How do we know this? The new Labour government have told us in not so many words. From the beginning, Reeves said stopping the payments would be mitigated by a campaign to get more eligible pensioners on to pension credits. My friend Pete Nicholls has roughly calculated that the take up of pension credits by an extra 800,000 eligible pensioners would cost over £2bn - wiping out the £1.2bn it would contribute to closing the famous £22bn black hole. Regardless of what one thinks of Reeves, Starmer, and the rest, they are not stupid people. They know this is the case, which ineluctably points away from fiscal prudence towards a different objective: universal provision.
In this respect, Reeves truly is the heir to Blair. Universalism is not "progressive". It costs a bomb and is "inefficient" because people who don't need it get it. I'm sure His Blairness would have performatively disavowed his Winter Fuel Payment, if the government was in a bit of a spot and they asked him. But this is ideology masking interests. Since the battles successfully waged by Thatcher in the 1980s, her aim of stripping back the welfare state and public services to the barest minimum has largely succeeded. Residualism is the common sense. This was a strategy in her class war to permanently tip the scales away from labour to capital. I.e. Clawing back benefits, introducing conditionalities, holding them down at barely subsistence levels, was an effort to centre the wage as the primary, if not the only means of income for millions of people - giving capital the whip hand. In Thatcher's scheme, it sped up labour "flexibility". By cutting social security, she made sure any job was better than no job, even if the pay was poor and the conditions abysmal.
This contrasts with how the architects of thw welfare state saw things. Whether one was Labourist, one nation Tory, or Liberal, it represented a social wage. Universal social security provided a floor designed to catch anyone who fell on hard times. Welfare was never a luxury, despite how the unchanging propaganda of the last 45 years styles it, nor was it a product of high-minded enlightenment by clever, compassionate politicians. It was a gain extracted from capital by labour as the cost of avoiding social unrest and certain kinds of events. The fact of universalism gave other layers in society a stake in the social security system. Better off families might not have needed child benefit, for example, but it gave them extra spending power they could splash on extra clothes, treats for the children (and treats for themselves). But by extending them a stake, it was hoped opposition to their losing an entitlement would protect those who really needed it - families crippled by low wages and debt, mums financially controlled by abusive husbands, and so on. And as imperfect as it was, universalism was a bureaucratic expression of solidarity. Universalism, as a product of heightened class struggle when our people were politically ascendant, went into retreat as the tides of battle flowed in the bosses' favour. As class consciousness eroded it was easy to characterise universal entitlements as largesse/symptoms of administrative inefficiency, and the axe fell on them in due course. Unsurprising that getting shot of Winter Fuel Payments, ironically introduced under the otherwise anti-universalist Gordon Brown, fits the Starmer project like a hand in a glove.
As we noted the other day, this was not a "tough choice" for the government. But one, from the standpoint of Starmer's statecraft, a politically necessary one. Universalism raises the idea of everyone getting something, of building on collective aspirations that lie outside the class alliances and type of capitalism the Labour right want to build. This is a capitalism that offers steady, stable growth, is run by Treasury-brained technocrats like Reeves, has a re-legitimated state that works, a pacified work force interested in consumer durables and coffee shops, and returns a semi-permanent government of centrist sensibles at election time. There is no room for alternative ways of doing things. Hence universalism is anathema not just to the nuts and bolts of this dismal project, but to their very conception of politics.
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Reeves: "I would prefer the poorest pensioners to get the support that they’re entitled to. I would rather pay money to the poorest pensioners than to continue with a universal winter fuel payment, which meant that some people who didn’t need the money, were getting it and weren’t using it to pay their energy bills." [source: Guardian Politics Liveblog]
"This is a capitalism that offers steady, stable growth..." I think this is delusional on the part of the deepstate/Establishment: Britain is a collapsing post-industrial state. It has to import energy and food. That will result, not in growth, but contraction of the real economy, bringing with it unrest. Starmer and Reeves are fools if they believe this.
One small quibble: The Winter Fuel Allowance is not a universal benefit because the need for heating does not arise solely when you turn 65 (or whenever). The rationale that only pensioners should get it presumes that those working (or on unemployment or other benefits) can cover the cost, which is obviously dubious.
The "otherwise anti-unversalist" Gordon Brown may have rationalised it as alleviating pensioner poverty, but in practice it was a highly-targeted bribe for a specific electoral cohort. The decision to "reform" it now is probably just as informed by electoral considerations as it was then, and so too is the tearful opposition to it within the PLP.
Ah, so a pre-emptive strike against UBI, then?
How very predictable (and much belated, although of course this particular move only became possible once the "good cop" was back in charge)...
