April 25 2019 and a House of Lords committee chaired by Lord True has published a report arguing for the downsizing and discontinuation of what are known in the UK as "pensioner perks" - freebies available to those over a certain age: free bus travel, free TV licences, pension top-ups labelled as "Winter Fuel Payment", and so on. These benefits are not means tested and not taxed - so they are regressive benefits, worth more to higher rate taxpayers than basic rate taxpayers. I re-publish below my 2016 case against them all, as published in my book The Best I Can Do.
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 .
Where I live, looking at workers boarding the bus and paying their fares on the
way to low-paid jobs, that’s not far from the reality. Nor is it far from the
reality, that poor people pay and better-off Over Sixties don’t. 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 lies with our
political parties, always looking for cheap ways to gain the favour of those
most likely to vote. Any party now proposing to withdraw the passes would face
a backlash of unreasoned wrath. My Benefits, right or wrong!
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 in the UK. In
relation to former earnings, that Pension is much lower than the European
average: about one third against an average of a half across twenty-seven other
European nations. Our governments 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 for
decades no one challenged it.
Self-respect
is very much connected to the ability to make your own choices. 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. 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! In a
better world, older people would dispose of enough income to make their own
choices and thus maintain an important aspect of personal dignity. 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).
*
The
Bus Pass is a symptom of a deeper problem which resides at the 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
under its own control and that all outgoings, whether to government departments
or citizens, 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 was deeply disappointed in 2013 when he was
not able to get his war in Syria, supporting Syrian jihadis. He had
better luck in 2015 when Parliament agreed to his new plan to attack jihadis in Syria. It put him up there
with the Big Boys.
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 bombing far
away countries. Fortunately, the Treasury pot is usually big enough to absorb
the costs of a small war, one which sticks to the cheap route to failure, that
of bombing civilians. Money can be shifted between notional budgets and, if
not, borrowing can be discreetly increased. But when monies are ring-fenced and
there are entitlements, it becomes 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
obvious 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 was once
supposed to be about. But now it isn’t. No one pays in 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 (often 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
symbiotic Treasury - Politician commitment to avoiding entitlements and
favouring handouts immediately opens the door to the parlour game known
as Benefits Scrounging, in
which the winners are those who work out every handout for which they can make
themselves eligible and promptly claim them all. Those who celebrate their 60th
birthday by 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.
*
We
have an increasingly shaky idea of what it means to be a citizen. The benefits
culture, created by politicians and sustained until very recently by an
all-party consensus, has been disempowering. It encourages childishness at
election times as 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.
An
obvious 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.
Probably
the only interesting alternative to this approach is the idea of a universal
Citizen Entitlement to a flat monthly income just about big enough to live on.
Everyone would get it, regardless of income or age. For those in work, for
example, it would simply lower their tax bill. For those not earning, for
whatever reason, it would be a handout but without the disfiguring features of
the electoral bribes currently on offer to selected groups, most obviously and
repeatedly in the UK, the voting over 60s.
The
idea has the merit of threatening the destruction of a thousand benefits bureaucracies,
most of which end up in the newspapers for incompetence of one kind or another.
So it is a sleek proposal. It has the de-merits that it hands money to people
who don’t need it and, in practice, will still have to include small print
provisions for special cases like those whose disabilities oblige them to make
use of expensive equipment or carers. From where I am coming from, it has the
demerit that it puts all citizens in the position of state dependents. I have
yet to read an argument that persuades me that is not the case.
© Trevor Pateman 2016. First published in this form in Trevor Pateman, The Best I Can Do (degree zero 2016)
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