|
This
is a series of essays, from a variety of think-tanks, which respond
to the issues raised in the Joseph Rowntree Foundation's Tackling
Disadvantage: A 20-year enterprise (2003: see our issue 2 for
2003 for a review).
In
his introduction, Nicholas Timmins suggests that there is now
a consensus across the political spectrum: that poverty and social
disadvantage need to be tackled; and he recognises that there
is a limit to what current (means-testing) policies can achieve.
He writes:
"Labour,
having been in the past an arch-opponent of means testing, has
in practice achieved much of its redistribution in office by using
it. There has been a genuine attempt to tackle the complications
and stigma of claiming means-tested benefits, not least through
the creation and language of tax credits. Yet the critics, some
of whose voices can be heard in these essays, are unconvinced,
insisting that the price has been unacceptable complexity. And
in the case of pensions, there are certainly strong arguments
that the Pension Credit, while a clear gain for today's poorer
pensioners, has made decisions about saving far harder for today's
lower income workers. Add to that the recent falls in stock-markets,
greater longevity and the underfunding of pension schemes and
there is a feeling that Britain's pension system is at a crossroads.
Travelling further down the means-tested road is likely to lead
to greater compulsion to save. The alternative route would be
for the basic state pension to be rebuilt and turned into something
closer to a participation, or even a 'citizenship', pension"
(pp.18f).
For the institute for Public Policy Research, Sue Regan and Peter
Robinson suggest that simply increasing the levels of tax credits
and of the minimum wage is not enough, that "a positive conceptualisation
of rights and responsibilities is needed to replace the muddy
waters left by the demise of the contributory principle"
(p.31), that simplification of the benefits system is essential
(p.32), and that means-testing must be reduced (p.33).
Roger Wicks, of the Social Market Foundation, shows that both
means-testing (in the form of tax credits) and universal provision
(Child Benefit) have increased in value for poorer families, with
the results that income has been redistributed and that the National
Insurance system has suffered. He recognises that the Labour government
has reduced the stigma related to means-tested benefits by making
80% of families eligible for them in the form of tax credits;
but he also recognises the disincentive effects of benefits being
withdrawn at the same time as tax and National Insurance contributions
are paid. A housing tax credit is suggested - and the problem
of its complexity recognised. A universal (rather than means-tested)
asset-based welfare system is recommended (p.55).
Nicholas
Hillman of Policy Exchange begins his essay with a discussion
of increasing inequality, and he too describes the complexity
of tax credit administration (p.69). He continues:
"The
irony about the government's reforms is that the two groups
most affected by the enormous extension of means testing - children
and pensioners - were already targeted by successful, popular
and universal benefits. Despite the declining importance of
these benefits in recent years, it is likely that they continue
to offer a better long-term model than excessively complicated
means tests that cover huge swathes of people" (p.70).
In
relation to today's complex pensions structure, he suggests that
"instead
of searching for entirely new solutions, we should seek ……
to build on the existing consensus in favour of more generous
state provision, less mans testing and greater incentives to
save" (p.72),
and
he goes on to discuss the Pensions Policy Institute's study of
a universal state pension. An overall conclusion is that poverty
needs to be tackled by increasing employment incentives.
Jim
McCormick's contribution from Scotland rehearses in a Scottish
context some of the debates explored earlier in the volume (for
instance, that on the tension between targeting and universalism);
and John Osmund and Jessica Mugaseth, writing in Wales, discuss
a variety of issues related to poverty - but neither the Welsh
nor the Scottish contributions give to the structure of tax and
benefits the attention which it deserves, partly no doubt because
neither the Scottish Parliament nor the Welsh Assembly have any
control over these matters. It would be interesting to see what
would happen if they were given these powers. Would we see a variety
of different approaches in different parts of the UK ? And would
we therefore be more able to study the pros and cons of different
systems and be better able to improve the system in all parts
of the UK ?
There
is bound to be repetition in a collection of essays, and reviewers
often pass negative comment on its presence. In this volume the
repetition is instructive, and particularly the frequent verdict,
from different parts of the political spectrum, that means-tested
benefits are bad for incentives and that their complexity is a
serious problem.
Order
Today! |
