Friday, 6 June 2014

My Benefits, Right or Wrong

This essay tries to bring together several themes from maybe a dozen of my Blogs over the past few years

I avoid buses. In both senses. Where I live, they are involved in most city centre road fatalities. And I don’t enjoy sitting in one. Partly, that’s because we don’t have kerbside payment or conductors. If you need to pay, you pay the driver. So your journey is often painfully slow.

The people who pay the driver look like tourists, language school students, students, and mostly female workers of one sort or another – I guess, cleaners or care workers on their way to a shift. But anyway, low paid workers. The minimum fare is now over two pounds.

The people who don’t pay are the Over Sixties who flash their Bus Passes. Their fares are being paid by someone else – taxpayers.

I’ve never claimed my Free Bus Pass. I would be ashamed to wave it while paying passengers watch. Imagine that it was Coloreds who paid and Whites who didn’t (and looking at the cleaners and care workers, that’s not far from the reality).

And yet the Over Sixties, quite solidly and sometimes fiercely, now seem to believe that they have a Human Right to bus travel paid for by others – even though Bus Passes are a very recent invention.

How did this come about? The fault clearly lies with our political parties, always looking for cheap ways to gain the favour of those most likely to vote. And any party now proposing to withdraw the Passes would face a backlash of unreasoned wrath.

Bus Passes are not Pensioner Passes. You qualify by virtue of reaching your 60th birthday, well below the ages at which most people qualify for state pensions. At sixty, many people are still working, their children are gone and they have paid off mortgages. They are better off than at any time before. Many of those waving Bus Passes – of course, not all – are better dressed than they have ever been. They can afford to be.

Eventually, they will become old and even frail. It’s always stressful to watch a frail elderly person board a bus, struggling with shopping bags and sticks. They don’t need a Bus Pass any more. They need a once-a-week Taxi Pass.

Or, rather, they need adequate pensions. Free Bus Passes are not only electoral bribes. They are also one of the cosmetic means by which feckless governments have sought to disguise the inadequacy of State Pension provision. They have been too fearful to force people to pay enough into retirement income schemes to fund adequate pensions and reluctant - until absolutely forced by a huge rise in life expectancy- to raise the pensionable age. Until very recently in the UK, the State Pension age for women was set at sixty. Men at sixty five.

No one challenged that extraordinary bit of entrenched sex discrimination. It had its origins in discriminatory thinking: women filled up the workforce during two world wars and thus qualified for pensions. But allowing them to take their pensions at sixty was also meant to ease them out of the workforce, leaving more room for men who had fought. Over time, the discrimination transformed from discrimination against women to discrimination in their favour. But no one, literally no one, challenged it.

Self-respect is very much connected to ability to make your own choices. The Bus Pass is a clunking decision by politicians to make choices for you: Here, my good woman, take this Pass and use that Bus over there! And show some gratitude!

Older people generally benefit from walking or even cycling but politicians want you to take the Bus. The bus companies are happy enough. They get paid.

In a better world, older people would dispose of enough income to make their own choices: walk, cycle, taxi, train, drive - or bus, where they would pay the same fares as everyone else. It would be a better world not least because it would help maintain self-respect: better to choose the bus instead of having it chosen for you.

I realise there is something in my own history that makes me think like this. As a grammar school boy in the 1960s, my School Dinner Pass was a different colour from that of nearly everyone else. I qualified for Free School Dinners and my Pass colour indicated that, not only to the Dinner Ladies but to all the other boys queuing with me.

I qualified for Free School Dinners because we were poor –really, very poor. I lived with my mother who was most of the time not well enough to work and that meant she depended on the National Assistance Board (forerunner to the Ministry of Social Security) for five pounds per week, of which one pound fifty went on rent.

But in principle there was no reason why she should not have been additionally awarded whatever it took to cover the cost of school meals, allowing me to pay for them in the regular manner. Or even if it was administratively cheaper to issue me with a Free Dinner Pass, there was no reason for it to be colour coded.

In the same way, it would be acceptable to withdraw the Bus Passes and add to the State Pension the equivalent of the money saved. All that you lose is the self-satisfied smile of the politician who wants you to doff your cap and thank him (Gordon Brown, Ken Livingstone) for the Pass.
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The Bus Pass is a symptom of a deeper problem which resides at the very core of the British Treasury and the way it relates to British governments. The Treasury hates two things above all: ring fenced money and entitlements. It is committed to the ideas that all revenues should go into a single big undifferentiated Pot and to the idea that all outgoings are a matter of discretion.

That is, of course, an understandable way for a Treasury to think. It gives you the maximum of flexibility in what is often – thanks to politicians – a struggle to make the books balance. But it is also completely symbiotic with the interest of party politicians. They too want maximum discretion. Let me give one example.

British prime ministers normally want to pick at least one war to fight during their time in office. These wars of choice can be vote-winners. They allow the prime minister to walk tall. Mr Cameron –Prime Minister as I write – was deeply disappointed when he was not able to get his war in Syria, supporting the jihadis.

But equally a government going to war does not want voters to think about the financial costs. The last thing it wants is being forced to impose a War Tax. That would make voters think twice about their gung-ho enthusiasms for invading far away countries.

