With even some on the left calling for an end to winter fuel payments and the like, it is time to go back to first principles
Last week, I ended a day in Newcastle with a meeting called to discuss the looming revolution in the benefits system. The atmosphere reflected a mix of anger and ashen-faced panic: with the cuts to benefits that will arrive in April and the arrival of universal credit in the autumn, the city council reckons around £83m a year will be sucked out of the local economy. Newcastle is facing a social crisis on an unprecedented scale: there, as in plenty of other places, food banks, rent arrears and family breakdown are soon going to grow to unimaginable proportions.
In response to such cruelties, a cacophony of voices gets louder by the week, largely in accord with a lot of what you hear from the government, but often traceable to people on the left. The argument is simple enough: that in such straitened times, the brief age of the universal welfare state must be brought to a close. Increasingly, to be anything other than poor but still in receipt of some help from the benefits system is a moral matter as much as it is a political one, and something modern opinion apparently cannot tolerate.
The argument about the end of universal child benefit was eventually reduced to moronic noises about a few people trousering the money for Tuscan holidays. Columnists and politicians are calling time on such catch-all post-retirement benefits as the winter fuel allowance, free bus travel and the paid-for TV licence. In Scotland, Labour leader Johann Lamont has commenced a party review of universal benefits, and declared war on what she calls a “something for nothing” culture – yes, that one again – supposedly embodied in the SNP government’s attachment to such totems as free prescriptions and state-funded tuition fees. [In response, the Jimmy Reid Foundation has just published an excellent paper titled The Case For Universalism, and last week saw the latest face-off between the SNP and Labour, over the latter’s role in a cancelled debate about the same issue.
Meanwhile, some questions scream for an answer. Funny, isn’t it, how the Westminster government claims that help has to only be targeted at those most in need, while not only savagely cutting benefits for exactly those people, but sending out poisonous campaigning materials aimed at stirring up resentment among the more affluent, so they can cut even more? “The average working person pays a total of £3,100 per year to pay for benefits,” runs an online Tory document released a couple of weeks back, doing exactly what the universal principle was designed to avoid: cynically playing one part of the population against the other, and making out that “welfare” is something that happens to other people.
Funny, too, that such high-ups as George Osborne bemoans “taxing people on low incomes to pay for the child benefit of those earning so much more” when, as he must know, a progressive taxation system ensures that this has never actually happened. Strange, also, that so much noise is being made about the supposed iniquity of millionaires getting relatively trifling universal benefits when the government has just given them such a big tax cut.
This is the poisonous context in which the conversation about universalism is happening, and people on the left – nominally or otherwise – ought to be very careful indeed.
Last week, the Independent ran a piece by a former Labour staffer named Rob Marchant, who claimed that arguing for universal benefits “means you end up having government cash doled out to people who don’t need it”. In the most reductive sense, that’s true – but as even he must know, the argument is way more nuanced than that. This was a point subsequently made by a piece that appeared on the website run by Progress, written by Stephen Bush: “The age-old question, ‘How can Labour possibly defend benefits for the rich?’ has a crude answer: ‘How on earth does Labour think it will defend benefits for the poor if it doesn’t?'” Quite so: even if the “stay-at-home” mum denied her child benefit because her partner earns £61,000 a year lives in a different reality from the single parent fearfully chopping down their food budget, they are part of the same story.
Once again, we have to wearily go back to first principles. As the child benefit fiasco proves, means-testing and selectivity cost huge amounts of money and governmental effort. In stigmatising help and demanding engagement with a labyrinthine machine, selective benefits often fail to reach the people they are meant for (which is why over 25% of kids entitled to free school meals don’t get them, and the means-testing of winter fuel payment would be dangerous).
To use the language of the right, selective benefits also punish success. And yes: if nearly all pay in, most of us ought to get something out, and not just in the context of disability, unemployment, or old age. The idea that you can hack back the welfare state and everyone will altruistically pay to help only the poorest is an idiotic fantasy. History shows us what really happens: increasingly, even the most basic programmes come to depend on the rattle of tins.
Now, if anyone tells you that universalism can’t be afforded, think on this. The winter fuel payment costs an annual £2.2bn; free travel about £1bn; TV licences £600m. The child benefit cut will save £2bn a year. But the annual housing benefit bill, so much of which is a sticking-plaster for a private-rented sector that has spiralled out of control, stands at £22.4bn. Meanwhile, the cost of tax credits, which includes a vast de facto subsidy to poverty pay, runs to just under £30bn. These things denote the deep, structural issues that need to be addressed before any debate about universalism starts.
And yes, standard-issue points about the billions denied to the treasury by crafty individuals and corporations may be cliched, but only because they’re true. Why we are debating universalism when every month brings more news of vast tax avoidance and evasion is a question that goes to the heart of this bizarre situation.
We all know the reason: a project stretching back three decades, which has long had the universal welfare state in its cross hairs. “What I cannot stomach at any price is the argument … that the point of universal benefits is to knit society together,” said the increasingly unfunny Boris Johnson recently.
There’s your enemy: whatever you do, don’t help him.