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Blogs Coffee House

The one thing worse than universal benefits? Means-testing them.

25 September 2012

3:00 PM

25 September 2012

3:00 PM

There’s nothing, but nothing, easier than for politicians to sound off about universal benefits, and sure enough, Nick Clegg was complaining on the World at One today about the iniquity of, as he says, paying for Alan Sugar’s bus pass. He was being asked about the sustainability of universal benefits and perks following Don Foster, one of his MPs, grumbling about it being absurd that someone like him is entitled to a winter fuel allowance. Mr Clegg went on to make clear that as part of the coalition deal for this parliament there wouldn’t actually be any fiddling with things like the fuel payment for oldies, but after that, these universal perks would be up for grabs.

George Osborne of course got there first when he removed child benefit from higher-rate taxpayers, and much good it did him. I can think of one thing worse than paying Alan Sugar’s bus pass myself, or even Don Foster’s fuel allowance, and that’s paying an entire stratum of Whitehall bureaucrats to administer mean-tested benefits. A Treasury civil servant once told me that the expense of administering a means tested benefit like child tax credit amounted to about 11 per cent of the overall cost. I once received child tax credit myself and I tried, briefly, to keep all the paperwork I was sent, just for interest, but I lost heart after it took up more than a box file in a few months. There was any amount of literature, some of it telling me I needed to do nothing, and all of it in duplicate for my husband, despite it being obvious that we were a married couple at a single address. Child benefit, by comparison, creates next to no paperwork for recipients that I’m aware of.

Let’s get something clear. The reason it isn’t a problem that duchesses get an old age pension like their cleaners is that they, I hope, are paying top levels of tax; they are, in short, paying for their pensions many times over. Universal benefits – formerly child benefit, and old age pensions still – have the unsurpassed merits of being clear, comprehensible, devoid of stigma, with near universal takeup rates and relatively cheap to administer. And if Alan Sugar doesn’t want his bus pass and Don Foster is affronted by his fuel allowance, there is, you know, an easy remedy. Don’t take them up.

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