Thursday, August 19, 2010

Middle Class Benefits: Luxuries We Cannot Afford

Laura Kuennsberg, who I hear is presenting Newsnight tonight, has tweeted that a senior government source confirms they are reviewing 'middle class benefits' like winter fuel allowance and child care.

Good. These should never have been universal benefits and should only ever have been directed towards those who really need the support. If you're income rich, why on earth should you expect the state to give you money towards heating or child care? We simply cannot afford such luxuries any longer.


davidmorris said...

Hear hear.

I notice some news sources create headlines that make you think the government are cutting winter fuel allowance completely (one example is this: It'd be interesting to work out the political bias of those sources.

Cjjones27 said...

Regardless of the arguments for and against these universal benefits, the issue is that David Cameron, in the strongest possible terms promised to "keep what we inherit", and what is being suggested is a clear breach of that promise.

Getting past that part of the story, I am inclined to agree with you Iain. Universal Benefits is a luxury we cannot afford right now, especially at the expense of some of the other proposed cuts. Furthermore, the older generation are repeatedly protected at the expense of the younger generation, who are in danger of being left with a hideous legacy. If this starts addressing that imbalance then that has to be a good thing.

hafod said...

What gives you the impression that people's income remains static? People move in and out of work, they go on short-time, they are laid off, some are self-employed and barely break even in a recession. This applies to the "middle class".

These people will have to apply, re-apply and apply again - leading to vastly increased bureaucracy, the potential of overpayment and/or underpayment.

I'm a supporter of universal benefits because it means that those people who are working but not well off do not fall between two stools.

From this comment, I presume you would like to see the ConDems means testing OAPs next. After all, pensions are universal benefits and there are some wealthy pensioners who don't need the state pension.

hafod said...

The alternative to stopping universal benefits is to tax the rich at a reasonable rate. Does anybody need more than £100,000 annually to live a very comfortable life? The obscenity of average Premiership footballers earning £3m a year has to end, but at least these provide some entertainment unlike the scum-sucking leeches in the banks.

Peter said...

I fully agree Iain.
To live on benefits should be seen as a stigma. Just like being sent to the poor house in Victorian times.
If most of the population is receiving benefits this can never be the case.

Joe Public said...

"If you're income rich, why on earth should you expect the state to give ........."

I guess those who are 'income rich' and Taxed to the Hilt, are fed up with the state giving away so much of the tax they pay, to undeserving scroungers too lazy to get a job.

[Like all those £64k handouts given to ex-MPs who chose not to stand-again at the last election.]

Gallimaufry said...

International Aid: Ditto

David Lindsay said...

Middle-class benefits are right, just and necessary. Herbert Morrison professed never to have seen any conflict "between Labour and what are known as the middle classes". Aneurin Bevan denounced class war, calling instead for "a platform broad enough for all to stand upon" and for the making of "war upon a system, not upon a class". Both served under Clement Attlee (Haileybury, Oxford, the Bar and the Officer Corps), who was succeeded by Hugh Gaitskell (Winchester and Oxford). Harold Wilson was a Fellow of an Oxford college, and the son of a chemist and a schoolteacher. Jim Callaghan was a tax inspector. Michael Foot's public school may have been the Quakers' Leighton Park, but it was still a public school, which duly sent him to Oxford. Neil Kinnock's father may have been a miner, but he himself was a lecturer. John Smith was a QC. We all know about Tony Blair and Gordon Brown.

And why not? The median household income in this country is £21,320. That is the middle. Ninety-three per cent of children attend state schools. Every business is dependent on them, as it is on public transport and the National Health Service. Indeed, hardly anyone has private health insurance, and a large proportion of those who do, have it through their trade unions. And so on.

In the present state of affairs, extremely few are those who could do without their Child Benefit, or their tax credits, or their state pensions, or their winter fuel payments, or their free bus travel, or their free prescriptions, or their free eye and dental treatment, or their free television licenses. Taking away consumer spending power is hardly the way to aid economic recovery. On the bus travel, on the prescriptions, and on the eye and dental treatment, the question is of why anyone should have to pay for them upfront. As it is of why anyone should have to pay upfront for hospital parking, or for undergraduate tuition, or for long term care in old age, when this does not apply in certain parts of the United Kingdom. Which brings us back to Morrison's principle that all parts of the Kingdom should benefit equally from social democracy. And to the fiercely Unionist Bevan, with his platform broad enough for all to stand upon.

