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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Is there such a thing as responsible betting?

Punters are encouraged to bet responsibly. What a laugh that is. It’s like encouraging drunks to get drunk responsibly, to crash our cars responsibly, murder each other responsibly.

I try not to watch the commercials between matches, or the studio discussions, or anything really, before or after, except for the match itself. And yet there is one person I never manage to escape properly – Ray Winstone. His cracked face, his mesmerising voice, his endlessly repeated spiel follow me across the room as I escape for the lav, the kitchen, the drinks cupboard.

I’m not sure which betting company he is shouting about, there are just so many of them, offering incredible odds and supposedly free bets. In the past six years, since the laws changed, TV betting adverts have increased by 600 per cent, all offering amazingly simple ways to lose money with just one tap on a smartphone.

The one I hate is the ad for BetVictor. The man who has been fronting it, appearing at windows or on roofs, who I assume is Victor, is just so slimy and horrible.

Betting firms are the ultimate football parasites, second in wealth only to kit manufacturers. They have perfected the capitalist’s art of using OPM (Other People’s Money). They’re not directly involved in football – say, in training or managing – yet they make millions off the back of its popularity. Many of the firms are based offshore in Gibraltar.

Football betting is not new. In the Fifties, my job every week at five o’clock was to sit beside my father’s bed, where he lay paralysed with MS, and write down the football results as they were read out on Sports Report. I had not to breathe, make silly remarks or guess the score. By the inflection in the announcer’s voice you could tell if it was an away win.

Earlier in the week I had filled in his Treble Chance on the Littlewoods pools. The “treble” part was because you had three chances: three points if the game you picked was a score draw, two for a goalless draw and one point for a home or away win. You chose eight games and had to reach 24 points, or as near as possible, then you were in the money.

“Not a damn sausage,” my father would say every week, once I’d marked and handed him back his predictions. He never did win a sausage.

Football pools began in the 1920s, the main ones being Littlewoods and Vernons, both based in Liverpool. They gave employment to thousands of bright young women who checked the results and sang in company choirs in their spare time. Each firm spent millions on advertising. In 1935, Littlewoods flew an aeroplane over London with a banner saying: Littlewoods Above All!

Postwar, they blossomed again, taking in £50m a year. The nation stopped at five on a Saturday to hear the scores, whether they were interested in football or not, hoping to get rich. BBC Sports Report began in 1948 with John Webster reading the results. James Alexander Gordon took over in 1974 – a voice soon familiar throughout the land.

These past few decades, football pools have been left behind, old-fashioned, low-tech, replaced by online betting using smartphones. The betting industry has totally rebooted itself. You can bet while the match is still on, trying to predict who will get the next goal, the next corner, the next throw-in. I made the last one up, but in theory you can bet instantly, on anything, at any time.

The soft sell is interesting. With the old football pools, we knew it was a remote flutter, hoping to make some money. Today the ads imply that betting on football somehow enhances the experience, adds to the enjoyment, involves you in the game itself, hence they show lads all together, drinking and laughing and putting on bets.

At the same time, punters are encouraged to do it responsibly. What a laugh that is. It’s like encouraging drunks to get drunk responsibly, to crash our cars responsibly, murder each other responsibly. Responsibly and respect are now two of the most meaningless words in the football language. People have been gambling, in some form, since the beginning, watching two raindrops drip down inside the cave, lying around in Roman bathhouses playing games. All they’ve done is to change the technology. You have to respect that.

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war