Eight things I like about universal benefits…

There’s been a lot of discussion about benefits over the last few years – and in particular, how the Labour Party, or any other ‘progressive’ party, should deal with them in times of austerity. With Liam Byrne as Shadow Secretary of State for Work and Pensions it has been hard to differentiate between Labour and the Coalition – it often seems to be a competition to see who can be ‘tougher’ or ‘more rigourous’ in their approach.

One particular way that ‘rigour’ and ‘toughness’ seems to be played out is through the idea of means-testing. For many people it seems to be taken as read that means-testing is  a better way to go about things – that way people who don’t really ‘need’ benefits don’t get them, so you can cut the benefit bill without those who really need it suffering. Over the last couple of days this has been what lies behind the idea that ‘rich’ pensioners shouldn’t get winter fuel allowance, free bus passes and so on. In some ways it seems logical: why should ‘we’ subsidise things for people that can clearly afford them? It’s an idea that has traction with thinkers on the left as well as the right – and for political reasons it’s easy to see why. From the perspective of the right, anything that cuts benefits ‘must’ be a good idea, and from the perspective of the left, it’s seen as an electoral advantage to be ‘tough’, and the people who would lose out through this, ‘rich’ pensioners, aren’t part of the left’s ‘constituency’: they’re all going to vote Tory anyway, so the logic goes.

I don’t really like this logic – though people I very much admire on the left (such as Sunny Hundal) support it. I’m in favour of what may appear to be an old-fashioned approach, but I think is ultimately a more radical one. I’m in favour of more universal benefits – and less means-testing. By that I mean benefits that apply to whole categories of people – all parents should receive child benefit, all people over a certain age Winter Fuel Allowance, and so forth – so that their income or assets, or anything else requiring detailed analysis, vetting or similar do not get taken into account, or need testing.

There are many reasons to favour universal benefits,  both theoretical and practical – though ultimately the latter are more important. Theory is all very well, but the thing about benefits, above all other things, is that what we do for ‘policy’ reasons has a real impact on real people – on some of the most vulnerable people in society.

  1. A universal system is simpler to understand. I know this argument is used for bad things as well as good – the poll tax was simple to understand – but in relation to benefits it matters more than might be immediately obvious. People need to understand what they’re entitled to.
  2. A universal system is easier to administer. The more complex a system, the more people are needed to make it work, and the more those people need to be trained, the more time they need to take and so forth. Again, it’s easy to dismiss this as just ‘procedural’, but anyone who has seen the back office in any part of local government would realise that this makes an enormous difference.
  3. A universal system doesn’t require advanced computer systems. As anyone who has followed the problems with the new (and misnamed) ‘Universal Credit’ system will have seen, the first issue they’ve had to deal with has been technology – the computerised system simply doesn’t work. This, sadly, is far from unusual – quite the opposite. Government computer systems seem to be over-budget, to miss their deadlines and to simply fail to work all too often. The amount of money, time and energy wasted on systems that are supposed to bring about ‘efficiency’ is hard to calculate – but is huge!
  4. A universal system is easier for vulnerable people to negotiate. I worked for a time for a charity dealing with mentally disordered offenders – not people with severe mental health problems, but with multiple diagnoses: some minor mental health problems, some drug problems, some alcohol problems etc. We dealt with the transition between prison and the outside world – and some of the biggest problems we had were helping them to negotiate the complexities of the benefits systems. Filling forms that are complex even for ‘ordinary’ people can be pretty much impossible for more vulnerable, less educated, more stressed and more distressed people.  In some cases the stress of this kind of thing can cause more mental health problems – or make people more likely to drink or to take drugs. They might even cause more crime: if you can’t work your way through a complex system in order to get money that you’re actually entitled to, and you need money, what can you do?
  5. A universal system doesn’t disadvantage the vulnerable. It may seem counter-intuitive, but means testing can often actually disadvantage precisely those people it intends to help. This is closely linked with the previous reason – but qualitatively different. It’s not only true that vulnerable people may be stressed by the bureaucracy around means testing – but that less vulnerable people can take advantage of it. People who are experts at form-filling and good at understanding systems can negotiate them well, and can find loop-holes to take advantage of. They even know when and how to lie more effectively, and how and when we’re likely to get caught… but the people I’m talking about are not the classical ‘benefit scroungers’ of Daily Mail mythology. Quite the opposite – they’re the accountants and lawyers, the educated and advantaged people. As a former Chartered Accountant and current law lecturer I know all too much about this – we accountants are experts at milking systems. Means testing supports exactly the wrong people in this way. Universal systems are far less open to abuse – there’s far less scope for that abuse.
  6. A universal system is less divisive. One of the biggest problems right now – one of the things I like least about the current government’s approach – is the way that society seems to be become more and more divided. The ‘haves’ and the ‘have-nots’ is just one part of it: the ‘scroungers’ vs ‘strivers’ is another, and in many ways far more damaging. Whenever you have a means tested system you are creating or exacerbating   division – people that are entitled to benefits may be looked down on as charity cases, or as ‘scroungers’, while people who are not may be envious of those that are.
  7. A universal system is a real safety net. Lovers of justice are very familiar with the expression that it’s better for 10 guilty people to go free than for one innocent suffer. I’d apply that to benefits: it’s better for 10 people who don’t exactly need a benefit to receive it than for one person who absolutely needs it to be denied it. Currently, the opposite seems to be the case. Levels of benefit fraud are very small.
  8. A universal system sends a much more positive message. Though the practical matters on the ground are much the most important aspect of this, there is also a question of the message that our approach to benefits sends. Are we a society that believes in caring and supporting people – or are we one who believes in blaming and shaming, in dividing and demonising? I know which message I would prefer to send.

