Means-testing pensioners is wrong, but not for the reason the right hates it

It's the old "universal benefits" chestnut again.

The Conservative MP Nick Boles has riled up the Right by suggesting that the free bus-passes and prescriptions currently awarded to all pensioners ought to be means-tested.

The Telegraph's Ian Cowie speaks for many:

No wonder many people who are sceptical about politicians’ promises regard NICs as the biggest Ponzi scheme ever. Payments made by workers this week are used to fund next weeks’ benefits payments, instead of being invested for the future.

No private sector scheme would be allowed to operate in this way – indeed, as pointed out in this space from time to time, it would be a criminal offence to do so. But a series of governments from all major parties have done just that for decades, with calamitous consequences as baby boomers – a bulge in the population that began after the last World War – reach retirement.

Two common arguments come out in this: the fact that benefits for the elderly amount to a "ponzi scheme", and that any changes to them represent "broken promises".

The first is self-evidently false. National insurance contributions pay for:

Contribution-based Jobseeker’s Allowance, Incapacity Benefit, contributory Employment and Support Allowance, Bereavement Benefits, State Retirement Pension and Maternity Allowance.

Absent from the list is "bus passes" and "prescriptions". These are paid for from general taxation, and there has never been any hint that those paying into the system now are paying for their own bus passes in the future.

Even state pensions have never been sold as a savings replacement. Although the contribution requirement makes it seem analogous to saving, it has always been paid out of that years income. When it was introduced, on January 1 1909, it had no contribution requirement at all, and although that has gradually risen to the 30 years now mandated, it remains at best a popular misconception that the government is supposed to be saving contributions to pay for future pensions. 

It may be fiscally prudent to pay for pensions from savings rather than income, but that is frankly a concern which should be taken up with Herbert Henry Asquith and those dastardly Liberals.

As for "broken promises", that is obviously the case; people have planned their lives around receiving one set of benefits, and now may not get them. But pensioners have no special claim to that argument. Just as many promises were broken to this year's school-leavers, who spent most of their childhood and early teens expecting to receive subsidised education through to the end of university, and now will not.

But if he's wrong in substance, Cowie is right in conclusion. The two benefits Boles focuses on are comparatively cheap; bus passes cost £1bn a year, with the Independent calculating that the total cost of all measures under discussion is £5bn, compared to £137bn for state pensions. Means-testing, meanwhile, is expensive, "sometimes amounting to more than the savings" according to Peter Beresford, professor of social policy at Brunel University. And that cost doesn't even take into account the fact that many of the administrative costs are shoved onto the claimant; if you have to spend an hour filling out a form, that's a real cost of the policy, but it doesn't show up on any government accounts.

As well as the economic points, there are the political. Universal benefits help remove the stigma of claiming support from the government; they shore up support for the welfare state; and they ensure that those who need help get it.

There may very well be arguments for doing away with some of these benefits entirely,  and if there are, we should hear them (for instance, the cost of bus passes would be better spent as an increase to the state pension, allowing pensioners to choose what they spend it on). But saving a pittance by restricting them only to the poorest in society won't help anyone.

25th September 1973: An old lady sitting in her kitchen, waiting to be evicted from her flat in a crumbling tenement block. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.