Nick Clegg is talking in rather vague terms about stopping free bus passes, winter fuel allowances etc. to those who have no financial need of them. This is bound to cause controversy because of the pivotal notion of the universal right to benefits enshrined in the foundation of the welfare state.
To test this hypothesis we need to go back to the post war world of the mid to late nineteen forties. This was a peiod of radical Labour government, state ownership and social levelling. Taxation was much higher on income with even the basic rate at 37.5%. Top rates eventually reached over 90%. Universal entitlement seemed only fair under such a penal taxation discipline.
Now things are very different. Income tax is much lower at all levels and there is greater emphasis upon taxes collected at point of sale. It is also the case that our financial predicament stems, at least in part, from a past failure to raise enough tax to pay for all services and benefits the governments of the day offered and a current failure of the economy to generate sufficient activity to provide anything like enough cash to balance the books.
There is no reason why universal benefits should not, while being available to all, at the same time be available only to all those who need them. Such a concept does not undermine anything of value and we cannot any longer afford to finance dogma. However Nick’s proposal to deny benefits to people ‘worth over a million’ lacks any practicality and would cost more to administer than it would save.
What would make better sense would be to deny bus passes and fuel allowances to all those paying HRT and to reduce the state retirement pension pound for pound to those whose income post retirement age rises above £50,000 per year, so that before £60,000 it would have stopped altogether. It would also be reasonable to introduce small charges for GP visits, hospital clinics etc., to be paid only by those not eligible for free prescriptions. None of this would cause significant hardship and all of it would be applied through existing data and application systems. It would save a lot of money. Moreover it would escape from the old style woolly thinking of ‘people worth over a million’ and apply a new realism of a Liberal Democrat party versed in the practicalities of government. A party worth voting for after all.