses the system?”. Never mind the practical details on how one abuses a healthcare system (I’ve asked this many times but no good answer yet – getting the flu more than once a year?) it’s clear that Americans do not feel that they are all in it together. If everybody, unemployed, working at McDonald’s, working in an office or a millionaire, is elegible for free NHS care, free prescriptions, free bus pass and so on, you can’t then use that argument. You have been paying for your own safety net all these years.If you’re lucky enough / have worked hard enough not to need it – you still get it. If we are going to be a society, lets all be in that society.
@ Braco
I wasn’t knocking you, though I will try harder next time. 🙂
P.S. Hope is definitely not a luxury. Without wanting to be overly melodramatic, hope has played a huge part in my being able to live an independent life.
CameronB,
there you go again! Why not BE overly melodramatic (bigsmilyface)
@ Braco
It can be off putting to some, even intimidating. I will try my very, very best though. (biglaughingface)
CameronB,
goin by your avatar then, you seem more at ease visually than the written word (winky) Certainly no criticism of your diatribes intended. (Although everyone IS a critic!)anotherwinky
@ Braco
I was in remedial classes throughout P3 and P4, because my spelling was so atrocious. I didn’t find out I am slightly dyslexic until I was 17. Still no excuse, though spellcheckers don’t help you with problems such as seam and seem. Ach well, so long as people get the gist, that’s what I think. Though I am aware that I can produce confusion and disorder, where none was intended. 😉
Personally, it was quite intimidating making my first post here, because of the writing skills that are often on display.
CameronB,
Away! Are you really reading the rest of us? I don’t even have an avatar (if that’s what they are called) smily
@ Braco
Nah, I’m just making it up as I go along, It has gotten me this far so why change a winning formula? 😉