Paid for by what? Not by any private sector, as that term is ordinarily used. Thus defined, there is no private sector. Not in any advanced country, and not since the War at the latest. Take out bailouts or the permanent promise of them, take out central and local government contracts, take out planning deals and other sweeteners, and take out the guarantee of customer bases by means of public sector pay and the benefits system, and what is there left? They are all as dependent on public money as any teacher, nurse or road sweeper. Everyone is. With public money come public responsibilities, including public accountability for how those responsibilities are or are not being met.

Unsworth said...

This is part of the ongoing stoke-up and diversionary attack by the BBC. Kuennsberg has a lengthy history.

The narrative is 'review = outrageous cuts'.

Frankly a review is a review. If there is no continuing justification for expenditure, in the light of our current parlous state cuts are what is needed. Or does the BBC and Kuennsberg in particular continue to believe that we taxpayers should continue to fund an ever-increasing and bloated, non-productive (indeed counter-productive) public sector? As a BBC employee almost certainly she does.

I have yet to hear one BBC employee asking the obvious question - where has all the money gone, and why was it simply pissed away for thirteen long years?

Cjjones27 said...

@davidmorris where in that article do they talk about complete cuts - the closest it gets to is to say

"It would be the first major restriction in a universal benefit under the Coalition..."

Which is hardly "...cutting fuel allowance completely..."

Lord Blagger said...

So if you are middle class or above, then you should just pay and receive nothing in return?

People pay taxes for government services, just like paying a baker for bread.

If the baker decides to take the money and not supply the bread, you would feel more than agrieved.

That's what's going on. Extort money from the middle class and give nothing in return.

It's not going to work.

It's time for all those people who've recieved Labour's investment to start paying back that investment, with interest

Unsworth said...

@ Hafod

"Premiership footballers earning £3m a year has to end, but at least these provide some entertainment unlike the scum-sucking leeches in the banks."

That's an opinion. I find footballers to be profoundly dull and boring, whereas bankers tend to entertain me. Perhaps it depends on what you regard as 'entertainment'.

juga said...

The idea behind child benefit was to take money from working fathers and pay it to mothers, presumably because some fathers couldn't be trusted to look after their children. This whole concept is outdated today, never mind just for the better off. Most mothers go back to work so why not just make the necessary tax code adjustments rather than make payments?

john.boettcher said...

Many folk will be effected by this move -

My heart bleeds.

Just Wonderful said...

Should Sir Fred Goodwin, Sir Phillip Green, Tony Hayward or Tony Blair to name but a few all receive a state pension when they reach age 65? What about everyones favourite the bankers who earn millions per year, do they need a state pension?

Surely there is a need to target the benefits and pensions at people who really need them?

I just can't see how anyone can argue that all universal benefits should remain untouchable. It just doesn't make sense.

Praguetory said...

We could never afford these benefits in the first place. People like my parents who are baffled to receive a cheque for 250 quid or whatever it is for a bill they can easily afford anyway will be very pleased to see the coalition take this on.

MikeyP said...

The real stupidity is that for me, a tax paying pensioner, someone is paid to take the cost of the heating allowance from me in taxes and then give it back again. It would be much more sensible to just give the allowance on the basis of tax status. That information is already available.

gordon-bennett said...

Give the benefits universally because it's cheap to implement if you don't have to means test.

However, all such benefits should be declared as income in your tax return and taxed as part of your income to recover benefits from those who didn't need them.

In other words, give everyone a Citizens Income to help them to get along but tax it in the following year according to need.

eb said...

Agreed but Dave said they would remain.

However, since he renaged on his "cast iron guarantee" I doubt one can believe any of his promises.

Just another typical politician.

Hamish said...

There are two issues here.
One is means-testing benefits.
The other is re-defining 'old'.

