3 thoughts on “The fiscal illusion: is this why Owen Jones defends benefits for wealthy pensioners?”

  1. Posted 07/05/2013 at 11:54 | Permalink

    Indeed – but this is a long-standing doctrine of the welfare state, made perfectly explicit by the Beveridge Report, its foundational work. The Report argued that the welfare state must be universal, in order that it receive the support of all groups in society. This is true in most cases – education, healthcare etc. This does indeed explain why people like Owen Jones are so strongly resistant to any changes to these benefits which threaten their universality, as they also perceive that people are far less happy to pay for something which they do not receive (witness greater hostility to unemployment benefit, say, than to the NHS). In my view, the best way to dismantle the welfare state from the point of view of political strategy would be to gradually deny its benefits to ‘the rich’ – those on a certain household income would be denied ‘free’ healthcare and education but it would not be denied to those on lower incomes.

  2. Posted 07/05/2013 at 12:45 | Permalink

    While there are strong political-economy arguments for scrapping universal benefits, there are enormous problems associated with means-testing – in particular the negative effect it has on incentives to work and save. If universal benefits are ended, it’s important that other benefit rates are adjusted to limit the harmful impact of extending means-testing.

  3. Posted 07/05/2013 at 14:00 | Permalink

    Richard – I agree, which is one of the many arguments that are used against doing so. But these problems could be overcome by a reforming government of real courage and with clarity of vision. Some chance!!
    Ultimately, however, these issues demonstrate why there should not be a welfare state at any level of income, but the vast apparatus can only be rolled back – if at all – by gradual changes.

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