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.

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Theresa May: No “half-in, half-out” Brexit

The Prime Minister is to call her vision an equal partnership. Critics call it a hard Brexit. 

The Prime Minister is to signal Britain is heading for a hard Brexit after declaring she will not seek "anything that leaves us half-in, half-out".

In a major speech, Theresa May is expected to demand an "equal partnership" with the EU on a model unlike any other in existence.

She is to say: “We seek a new and equal partnership – between an independent, self-governing, Global Britain and our friends and allies in the EU.

"Not partial membership of the European Union, associate membership of the European Union, or anything that leaves us half-in, half-out. We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave. 

"The United Kingdom is leaving the European Union. My job is to get the right deal for Britain as we do.” 

Advocates of soft Brexit had hoped that the UK might be able to negotiate a deal in which it maintained access to the single market in return for payment, and therefore offer businesses continuity.

Whether or not such a deal can take place depends on whether the UK and the EU find a trade off between controls on freedom of movement and access to the single market. 

But May is to hint that the first may be more important, saying that British voters chose to leave the EU "with their eyes open: accepting the road ahead will be uncertain at times". 

At the same time, the PM will attempt to play down the rift with Europe, and stress shared values instead.

Addressing Europe, she is expected to say: "The decision to leave the EU represents no desire to become more distant to you, our friends and neighbours."

Critics are already accusing May of prioritising immigration over the economy and security. 

Liberal Democrat Leader Tim Farron said: “You can call this Brexit clean, red, white and blue, or whatever you want.

"But this doesn’t disguise the fact that it will be a destructive, hard Brexit and the consequences will be felt by millions of people through higher prices, greater instability and rising fuel costs."

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.