Leader: In defence of universal benefits

The government presents its far-reaching changes to the welfare system as a fiscal necessity. Introducing the Welfare Benefits Uprating Bill in the House of Commons on 8 January, the Work and Pensions Secretary, Iain Duncan Smith, declared: “We don’t take this decision lightly, but we have to get this deficit under control or this country will be bankrupt like Greece and like Spain and we’ll have huge borrowing costs.”

Yet many of the measures the government has brought in, or is proposing to bring in, fail on their own terms. The changes to child benefit, which came into effect on 7 January and transformed an entitlement available to all into a means-tested benefit, disbursed according to need, are a case in point. Experience shows that the bureaucratic costs of administering means-tested benefits frequently far outweigh the hoped-for savings.

Then there are the anomalies in the government’s scheme which led one of its natural supporters, the free-market think tank the Institute of Economic Affairs, to describe it as “pro - bably the single most incompetent change to the benefits system since the Second World War”. Under the changes, families in which one parent earns more than £50,000 will lose part of their child benefit, while those with a joint income of £90,000 in which both parents earn £45,000 will keep theirs.

Mr Duncan Smith likes to invoke the shade of Sir William Beveridge when defending his reforms, but the cuts to child benefit run counter to the animating spirit of the postwar welfare settlement, in which contributions made in work created entitlement to benefits – entitlements that were an expression of equal citizenship and status. The very universal character of welfare state institutions was seen as an important vehicle of social solidarity and cohesion.

Today, the government sees things very differently. In its view, welfare services are to be aimed only at those in direst need. The problem with this, as the social theorist Richard Titmuss once argued, is that “services for the poor will always be poor services”.

This article first appeared in the 14 January 2013 issue of the New Statesman, Dinosaurs vs modernisers

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.