Welfare reform: The best Prospect articles

Labour shadow chancellor Ed Balls declared in a speech this morning that if Labour is elected in the next general election, it will scrap winter fuel subsidies for the richest pensioners. About 600,000 people over 75 who pay higher and top income tax rates would be affected. The move forms part of attempts to convince the public that Labour is capable of taking difficult spending decisions, with Balls stressing that Labour will adopt "iron discipline" on spending. It is expected to save around £100m, a relatively small saving of 0.5 per cent of the welfare budget. The announcement is nonetheless significant in heralding a symbolic shift by Labour in the ongoing debate on the welfare state away from universal benefits for the elderly.

Over the past year, Prospect has looked closely at the various issues at stake in the welfare debate. Here are the highlights:

1. Who benefits from welfare? by Philip Collins (£)

Philip Collins's cover story from our current issue will give Ed Miliband and Ed Balls pause for thought. He argues that the left has to grapple with the dilemma between bolstering the contributory principle of the welfare state, widely supported by the public, and the role of the welfare state as a vehicle of redistribution:

“The public wants a welfare state in which the principle of desert is enshrined but it wants it to be cheaper, not more expensive.”

2. My answer to the welfare crisis by Frank Field (£)

Accompanying Collins's article were Frank Field's proposals for a new kind of welfare state. Field, a Labour MP, makes the case for welfare based on mutual insurance funds whereby members of national schemes would participate in a form of “shareholder” governance of services linked to higher contributions. This could, he writes, be a great opportunity for Miliband:

"Embracing such a welfare and health reform programme would be the clearest sign yet that Labour had learnt the lessons of its welfare reform failures, and that it alone of the three parties knows how to ride two political horses at once."

3. Wishful thinking on welfare by Bronwen Maddox

In her editorial from the current issue, Prospect editor Bronwen Maddox notes the strength of public feeling over welfare, which "springs from an interpretation of fairness that politicians would be wrong, as well as foolish, to ignore." The three major parties have nodded in the direction of a return to contribution, she writes, "but they have all been incoherent."

4. A quiet revolution by Peter Kellner

Last year, Peter Kellner wrote an influential cover story about public attitudes towards welfare. A YouGov survey found that 74 per cent of those polled believed that the government is over-spending on welfare. A mere 8 per cent said that they were net gainers from the overall value of benefits and public services in relation to what they paid in, while 55 per cent said they were net losers. 48 per cent opposed scrapping the winter fuel allowance on the basis that pensioners have spent their working lives paying for their state retirement benefits.

5. Scrap the winter fuel allowance by Patrick Nolan

But in a recent blog, Patrick Nolan, chief economist at Reform, argues in favour of scrapping the winter fuel allowance completely. He writes that almost 90 per cent of payments go to pensioners who are not in fuel poverty. At a time when people are living longer, and government finances are straitened, "there are better and less costly ways of helping the most vulnerable."

6. Bad universalism by Gavin Kelly

After Balls's speech, the debate on universal benefits is set to intensify. Expect to hear more arguments along the lines of Gavin Kelly's. Universal welfare benefits have generated “bad policy in pursuit of good politics,” he writes, as resources are shifted to key electoral groups, but with little intellectual rationale. He argues that the persistence of universal fuel allowance and free travel passes for pensioners represents "bad universalism." Politicians would better redirect resources towards a new system of care for the elderly.