With increased life expectancy and more people being hale and hearty into their eighties, it is ageist in the extreme to call someone old at the age of sixty. But that's the current threshold for the winter fuel allowance. I just use it for membership of my dance classes.

Woodsy42 said...

If you try and target the benefits you end up deepening the welfare trap.
For example: Housing benefits are already used as the admission ticket to various other benefits. This may seem fair and an easy way to target help. But all you are actually doing is increasing the value of housing benefit with loads of add-ons from different places. So if the recipient gets a job they lose not just housing benefit but everything else that goes with it!
The simple and fair solution is to give them to everyone but graduate tax rates better so you tax them back from the better off.

PatP said...

Having worked for the DWP I know all too well that the fiendishly complicated and expensive bureaucracy needed to administer any means-tested system would far outweigh any potential savings. It is cheaper in the long run to keep them universal.

Terry said...

Perhaps thought should be given as to why folk cannot afford to heat their homes in winter. I talk from practical experience. Gas price increase 40% October hardly mentioned. Gas price reduction 4% March widely spun. This is called greed and taking the piss. Pension increase nil. If these arseholes stopped profiteering the likes of me would not need Winter Fuel Allowance. They buy gas in advance, yes get caught pricewise occasionally but not as hard or often as they make out. fail to build adequate storage, UK has lowest storage capacity in Europe, and expect customer to pay for everything. Re-nationalise them now. And that from a lifelong Tory.

Charles said...

Wouldn't it be much cheaper to abolish the Winter Fuel Allowance and just add the amount to the pension payment throughout the year. You would save plenty in administration and general hassle.

Cinnamon Marine said...

hafod, Pensioners already are means-tested, for pension credit and pension savings credit to name but two. And then there's the means-testing for social care as well - my Grandparents had to have it done at least three times last year as their care needs changed.

comradepowell said...

Universal entitlement to benefits and universal distribution of benefits are not the same thing. Benefits should be there for when you need them.

For wealthy pensioners to be getting winter fuel allowance while others freeze because they happen not to be pensioners is just obscene.

And can someone explain to me why rich pensioners get free bus travel, while those on below-the-breadline wages have to pay extortionate fares so they can get to work to earn their pittance?

Newmania said...

David Lindsay your last paragraph is rubbish. The public sector crowds out the private sector because it is paid for by taxation that would otherwise be directed by the markets. Simple
On the median wage it is highly misleading ( for various reasons ) and until the Labour Party campaigns on the basis that everyone on more than £20k will be worse off we shall can assume they know it

Having said that if we are going to have benefits Universal ones are best . They do not redistribute and serve a useful social function ,. The NHS takes form the healthy and gives to the sick . Child benefits takes from me when I am young and returns the money when I have children when I need it . I wouldn’t invent it but it is part of the fabric now and to remove it from all of us with children who have paid in for ours is obviously quite unfair

I can see why lain Dale might think Child benefit is a joke but illogical though it may be its removal will be bitterly resented by ordinary Conservative voters who have paid

Iain -You entirely fail to understand the significance of this issue I am afraid . It would be in effect a tax rise levelled at middling people with children and that is outrageous

Mr. A said...

Yes the middle classes should receive something for the money they pay, but it should be an efficient and non-hectoring health service, roads without potholes, efficient rubbish collection etc, rather than pocket money to top-up their already sizeable incomes.

Alas, it seems we won't see better public services. Already the likes of Medway have cut library books and after school clubs but continued funding their hideously expensive "Tobacco Control" unit which, when last seen, was encouraging schoolschildren to assault smokers and steal their cigarettes in the public streets - all with Police endorsement (see "Big Brother Watch", "Adam Smith Blog" and others).

Osama the Nazarene said...

The moment you introduce means testing you introduce bureaucracy and with that the relevant jobsworth's and nosey parkers. Is the giving of universal benefits to a handfull of millionaires really justify the introduction of a means testing bureaucracy? Just asking.

Obnoxio The Clown said...

Iain, I'm sure you'll be surprised to hear that I disagree with this.

All benefits should be universal, arguing for means testing simply builds a bigger civil service and more government. By all means, reduce the value of the benefit, but make it universal and stop the greedy civil service ballooning on the back of an apparent attempt to save money.