Nice to see that they feel on the back foot about it, much less pleasant to see these signals of how bitterly that they are going to fight it. Or - to take the most charitable available reading - how bitterly that "the markets" are understood to EXPECT them to fight it.
This is a good point. (In reply to David Timoney)
“This is a capitalism that offers steady, stable growth, is run by Treasury-brained technocrats like Reeves, has a re-legitimated state that works, a pacified work force interested in consumer durables and coffee shops, and returns a semi-permanent government of centrist sensibles at election time.”
Yep, in a nutshell: a return to the post-war, corporatist consensus.
Let's out another elephant in this room: conditionality is easily wielded as a weapon. This is something which high-class social parasites (the presumed executive function of "the markets") seem to understand very well, regardless of whether or not that relatively honest technocrats do.
You only need to look at the treatment of disabled welfare dependents over the last 20 years (condemned by the UN, no less, at least three times) to see how that game works. You can claim to have a social safety net; while in fact it has been subtly subverted to function as a Kafkaesque/Machiavellian, grossly inefficient (and cruel), but critically above all deniable chequebook euthanasia program. Aktion T4, reinvented by cowards who learned from what happened to the architects of the original. (Notably, an upward gear change in this exact program was one of the headline offerings with which dearly-departed Rishi attempted to rescue his ship. He thought it was a vote winner. I haven't heard yet whether or not it looks like his successors are going to more quietly continue with it.)
DWP has been trying for 20+years to increase take up of Pension Credit without success. No reaon to believe it will do so now, However, it gives Reeves et al a useful rhetorical cover for their action - ' if only the poorest pensioners would apply all would be well. I weep real tears for them as I am so compassionate but its not my fault they wont claim.'
Will she maintain the logic that if people don't need the money they should not get it - she can reel in the bankers' bonuses, the excess profits of utilities.
Whilst Phil's article is well argued , and I agree with it, I have to question the relative priority of this issue in the ranking of current threats to UK pensioners like myself (and everyone else in the UK).
Yesterday Foreign Secretary David Lammy (accompanying his hegemon master , Anthony Blinken, ) to Kyiv, agreed , according to The Guardian and other media reports, to allow, and directly assist with targeting, using UK military technical personnel , the Ukraine regime to launch UK Storm Shadow missiles indiscriminately deep into Russia on targets of their choice. These missiles can carry both single warheads and cluster munitions , so indiscriminate attacks on citizens in Moscow or St Petersburg, or Russian Nuclear power stations, or strategic targets , directly assisted by the UK military are imminent.
The Russians have clearly warned that if/when this happens they reserve the right to attack with their unstoppable hypersonic missiles, targets in the UK and UK facilities elsewhere. The UK government is dancing madly on the edge of a volcano here in endlessly 'poking the Bear' . We are closer to nuclear war now than during the Cuban Missile crisis - yet the UK 'Left' couldn't care less apparently ! Very strange.
You could say the same about the state pension, Mr Timoney. But, since everyone starts off as a child, and if they live long enough, ends up as a pensioner, then it is universal in the sense that everyone would get it should they reach whatever pension age becomes. You could argue that free education isn't universal since most of us aren't at school, but... and so on. The universality is relative not absolute. Everyone over 65(ish) is a cohort, just as everyone between 6 and 18 is. If we only consider a benefit or service universal if literally everybody of all ages gets it, then there are none. Not even health treatment because you only get that if you are unhealthy.
I would add that WFA should not be necessary as the pension ought to be set to ensure that OAPs can afford to heat their houses in...winter (i.e. when they need heating). As should other benefits.
Theoretically means-tested benefits make sense. Why give money to people who don't need it? But there are at least three big problems with means-testing.
The first is that such benefits are much more vulnerable to cuts (or to not being uprated enough). This is mainly because the people who have most influence, and those who control the media and fund the political parties, by definition won't get these benefits, so have no 'skin in the game'. To them its a cost, plain and simple. So they have no incentive to support it and may even be motivated to attack it.
Second, the nature of means testing means that the process of applying and receiving these benefits is bureaucratic and complex, and requires providing a lot of information and personal detail, and by its nature there will be trigger points where a pound one way or the other will make the difference between getting something, and not. There's a reason that an estimated 800k people eligible for pension credit do not claim it. Because they don't know how, or its too difficult, or they fear the process and the intrusion, or they resent having to ask for help and prefer to suffer in silence. As more stuff is online, or via the phone, access can become a problem for some.
The third issue is more subtle; means tested benefits are likely to intersect with tax thresholds, and other credits or deductions, and non-financial offers (such as home care or disability aids etc) which depend on the particular circumstances of the person and/or household. But they rarely meet smoothly, so the result is that people end up effective paying marginal rates of tax much higher than they should, as the benefit is phased out, or just cuts off, at a different point than the tax, or vice versa, or losing access to something as their income tops a limit. The consequence of this is that there are grey zones where benefits may actually penalise people compared to a neighbour on broadly similar income. So there is a perceived element of unfairness which turns people against the system, and sometimes against those they believe are doing 'well' out of it.
