Prospect readers have their sayby Prospect / June 19, 2013 / Leave a comment
Published in July 2013 issue of Prospect Magazine
Making a contribution
For too long, politicians declined to debate the shift from contributory (and universal) benefits towards means-testing. Philip Collins’s article (“Who benefits?”, June) is therefore welcome. But the very real “tension between equality and contribution” is perhaps not as insoluble as he suggests. Egalitarians reject means-testing as a divisive mechanism that narrows social security’s diverse functions to poor relief. The contributory principle—provided it’s interpreted inclusively and includes unpaid care as contribution—offers stronger social protection, including for women in couples who benefit from individual entitlement. We look to more progressive taxation and national insurance contributions to achieve vertical redistribution.
Ruth Lister, House of Lords
Philip Collins poses two major objections to an insurance-based welfare system. One is cost and the other is that such a move would limit welfare’s redistributory powers, which the centre-left values.
The cost of an insurance-based welfare system is one which ought to be given over to the contributors to decide. If pensions are to be paid for, adequate long-term care costs covered fairly, and an ever-rising NHS bill met, then costs will rise. In my proposals, taxpayers as contributors would control these budgets, and therefore how much they paid in and received back (in payments and services).
To have a fair contributory welfare state also provides the basis for limited but transparent redistribution. Eligibility would be based on financial contributions but, in my scheme, individuals performing functions which society values but for which they are not paid, such as providing care, would have their contributions covered. However, the principle that welfare needs to be earned would remain crystal clear. The advan…