The latest spat about free school meals is a reminder to me about everything that is wrong with our welfare state. These are not new problems they have been endemic since at least the 1950s but have been exacerbated by the current meanness and nastiness of the current government and the way they class large sections of our community as the undeserving poor.
For the record I would like to abolish free school meals altogether and family tax credits and housing credits and a whole range of means tested and grudgingly given handouts and give aways. They are discriminatory in nature and designed to make people do an ‘Oliver Twist’ and hold up their begging bowl and say, “Please Sir can I have some more?” They are also very expensive to administer and provide continued uncertainty to families on the margin of being able to provide for themselves as most people want to. This is a disincentive to move jobs or even move out of unemployment altogether.
The system of handouts also has other undesirable effects such as distorting the housing markets. The huge increases of housing benefit pay outs are caused by new landlords stepping in to provide what would be cheaper and better provided by social landlords such as housing associations or even better councils. They drive up prices and drive down quality. They create ghettoes instead of communities.
So, do I want to abolish support to people with no or low incomes? Not at all. I just believe that there is a better way which is efficient and deals with people anonymously, and takes away both the shame and shaming element of our current system.
This is not a new belief of mine. In the old Liberal Party, we used to call it ‘negative income tax’. Your base line was assessed on an annual basis, but could be changed more frequently, and you either paid tax via your employer or received tax credit from your employer. It’s a bit more complicated than that but basically introduced a payment system which included all the financial support needed in one review than through a series of top ups.
Every year I get informed by HMRC about what my tax code is and where tax will be taken from me. In fact, I’ve just got my final tax bill for the year 2019/2020. Our tax code system will need amendment but it can already recognise basic changes in employment levels etc and adjust instructions to employers to subtract tax accordingly with relative simplicity.
This basic principle, ‘one assessment’ principle was behind the concept of Universal Credit. However, that was introduced for the wrong reasons at a time of cuts in benefit. It is now so discredited that it is beyond redemption.
Instead the Liberal Democrats voted overwhelmingly for the concept of a Universal Income at our recent Annual Conference. It would sweep away most existing benefits and incorporate them into one basic calculation of what a family needed not only to survive but to live in reasonable but not opulent comfort. It provides stability for people either employees or people unemployed who want to move jobs or move into jobs. It properly transfers the control of a family’s income to the family and away from tick box civil servants.
People see two problems with this. The first is that the money may be misapplied. The selfish parent will spend it on sex, drugs, gambling and rock and roll. It is true that some money won’t be properly spent. There will be some families who won’t spend it on need but will fritter it away. I would suggest that this number would be a small percentage of the population. Unlike Tories I think that the vast majority of people are responsible with both their money and public money.
The second problem is that the Universal nature of this will not recognise the specific needs of some groups. I think of those with medical needs and our increasingly aged population. That is true but that is a relatively small element of our population whose needs are well documented and are already in constant contact with health or social care authorities so that informed decisions can be made by health or social workers as they are mostly done now.
How much will this cost? Well you could choose to do this at no additional cost at all. Work out how much we pay for these current benefits and the cost of running them and then redistribute the money through the new system with lower overheads.
To my mind that isn’t enough. I think existing benefits are too low and the base line for payments to no or low earners will need to be increased. This increase will be good for the economy. If it is paid for by increasing taxation on tax avoiding (i.e. legal) companies like Uber and Amazon and the payment of proper taxes by the wealthy with their off shore accounts, like the loathsome Jacob Rees-Mogg, there would be plenty to share round more fairly. Poorer people spend their money in the UK and often very local economy. Wealthy corporations and individuals spend their cash far away from the UK economy which provided the basis for it.
So, let’s use this opportunity of the question of school meals to avoid what is just a political point scoring fest between Lib Dems and Labour on one side and the Tories on the other and use it to start a proper nationwide debate about opportunity, fairness and equality.
It’s time to end the concept of the workhouse and begging bowl for good. The Lib Dems are up for this. Who’s coming with us.