Fortunately, the Treasury pot is usually big enough to absorb the costs of a small war. Money can be shifted between notional budgets and, if not, borrowing can be discreetly increased. But if monies were ring-fenced and there were entitlements, it would all be more difficult.

As a result of this way of thinking, both Treasury and politicians are committed to the ideas (though they would never admit it) that All Benefits are Voluntary Hand Outs and No Benefits are Entitlements. In other words, citizens have no rights.

The soundest way to create entitlement to Benefits is through insurance schemes. People pay into the scheme and, at the same time, they are informed of their Entitlements under the scheme. That is what Britain’s National Insurance system is supposed to be about. But it isn’t. No one pays anywhere near enough to accumulate entitlement to the Benefits they can claim. Nowadays, it is merely a concession to the idea that there can be Benefits to which you are entitled because you have insured for them. If the Treasury had its way, even that concession would be abolished. The Treasury loathes the idea of insurance. It gets in the way of tax and spend.

The Treasury has almost a winning hand in one simple fact about our psychology. We hate it when we see money removed from our pay packet before we even get it: Pay as You Earn taxes, National Insurance. If National Insurance was for realistic sums of money we would hate it even more.

But when it comes to paying 20% Value Added Tax on virtually everything we buy – well, we don’t even notice it (partly because we don’t see it separately itemised). This is the Treasury’s winning hand – taxes we don’t notice. Not only that: such invisible taxes are not linked to any specific government expenditures. The Treasury gets just the kind of money it wants, money it can use as it (or its political masters) please.

The Treasury  & Politician commitment to avoiding Entitlements and favouring Hand Outs immediately opens the door to the parlour game known as Benefits Scrounging, in which the winners are those who work out every Hand Out for which they are eligible and promptly claim them all.

The Over Sixties whose 60th birthday is celebrated claiming their Free Bus Pass are benefits scroungers. They have no entitlement to the Pass, they have done nothing to deserve it, they often don’t need it – but it’s there, a Handout, yours for the asking.

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People in Britain have an increasingly shaky idea of what it means to be a citizen. The Benefits Culture created by politicians is disempowering. It encourages childishness at election times: voters shop around looking for the party which offers three for the price of two. No more than that. No expectation that you think about the future, about your children and grandchildren; certainly no expectation that you think about right and wrong, justice and fairness.

The route towards re-building ideas of citizenship involves, among much else, dismantling the Handouts culture and re-instating the idea of a Contributory system: you pay in for health care, unemployment benefit, and pensions. That must be the expectation for nearly everyone, with a non-contributory social safety net principally for those who are born disabled or become so.

It also involves challenging the Treasury & Politician collusion. There is no reason why money should not be ring fenced, why taxes on X should not go towards paying for Y and only for Y. If politicians want a war, then they must use a War Tax to pay for it. If voters want a War, then they should be obliged to put their money where their flags wave.















  

3 comments:

  1. I think you'll find that nowadays it is not PC to refer to people as Coloured, as the term is considered to be demeaning.

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  2. The sentence alludes to racial segregation on buses in 1950s America, ended thanks to Rosa Parks and the 1955 - 56 Alabama bus boycott - to make this clear I have changed the spelling

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  3. I agree with much of what you say, especially about the (unintended?) societal consequences of the Welfare State and the apparent patronising of older people through unasked-for 'handouts'.

    But here in London I think we see it a bit differently regarding the bus pass issue at least.

    Free bus travel for pensioners originated in 1973 when Labour gained control of the GLC largely on a ticket of heavily subsidised public transport across the board to promote low cost public transport as a solution to increasing road congestion and to oppose the previous Tory administration's policy of encouraging more road building, notably the Ringway, and placating the 'homes not roads' pressure group which helped Labour win the election.

    There were leftist councils, Lewisham was one, suggesting free public transport for all in London, so maybe the idea of the pensioner pass was some sort of political compromise when the incoming Labour administration obviously had to be more moderate for budgetary reasons, also that pensioner generation had been involved in some way in WW2.

    OK, it was about local politics and possible environmental issues, and the debate about private/public interests but the GLC had no input in setting pension rates, so the pensioner travel concession was not a part of national economic policy at that time to cap pensions by stealth.

    I'm also interested in your views on social insurance, whilst agreeing in principle I'd appreciate some finer tunings on how it could be realistically implemented.

    It obviously depends on full employment, so there is a job available for everyone who wants one so they can pay the NI contributions regardless of the levels they are set at, this is blatantly not the case in the UK at the moment, regardless of the government rhetoric about unemployment being caused by the lazy 'workshy' and the solution being to line the pockets of ever more private Welfare to Work providers who are taxpayer funded to deliver motivational programmes to encourage youngsters to apply for virtually nonexistent jobs. We have the ONS Labour Market figures freely available every month which give a fairly consistent picture that the ratio of job applicants to advertised vacancies comes out with an average adverse ratio 5:1.

    Even if we could fix unemployment a bit, I still don't see how a social insurance scheme could be fully equitable based on inevitable disparity of incomes.

    Are you saying for instance that a person on minimum wage should only have restricted access to healthcare according to what they have been able to pay in, probably not, but I'd appreciate some clarification.




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