On the day that the Tory-LibDem Alliance have passed a bill that paves the way for the marketisation of health, I think it’s important to reflect on why universal benefits are so important if we want to see solidarity among our citizens and between generations. More than two years ago, I was invited by Jean Lambert, MEP, to give a speech to the Green Party on this subject, and a Twitter exchange with @sipphound this evening reminded me of it. Here is the text of the speech, prepared long before this evening’s loss of the great post-War health settlement that created the NHS was imagined. If you want to see an excerpt on video (when my hair was a lot shorter!), you can click through here. Otherwise, here it is. Now more than ever we need to remember why universal benefits are important.
Speech to the Green Party Conference, Saturday 5th September 2009
Debora Price, Institute of Gerontology, King’s College London
Thank you very much and I really am very pleased to be on a platform here discussing social policy for older people. I would like to use my time to explore the question, what sort of society do we want? And to look at what the role of means testing, which pervades much older people’s policy, might be in building or failing to build that society. That is, to step back from the detail, of the implementation of social policies, and ask, what is the political and social ideology that drives us to deliver policy in this way, especially for older people, and what are the consequences of that.
In the arena of pensions, we have grappled with the problem of means testing for a long time. There are two issues generally agreed as problematic. The first is that it is a well known phenomenon that many of those entitled to benefits do not claim them. In the UK 30% – 40% of people do not claim the pension credit to which they are entitled, and other benefits such as council tax and housing benefit also suffer around 35% and 15% non-take-up. As a result, between 1 and 2 million pensioners are at very high risk of or do live in conditions of quite severe poverty, and we see knock on effects in health issues such as malnutrition, winter deaths from cold, social exclusion and depression. The very many operational problems with means tested systems have been extensively researched and are well known. For older people they include issues of frailty and mobility, and difficult media used for communication, but also the fear of losing independence or that a claim will be seen as a sign of not coping, as well as the more often quoted issues of complexity and stigma. For these reasons there is powerful evidence that means testing can never deliver the intended benefits, and indeed the Pension Service has pretty much said that it is no longer cost-effective for them to try to improve take-up rates.
The second major problem that is usually identified with means tested systems it the moral hazard that if people know they will only get a benefit if they have no savings, then you create an incentive for them not to save, and then you end up with lots of poor people and have no option but to maintain the means tested system.
But I think if we step back from these operational problems, which in theory at least could be solved by operational solutions, there is a prior question to be asked. Why do we create means tested systems in the first place, and what do they say about us? Historians of the Welfare State trace the British commitment to means testing to the Elizabethan Poor Laws and the Victorian workhouses, and to harsh notions of the deserving and the undeserving poor. In this conceptualisation, benefits to poor people had to be low, lest you encouraged people onto the welfare state. And systems today that are means tested have this element of residual benefit, the minimum benefit, because it is a kind of charitable donation by the rich being taxed and given to the poor, and the State’s role therefore being no more than to rescue people from complete indigence.
Cast in this role, the State can never provide a good or adequate service. In general terms, the people who are paying for the system through taxation are not the same people as are benefiting from the system through means testing. The taxpayers have political power, many will have no sympathy with the whole notion, or will feel that, as the payers, they have the right to dictate the terms and conditions of receipt. Not only is a divided society constructed, but one where improvement in the benefit and in the quality of service is impossible or nigh impossible to achieve.
Universal benefits, on the other hand, benefit everyone, including the taxpayers and their families, and their future selves, and the whole of society has a stake in the quality, outcomes and levels of benefit.
The free bus system for older people is a universal benefit. It too has its problems, as it does not address the transport problems of rural older people, nor the frail or many disabled. But its universalism across social and economic classes has been a unifying force for good, and estimates are that it has been used by two thirds of the pensioner population. Yet at the first hint of operational problems, the Local Government Association produced what I suspect will prove an influential report from Oxera, Consulting Economists, which as many of you will know, has advocated means testing this benefit. The societal divisiveness of means testing is exemplified in this quote from the report:
“Better targeting could generate savings which could be made available to local authorities to ensure support for lower cost travel for the scheme’s intended beneficiaries...”
Here we see that in the eyes of some of the more powerful people in our society, we are not trying to benefit all of our citizens, but a select few, who we deem eligible for our charity.
This debate about means testing is taking central stage in the current vital consultation on the future of long term care. A taxpayer funded universal social care system has been ruled out by government despite recent research showing that this is what the public want. It has been ruled out because the government says it is too expensive and taxpayers will not pay for it. In one sense, this is nonsense. People will have to pay for it. The question is whether they pay individually, or we as a society pay collectively, offering some collective insurance against risk. If we end up with a means tested system, we will once more create divisions in society between rich and poor that inevitably mean that the social care system created will always be pressurised, suffer cuts and provide a residual service, since those who pay the taxes that fund such a system are less likely to see personal benefits for themselves and their families.
In my last minute or so, I would like to broaden this debate out to our global world. The issue of what kind of state systems and welfare states we build is a global one, and global ageing is at the centre of these questions. Almost all of the ageing in the world is now taking place in the global South; by 2040, 76% of the World’s over 65s will be in developing countries. It took France’s older population over 100 years to double from 7% of the population to 14%. It will take South Korea just 18 years to do the same. The rapid ageing of populations across the globe is unprecedented, and whereas aging in the wealthy nations has taken place in the last hundred years generally in conditions of developed nation states, prosperity and democracy, population ageing in the South will take place in the context of poverty, climate change, HIV/AIDs and in many instances war and political instability. Many countries are in the infancy of imagining their welfare states, and the issue of universal versus means tested delivery is one of the ideological tensions that will be at the heart of their construction.