Thoughts on politics and life from a liberal perspective

Friday, 2 November 2012

Hasn't David Gauke got a point?

The New Statesman is highlighting a "Quote of the Day" from Treasury minister David Gauke today regarding the child benefit cuts (taken from an interview by Paul Waugh and Sam Maccrory on Politics Home):

"I think there’s a lot of people who are in favour of reducing the deficit but then when it’s something that affects them there can be a degree of fiscal nimbyism."

Well hasn't Gauke got a point? This will affect the top 15% of families. You can't get a much more progressive attempt to cut the benefits bill.

Of course people are going to complain when their benefits are cut but I'd rather it was this than further cuts elsewhere in the benefits system. If I had my way "universal benefits" like the winter fuel allowance and free bus passes would also be means tested.

I'm not claiming the way in which this policy is being implemented is good by the way. It's very messy but the principle that cuts should fall where possible on those with the most income is surely one the New Statesman should be applauding?


Anonymous said...

Has anyone done a cost analysis of means testing such benefits.

I do wonder if it will simply be cheaper to keep them universal, and then add .05% tax on upper brackets which uses existing administration.

asquith said...

I agree with anonymous. The disincentives for people to earn and save more are simply too great. I wouldn't have child benefit at all if I were designing a welfare system from scratch, but I'm not, and given that it's going to exist then it should exist in its present form.

It's GOOD that people earn a lot and their grannies have decent pensions, and they shouldn't have universal benefits withdrawn. It would only create more resentment felt by middle-earners towards the poor (ok, there's some resentment amongst childless people, but as I say child benefit is always going to exist as its total abolition would be even more suicidal than this for any party trying to do it).

All that means testing does is encourage people to be poor and stay poor. Have we forgotten the last government, and the woes inflicted by working/child tax credits and the even worse pension credits? The coalition raised the basic state pension, rightly, and they are onto something with the universal credit, albeit some of the details need to be thought through more carefully.

Are we now going to have people refusing to work longer or take on more responsibility because they are worried about their situation changing? (A situation which, again, the coalition alleviated at the lower end by its raising of the income tax threshold).

This idea, which seems to have begun with Osborne, should in my view be forgotten. Ignore the usual stupid jeering about a "u-turn" and abandon the whole thing. In my view means testing is just an attempt to de-legitimise the welfare state and set the middle and upper middle class against the poor.

I am not a fan of a sprawling welfare empire but what is given out should be means-tested as sparingly as possible.

Cimidyue said...
This comment has been removed by the author.
sanbikinoraion said...

I agree with asquith; universal benefits mean that everyone feels like they have a buy-in to the welfare state, they reduce the chance of a poverty/welfare 'trap', give everyone involved more dignity and less stigma, and are easier to administer.

Means-testing is a mealy-mouthed way for politicians who want to be tight-fisted without thinking the consequences through to make a few more pennies.

Look at how New Labour trapped a generation of young people in a welfare trap in which working wasn't worth the effort.