Although intuitively means testing seems like a more efficient way to do it, there is evidence that universal benefits, without the admin overload, bureaucracy, thresholds, exclusions and need to 'claim' work out more effective and positive for society. Of course, the real question we should be asking is why is a winter fuel allowance necessary for anyone? But that is something that most politicians prefer to skate over.
Anon, those Kinzhals - which they don't have many of - are not unstoppable. Patriots have done unexpectedly well against them in Ukraine. So much so, that there has been a spate of Russian scientists who happened to be doing work on hypersonic dynamics suddenly being bundled into the penal system on flimsy pretenses... A grotesque, sub-Stalinist spectacle which makes their state apparat resemble a headless chicken covered in razor blades.
The desperate situation in Ukraine (and Russia) notwithstanding, I do wonder why you would raise that issue in such an odd context. It sort of appears that you're urgently advocating throwing Ukraine under the bus, to spare Putin's blushes, lest he decide to lash out against us with his terrifying super weapons. But this discussion is about the politics behind Starmer's WFA stunt. Why would you want to shout your (rather dubious) suggestion over the actual topic of the article?
@Aimit Palemglad
Age conditionality for benefits (the state pension, child benefit etc) is premised on changing needs over a lifetime: that children cannot fend for themselves and that the old should noy be expected to work themselves to death.
The point about the WFA is that high fuel costs are not specific to an age cohort. There are plenty of people who cannot afford to put the heating on in winter who are much younger than 65. As such, the benefit is clearly not geared to need.
This makes it categorically different to other benefits, which is why I suggested it would better be described as an electoral bribe.
In fact... Given Putin's chosen wording, in terms of retaliation by providing Russian long range weapons to people that hate us, it would appear that Israel - which, unlike the UK, has active hostile neighbours on its borders - has rather more to fear from those weapons than UK pensioners do.
Leaving aside the question of whether or not Russia can spare any weapons at all from its gruelling attempt to pummel Ukraine into submission, it feels as though Putin may have chosen those words in hope of recruiting the Israel lobby to undermine Western support for Ukraine.
So, the very first choice of “saving” , is £1.5b out of a budget of £1,000m, assuming that a big tranche of pensioners do not now decide to apply for pension credits. So retarded that it must be a political signal. Unfortunately for Starmer, millions of voters will get the message as well. One small point is, if it was supposed to be “efficient” why wasn’t it just taxed, as HMRC should be capable of achieving this.
On a wider point about universal benefits, if everyone gets, for example, child benefits, there is less opposition from the better off because they benefit as well, as do all mothers if it is paid solely to the mother.
They're related issues - remember that it was announced that we would be giving £3 billion a year to Ukraine 'for as long as it takes'. Why can the money be found for war, but not to make sure our own people don't freeze?
The Beveridge Report is often remembered rather selectively these days. It was always a safety net, not a cushion. Today's average pensioner takes far more out of the system than they ever put in regardless of bollocks about 'paying their stamp', that wasn't what the system was intended for. nor was intended to subsidise people who for whatever reason wanted more children than they could pay for themselves, nor was it intended to cover an ever larger proportion of economically inactive population.
If we're talking about honesty, there's nothing stopping a political party coming up with a programme to explicitly subsidise large chunks of the population (rather than provide a safety net), the challenge is selling it to the people who have to pay for it. But once you start to demystify some of these things it will lead to other awkward questions.
@Welsh Ian What evidence is there to suggest that money saved from not going to war would be spent on preventing anyone freezing?
If you want to be anti war, make the argument against war. If you don't want people to freeze, make the argument against letting people freeze. But do it separately. Don't read from the sophists' book of dirty tricks, and try to conflate them in order to play one off against the other. It's far too obvious - and sounds far too much like the transparently dishonest "look after our own first" argument beloved of racist xenophobes.
If we're talking about honesty (and indeed awkward questions), I wonder what exactly Kamo thinks is the difference between "providing a safety net" and "subsidising a large chunk of economically inactive population".
If something happens which causes a large chunk of population to become economically inactive against their will, then is there a safety net, or is there not?
I hazard a guess that Kamo finds the key difference in the phrase "against their will". And further thinks that it should be his job to decide whether or not their economic inactivity is actually against their will. A job for which he, uniquely, is fully qualified, and will perform with complete impartiality. Or perhaps one for which he is quite unqualified and unsuitable - but thinks that his imagined status, as the one solely paying for the selective "safety net", gives him the right to do anyway.
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