Who should feel the benefit

The current harsh economic reality looks set to continue well into 2010. While politicians talk of difficult times, and the need for tough decisions, Ruth Patrick poses some tough questions about universal benefits

The best example of universal welfare is the popular Child Benefit: all those with a child receive it, regardless of income. Other universal benefits include the free bus pass, and the system of Winter Fuel Payments (WFPs) for all over 60. Whether a multi-millionaire with a chauffeur-driven Rolls, or a pensioner surviving, just, on a state pension, all are entitled to these universal provisions.

Increasingly, politicians are asking whether such benefits are sustainable in today’s tough economic climate. Might it be better, many ask, to target benefits on those who need them most, saving precious government funds and ensuring that help is not squandered on the wealthy? The public may be open to persuasion: a recent Daily Mail survey found that 38 per cent of those questioned believe Child Benefit should become means-tested.

Those who favour means-testing suggest that money saved from withdrawing benefits from the middle-classes could be used to target help at those most in need. So, for example, a means-tested Child Benefit could deliver higher levels of benefits to the poor, and thus make a greater contribution to the effort to end child poverty. Similarly, many disabled people have long questioned the fairness of Winter Fuel Payments being paid to all elderly people as a right, and yet not extended to disabled people with mobility-related impairments. A means-tested WFP could make such changes to provision affordable.

On the downside, however, means-tested benefits are notorious for their bureaucratic complexity, the possibility of administrative error, and headache-inducing confusions over eligibility. Whilst all parents know they are eligible for Child Benefit, many have far less idea about the myriad of tax credits and other benefits to which they may or may not be entitled.

More fundamentally, universal benefits encourage a sense of solidarity and unity: we all have a stake in welfare whilst we all receive it. Welfare targeted at the poor too easily becomes poor welfare, as those most in need frequently do not have the campaigning resources to demand the best possible provision.

Further, there is a dangerous stigma attached to means-tested benefit receipt, and this could increase if universal forms of welfare are removed. At worst, there could be a return to poor-law type thinking, where welfare is reserved for those at the bottom of society, who become stigmatised and excluded.

Although these debates may seem dry and abstract, their outcome could have a significant impact on our society. Thus, it is really important to engage with these discussions and consider where we, as individuals, stand on the thorny question of universal welfare’s place in 21st Century Britain.