Ed should pledge to scrap “middle class benefits”

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Ed should pledge to scrap “middle class benefits”

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Cut TV licences and bus passes, defend universal public services

The current issue of Prospect reviews the taboos in British politics today—those orthodoxies which politicians are loathe to challenge because they think it will lose them elections. At the top of the list is threatening to touch universal benefits, like the winter fuel allowance, and pensioners’ free TV licences and bus passes. With the elderly representing the demographic most likely to vote, any politician who rolls their tank onto pensioners’ well-mowed lawns will be punished at the polls, or so the argument goes.

While attacking sacred cows can be a dangerous business, if attempted at the opportune moment by the right person it can sometimes deliver substantial political returns. In our age of austerity, universal welfare entitlements are no longer justifiable, and Ed Miliband has a golden opportunity to bolster his position by calling for their abolition.

Miliband can argue for the means-testing of “middle class benefits” with a clear Labour conscience. Buying TV licences and the like for well-off pensioners no longer represents a sensible allocation of scarce government funds, and introducing a means-test aligns with his commitment to fairly spread the pain of deficit reduction across the income spectrum.

Labour should always defend universal public services: giving savvy and demanding middle class patients and parents a stake in their local hospitals and schools helps to assure standards for everyone, and these public institutions as far as possible should not be segregated by class or income. These arguments for universality (enlisting the middle classes to champion services, and integrating communities) fail, however, to make sense when talking about the income transfers of the benefits system. In other words, Labour can coherently support universal public services while arguing for means-tested welfare.

Miliband should pledge to scrap universal entitlements because it is the right thing to do, but he should also be alive to the political opportunity of such a move. Labour has made a pivotal strategic decision to back deficit reduction over all-out Keynesian stimulus. The problem is that whenever Miliband criticises Cameron’s cuts programme, the prime minister can parry his blows by saying Labour has nothing constructive to say about deficit reduction. Putting some flesh on the bones of a plan would neutralise this rhetorical ploy.

As the contributions in this month’s Prospect attest, opinion formers on the left and right are increasingly questioning middle class benefits. There is a reward for the politician who gets ahead of the pack: with Miliband’s strength being questioned, flexing his political muscles with a carefully calculated act of iconoclasm might hush the critics.

  1. February 13, 2012

    Sandra Reardon

    At last! I’ve been talking and posting to all kinds of people that ALL state financial benefits should be means-tested. (And I did write to Ed Miliband’s office about this). How ridiculous that wealthy people and people with good incomes are being given state handouts. I have worked (as a teacher) and paid tax all my life, and I pay tax in retirement.I’ve seen people with much better incomes than me being paid welfare benefits. It’s a nonsense. I hope the Labour Party have the confidence to tackle this anomaly.

    Sandra Reardon

  2. February 18, 2012

    Alyson

    Well, Sandra, I am happy for you that you have benefitted from a fair and equitable taxation system, which now looks to become far less fair or equitable. There needs to be much higher taxation on high earners and a cap on salaries more than 100 times the lowest paid member of any corporation, including bonuses that get paid to the high earners while the low paid are ever more squeezed.

    The middle classes are expected to have 2 parents working, and pay for childcare, just to pay a mortgage or equivalent in rent. Unemployment and low wages place an even tighter squeeze on families with children.

    My view is that you widen the range of benefits not narrow them, to include free bus passes for low earners and unemployed so that they can at least get to work for a pittance without starving, or going without heating. This is a dog-eat-dog political climate being ushered in, that does not value the importance of a regulated state infrastructure that protects the low paid as much as it protects the high paid.

    We have been able to trust our institutions because they are accountable to us. Free trade free-loaders have no such compunction. If Ed wants ot get elected he needs to focus on taxing those who have secreted the real money into unavailable dark corners, leaving an economy running on empty.

    The real money is hidden by the very rich and it is out of circulation. Squabbling between the have-nots is just a distraction from the puppet-masters who have brought us to this sorry state.

  3. February 18, 2012

    john parfitt

    I sent you a letter earlier — hope you will publish! Having worked for 45+ years and paid rates and taxes through the nose our retirement was hit by the Equitable and ICL/Nortel scandals which put big holes in our pension and widow’s benefits: we then paid into PEP/ISA schemes designed to attract savers only to have Brown steal(sic) the tax relief. If Osborne will make good our losses he can have all the freebies back and we will be much better off. At the macro level we need savings to invest for national recovery: d’you think our younger family members (aet 13-28) will save when they see grandad and grandma being ripped off by useless regulaion and government dishonety?

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