Universal benefits are almost universally derided as inefficient ways of spending taxes. "Targeting" is now the name of the game, so for example Child Benefit is removed from those earnng more than £50,000 (in a very complicated way which nobody understands, saves little money, has unexpected consequences and introduces further peculiar injustices).
Sometimes targeting is necessary, but it should always be fair, easy to administer, genuinely cost-saving, and should not introduce hidden perverse incentives.
However, universality is an important cement that underlines how we are geniunely "all in it together". It is an important part of "community", the 'Big Society', or whatever you want to call it.
Two of the most important and most expensive benefits are already universal or nearly so - I mean the free-at-point-of-delivery NHS, and Old Age Pensions. Seniors prefer not to see pensions as a benefit "because we have paid for it". However, actually that is not true: today's pensions are paid using today's taxes - just as we paid for our parents' pensions when we were working. Most seniors are NOT 'workers', whether they like it or not.
I want to argue that universality is an important principle, because it binds in people who might otherwise regard themselves as above and beyond 'state benefits'. It enhances community. For precisely this reason I advocate a "Universal Citizen's Income" (UCI), which would provide EVERYBODY with a small fixed income - under £100 per week. Beyond this basic amount, ALL income would be taxed. (Extra amounts would be available for specially needy groups, such as disabled people, single parents and the elderly.)
Other universal benefits have less financial impact, but are equally important in theire social effect of binding people together. I am thinking of items that apply only to seniors - the free bus pass, the winter fuel payment, and the free TV licence. The first and last have very little economic cost, because no extra services have to be provided for these seniors: the bus would run anyway, and so would the TV. The winter fuel payment is a different matter if it actually leads to an increase in fuel consumption, but is best seen as a universal income benefit, which could be part of UCI if that regime were introduced.)
Footnote (1): "We are all welfare scroungers" - and introducing universality reduces the fissures in society. Also, many benefits benefit the better-off. Housing Benefit goes to landlords. It also benefits employers who thereby do not need to pay their workforce so much, because they know that the state will subsidise incomes. Similarly, bus passes subsidise bus companies - it is they who receive more resources fomr the state.
Footnote (2): A slightly separate point is whether universal benefits should be completely free, or whether token payments should be made whenever a service is used. Such payments might reducing over-consumption. But by how much? So a small payment of £1 per trip might reduce unnecessary bus-use during rush hours and other congestion periods.
Before deciding wheth it is worth introducing token charges, one must consider the following social costs:
Sometimes targeting is necessary, but it should always be fair, easy to administer, genuinely cost-saving, and should not introduce hidden perverse incentives.
However, universality is an important cement that underlines how we are geniunely "all in it together". It is an important part of "community", the 'Big Society', or whatever you want to call it.
Two of the most important and most expensive benefits are already universal or nearly so - I mean the free-at-point-of-delivery NHS, and Old Age Pensions. Seniors prefer not to see pensions as a benefit "because we have paid for it". However, actually that is not true: today's pensions are paid using today's taxes - just as we paid for our parents' pensions when we were working. Most seniors are NOT 'workers', whether they like it or not.
Similarly, NHS service does not have to be regarded as a universal benefit - but it is. Moreover the free-at-point-of-delivery principle is universally popular, as is free education. Exceptions have been introduced (dental care, prescriptions, post-compulsory learning etc., etc.), but the principle remains, and so does its popularity.
I want to argue that universality is an important principle, because it binds in people who might otherwise regard themselves as above and beyond 'state benefits'. It enhances community. For precisely this reason I advocate a "Universal Citizen's Income" (UCI), which would provide EVERYBODY with a small fixed income - under £100 per week. Beyond this basic amount, ALL income would be taxed. (Extra amounts would be available for specially needy groups, such as disabled people, single parents and the elderly.)
Other universal benefits have less financial impact, but are equally important in theire social effect of binding people together. I am thinking of items that apply only to seniors - the free bus pass, the winter fuel payment, and the free TV licence. The first and last have very little economic cost, because no extra services have to be provided for these seniors: the bus would run anyway, and so would the TV. The winter fuel payment is a different matter if it actually leads to an increase in fuel consumption, but is best seen as a universal income benefit, which could be part of UCI if that regime were introduced.)
Footnote (1): "We are all welfare scroungers" - and introducing universality reduces the fissures in society. Also, many benefits benefit the better-off. Housing Benefit goes to landlords. It also benefits employers who thereby do not need to pay their workforce so much, because they know that the state will subsidise incomes. Similarly, bus passes subsidise bus companies - it is they who receive more resources fomr the state.
Footnote (2): A slightly separate point is whether universal benefits should be completely free, or whether token payments should be made whenever a service is used. Such payments might reducing over-consumption. But by how much? So a small payment of £1 per trip might reduce unnecessary bus-use during rush hours and other congestion periods.
Before deciding wheth it is worth introducing token charges, one must consider the following social costs:
- administrative costs
- extra time spent collecting the fees.
We should also estimate the relevant price-elasticities i.e. by how much would bus 'consumption' reducewith a £1 charge? a £2 charge? etc.. Also, would the charge impose social costs by inhibiting trips which actually have a social gain? For example, would I go to see my Granny less if I had to pay my own bus fare, and would Granny's care suffer as a result? Similar considerations apply in much larger ways to the unlikely-to-be-implemented proposal that A&E and GP-services users ahould also pay a nominal fee.
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