Perhaps I’m an old socialist dinosaur to believe such things – but I don’t think so. A simpler, more direct and universal benefits system should appeal not only to those on the left but to those who believe in a ‘smaller’ state – it doesn’t require such huge state machinery, such massive bureaucracy and such complication. It does go against the grain in some ways – we like to believe that being more ‘targeted’ means being more efficient, and we’ve followed that mantra for many years, largely despite the evidence against it that’s all too clear for anyone who’s tried to work their way through the systems. Now, it seems to me, is a time that we can try to think in different ways about these issues. Think more radically. Universal benefits is one of those ways.

11 thoughts on “Eight things I like about universal benefits…

  1. The trouble is that the policy doesn’t exist in isolation. If the benefit is not means testing then what gets cut in its place or which tax gets raised? There is no mainstream political party at the moment actually willing to go on paper for deficit spending so they are all looking for what they can cut.

    If its a choice between everyone over 65 getting around £1000 a year without means testing (TV licence, bus pass and winter fuel) or those surviving on income based JSA getting it raised in line with inflation, which is preferable?

    1. It doesn’t exist in isolation – but that works both ways. It’s not an ‘increase this, cut that’ equation: the amount you ‘waste’ by giving to people who don’t ‘need’ it doesn’t have to be directly recovered by a specific tax. The impact, as outlined above, is more complex and potentially more positive. Money is saved on administration, on time no longer wasted, on fewer health, crime and social problems and so forth. To try to make it a purely mathematical exercise is precisely the problem: the bigger picture needs to be looked at.

  2. Sounds good to me. I’d rather see the majority get what they need and a minority get what they don’t need. And as for where does the money come from? There are billions of pounds worth of unclaimed benefits at the moment.

    1. If you accompany universal benefits with a more progressive tax system you can get the best of both worlds. I don’t ‘begrudge’ richer people their benefits – in the grand scheme of things it doesn’t really matter that much, particularly compared to the positive aspects of universalism.

  3. I think a similar case can be made for the NHS. It is a Universal Benefit and treats everyone free of charge whether they can afford it or not. If you had a system whereby the NHS was only available for those who could not afford private health care, it would be a cinderella service offering a much lower standard of care. Dentistry is a case in point.

  4. Good blog, Paul – have a look at this initiative to get the EC to consider Unconditional Basic Income: http://www.basicincome2013.eu
    The UK bank bailouts, taking only what was given as a straight hand-out (£124billion) as opposed to the guarantees of over a trillion, were worth £2000 for every man, woman and child in the UK. And they’ve proved pretty unconditional, though certainly not universal!

  5. Read Thomas Paines “Agrarian Justice”. It sets out a good moral case for a National Dividend, where a land value tax pays for every adult to have a basic income as compensation for their loss of the right to land. The demographics have changed a lot since the 18th century and so has the idea of property though the core idea of the National Dividend remains a good, clear vision. Google will find it for you.
    Even Milton Friedman, the guru of Reaganomics and Thatcherism, supported the idea of a universal basic income. His proposal was for a tax “prebate” to ensure everyone had enough resources to take part in a dynamic competitive economy. I guess Thatcher played a little with the idea when she introduced Enterprise Allowance Scheme, where you’d get the equivalent of dole money if you provided a business plan and started a business. Just played with it a little, mind, as it was heavily conditional and bureaucratic. In my view, that breed of Tory like to rattle on about the free market while they fear actual competition from the bottom rising up. I’ve digressed into calling Tories hypocrites before I’ve finished my second paragraph.
    There is a fear that given a basic garuanteed income, droves of people would quit there jobs and become feckless types. After resistance from the elites who don’t want to be taxed, that fear is the biggest barrier to a garuanteed basic income becoming the law of the land.

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