While David Cameron and Owen Jones unite in favour of universal benefits, I want us to get explicit about why redistribution matters to society

by Stephen Tall on April 30, 2013

owen jones david cameronIt’s an odd coalition: left-wing commentator Owen Jones and Tory leader David Cameron united as one. Yet that unlikely alliance was formed yesterday, as both defended universal benefits for wealthy pensioners and both fought shy of asserting the importance of redistribution.

David Cameron’s defence was in response to Iain Duncan Smith’s rather odd suggestion that the answer to millionaires getting a fuel allowance is that they should voluntarily hand it back to the government. Those trusty ‘sources close to the Prime Minister’ briefed journalists that IDS was on his own:

Downing Street today distanced itself from Iain Duncan Smith’s suggestion that wealthy pensioners should give up some of their benefits, including cold weather payments, free bus passes and television licences. The Work and Pensions Secretary revealed a helpline was available so wealthy OAPs can return their winter fuel allowance. He said those who could afford to should forego free state handouts. But David Cameron has insisted he will stick to his promise not to cut them. Number 10 insisted the Prime Minister remained committed to protecting the universal benefits for all pensioners.

What David Cameron is essentially doing is invoking the old Thatcherite argument: that the Conservatives’ job is to stick up for ‘our kind of people’. It’s the same reason Margaret Thatcher defended taxpayer-funded assistance for those with mortgages (MIRAS as it was known) — it’s only justification was that it was popular with those ‘aspirational voters’ she saw as her constituency.

Owen Jones’ reason for defending universalism is different, of course. It’s not that he wants low-paid workers to subsidise wealthy pensioners (though that is the effect). He just sees it as a price well worth paying for the principle of universal welfare. Here he is in the Independent yesterday:

The universal basis of social security is this: “Everyone pays in, everyone gets something back.” It should be seen as inextricably linked with citizenship: that all of us have access to certain rights, whoever we are.

There’s a superficial integrity about Owen’s defence of the collectivist welfare state: we’re all in it together (to coin a phrase). However, it’s a defence rooted in fear: the fear of making an explicit defence of redistribution from the wealthy to the less well-off. If Owen were being entirely honest he would probably admit that the reason he’s happy to see the likes of Alan Sugar get a free TV licence is that it buys the beneficiary’s support. Those perks for the rich are our only hope, apparently, of persuading them to help out their less fortunate fellow citizens.

I don’t buy that depressing argument. I don’t buy it for two reasons.

First, I don’t believe in a ‘boondoggle’ welfare state which collects taxes from everyone — including from the least well-off — and then arbitrarily hands back some of that cash to those who don’t need it.

And secondly, I don’t think we should be coy about arguing for the principle that the wealthiest do need to contribute back to society with no expectation of receiving a bribe to do so. There are entirely rational reasons for recognising that taxes pay for public goods (health, education, transport etc) which benefit all private citizens (even if they don’t use those services themselves) which in turn creates the conditions for a prosperous society.

Instead of hiding behind the cloak of universal benefits, we should be crystal clear about why redistribution matters for social justice: the welfare state is paid for by those of us who can afford it and there to help those who need it because we all benefit from a society where we look out for each other.

* Stephen Tall is Co-Editor of Liberal Democrat Voice, a Research Associate for the liberal think-tank CentreForum, and also writes at his own site, The Collected Stephen Tall.

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6 comments

Universal benefits give a simple system of distribution. Taxing them is a simpler way of dealing with the wealthy recipients. As pensions are taxed at year end, why not use system to solve this smaller problem?

by Sadie Smith on April 30, 2013 at 9:11 am. Reply #

It's a simple first step, you're right. But longer-term I'm unconvinced by the case that we should continue to tax the poorest to hand out benefits to the wealthiest so that they can be taxed on those same benefits.

by Stephen Tall on April 30, 2013 at 10:40 am. Reply #

“It’s not that he wants low-paid workers to subsidise wealthy pensioners (though that is the effect). ”

Low-paid workers don’t subsidise wealthy pensioners. Think about it, please actually think about it. Those wealthy pensioners pay (and paid) more in tax than the value of public services they received. The low-paid workers are not subsidising anyone as they receive more in the value of public services they receive than they pay for through taxation.

That’s how universal benefits re-distribute from the wealthy to the poor. Child benefit is a classic example. The benefit received is fiscally regressive (the rich receive less as a proportion of their income) and is paid for through progressive taxation (such as income tax which increases with earnings). Therefore, a wealthy couple pay more to fund the child benefit system than they receive in child benefit. A poor couple receive more in child benefit than they pay to fund child benefit through taxation.

by Steve on April 30, 2013 at 11:06 pm. Reply #

“But longer-term I’m unconvinced by the case that we should continue to tax the poorest to hand out benefits to the wealthiest”

They’re not being taxed to pay out benefit to the richest. That is either a deliberate lie or a fundamental lack of awareness of how taxation and public spending works.

by Steve on April 30, 2013 at 11:08 pm. Reply #

tax isn’t an ordinary ‘contribution’ to society and redistribution isn’t the expense of fostering citizenry, and it’s because these political associations have been made that the issue welfare has poisoned the political debate – and the system is tearing itself apart in complexity.

Until we can agree on an answer to the question ‘what is welfare?’ then we will never agree on what it is for and the system will struggle to cope with the demands placed on it.

There are two elements to welfare: universality, and targetted need. A clear distinction must be made between them so that they can be treated separately in order that confusion be avoided.

by Oranjepan on May 3, 2013 at 11:18 am. Reply #

[…] by the Lib Dems) of targeting welfare spending where it’s needed most. As I’ve argued before, we should be unashamed of putting forward the case for re-distribution as the foundation of not only a decent society, but also a prosperous one. Where once only Nick […]

by Ed Balls shifts Labour’s position closer to the Lib Dems: is this the start of a Lib-Lab realignment? on June 4, 2013 at 11:15 am. Reply #

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