Child benefit, sofa government and the principle of universalism

Philip Hammond defended the decision to remove universal child benefit as showing that the Conservatives are the natural party of government. The basis for this questionable logic was that the Tories were happy to take tough, correct but unpopular decisions “in the national interest”. If Philip Hammond really does believe this, Paperback Rioter would like some of what he has been smoking.

All through the election Tories stressed that universality of benefit was an important principle that needed keeping. It was, er, Philip Hammond who said as much on Newsnight back in April. The principle reason given is the need to reduce the budget deficit, and we have said plenty on the government’s policies on that regard.

The decision to remove universal child benefit now, and the process by which it was announced, has many disturbing aspects.

The first is that the policy is obviously a back-of-an-envelope job. When one family where one person earns £44,000 does not receive child benefit, but a family where two people earning £43,000 does is blatently absurd. All this does not inspire confidence in the coalition’s other economic plans.

Second, it seems that the cabinet was not consulted about the decision. Theresa May was asked nine (!) times by Paxman, by my count, on what date she was told about these plans. She would only reply that changes to benefits were a matter for the DWP and the Treasury, and that she didn’t first hear about the plans on breakfast TV.

One must therefore concur with Peter Oborne’s inference that cabinet was not consulted about the plans on the Thursday before they were announced by the Chancellor at the Tory party conference.

This is the most disturbing revelation from the awful mess that the government made of this announcement. Much was made in opposition of David Cameron’s “sofa government” and the fact that he made decisions based on talking to a small group of key advisers. It would be hoped that coalition government would necessitate an end to such methods of making policy, but apparently not. The fact that cabinet is not being told of plans that are this important before announcing them is very depressing news indeed.

What is also depressing is that the left is finding it difficult to articulate a proper response in opposition to the policy. The line from Cameron and Osborne runs something like: “Why should those on lower incomes pay taxes to subsidise children of those far wealthier?” Which is a specious argument anyway, because that’s not how tax works. It’s called “general taxation” for a reason. Anyone would think that the tax money from those earning under £15,000 per year was being earmarked specifically to be given to the rich.

To properly understand why universalism is such a cornerstone of the welfare state, we must look to recent history. This is what Tony Judt’s Ill Fares The Land has to say about universalism. (I’ll be quoting from this book in future too, because it’s now my favourite book of all time. You must buy it and read it):

Moreover, it was with social democracy and the welfare state that bound the professional and commercial middle classes to liberal institutions in the wake of World War II. This was a matter of some consequence: it was the fear and disaffection of the middle class which had given rise to fascism. Bonding the middle classes back to the democracies was by far the most important task facing postwar politicians – and by no means an easy one.

In most cases it was achieved by the magic of “universalism”. Instead of having their benefits keyed to income – in which case well-paid professionals or thriving shopkeepers might have complained bitterly at being taxed for social services from which they did not derive much advantage – the educated “middling sort” were offered the same social assistance and public services as the working population and the poor: free education, cheap or free medical treatment, public pensions and unemployment insurance. As a consequence, now that so many of life’s necessities were covered by their taxes, the European middle class found itself by the 1960s with far greater disposable incomes than at any time since 1914.

This is why universalism was such a key principle of the welfare state, and it must remain a key principle of any welfare state. For the coalition to attack it, in such a bungled way, and meet so little resistance, is very worrying indeed.

This entry was posted in Economics, History, Politics and tagged , , , , . Bookmark the permalink.

2 Responses to Child benefit, sofa government and the principle of universalism

  1. Adam Lewitt says:

    Dear Cory

    Nice to see that you have started reading Tony Judt. An interesting thinker about pre-war Europe.

    I would ask that you provide a link to your Peter Oborne link, must be from the Daily Mail website, right? I would also ask for a blog response to the improvement in GDP figures, and a general response from Paperback Rioter if the economy improves throughout this parliament.

    • Hi Adam,

      Peter Oborne was interviewed on Newsnight the day after the child benefit announcement happened; that’s where I got the quote from. I will root around for a transcript, but don’t know if I’ll find one. (and doesn’t he write for the Telegraph now?)

      GDP figures: will see what I can do. I’ve said on twitter that I don’t think any party can claim credit for these figures: it’s too early to tell, and Labour claiming credit for the improvement is odd, to say the least. I can expand that view if you’d like?

      Certainly if the economy improves a response will have to be made. It could be that we were wrong all along, and should just become Thatcherites. On the other hand, what if the economy improves at the expense of great inequality, social mobility going down, etc? Again, we will have to wait and see.

      Ill Fares the Land is wonderful, I’m really looking forward to reading Postwar once the thesis is handed in!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s