If winter fuel payments should be universal, why shouldn’t housing benefit?


2:20 pm - June 3rd 2013

by Don Paskini    


      Share on Tumblr

I’ve got no problem with Labour’s plans to means test the Winter Fuel Allowance – it strikes me as a perfectly sensible thing to stop spending £100 million on payments to higher earners which many people value so little that they choose to donate to charity. I think it is vital that the welfare state has a mix of targeted and universal services, and that at times it makes sense to review and make some (such as winter fuel payments) targeted, while extending others (such as childcare) to be universal. Language of priorities and all that.

That said, I’ve read the eloquent arguments from Peter Hain, Owen Jones and others about the evils of means testing. They argue that means testing involves more bureaucracy, misses out lots of needy people, undermines social solidarity and hurts those who are neither rich nor very poor. If this is a principle which applies to the winter fuel allowance, then logically it is one which should apply to the rest of the social security system.

The biggest means tested benefit is housing benefit. Every part of the universalist critique applies to this benefit. The housing benefit assessment system is very bureaucratic. There are lots of needy people who currently suffer with high housing costs, but who are not eligible for housing benefit. The fact that some people get very high housing benefit payments while others pay in and get nothing is definitely a source of resentment which undermines social solidarity (far more so than winter fuel payments).

Yet I have never ever heard any leftie argue that the existence of means tested housing benefit undermines the welfare state, and never seen anyone call for it to be made universal.

I don’t think this is just a matter of pragmatism, focusing on the immediate battles and defending what we have, leaving the longer term goals of a universal housing benefit for another day. I think it is a recognition that different types of problems require different approaches, and that universality is not, ahem, a universal principle for the welfare state.

    Share on Tumblr   submit to reddit  


About the author
Don Paskini is deputy-editor of LC. He also blogs at donpaskini. He is on twitter as @donpaskini
· Other posts by


Story Filed Under: Blog ,Equality ,Labour party

Sorry, the comment form is closed at this time.


Reader comments


Yet I have never ever heard any leftie argue that the existence of means tested housing benefit undermines the welfare state,

Nor should you, the argument is that by making a benefit means-tested ultimately leads to making it a piece of piss to scrap entirely, or at the least pare it down so much that it can no longer provide enough to cover what it’s intended to cover (see recent council tax relief payment caps for an example here), due to that ‘source of resentment which undermines social solidarity’ that you’ve at least managed to grasp. Do this with enough different benefits and the welfare state will soon be undermined.

and never seen anyone call for it to be made universal.

Arguably housing benefit becoming a universal benefit is covered by those campaigning for a basic universal citizen’s income or a living wage. Since housing costs form one of the major concerns in their campaigns.

“the argument is that by making a benefit means-tested ultimately leads to making it a piece of piss to scrap entirely, or at the least pare it down so much that it can no longer provide enough to cover what it’s intended to cover”

But far from being pared down over the last thirty years, the amount we spend on housing benefit has increased enormously, despite the fact that it is a means tested benefit.

3. Sean Halsey

Really, you’ve never heard of the Basic Income/Citizen’s Income? And you write for a major politics website?

4. Sean Halsey

Have you really never heard of the Basic Income/Citizens’ Income? What “lefties” do you know?

“Really, you’ve never heard of the Basic Income/Citizen’s Income?”

I’ve never heard of anyone advocate that it should be set at the level of JSA + Housing Benefit. E.g. the Green Party would set it at ‘no less than the level of JSA’:

http://younggreens.greenparty.org.uk/AboutUs/Policy/CitizensIncome

Grateful for any links of anyone suggesting setting basic income to replace housing benefit.

@2

But far from being pared down over the last thirty years, the amount we spend on housing benefit has increased enormously, despite the fact that it is a means tested benefit.

If rents have shot up astronomically, its quite easy to end up with the situation where claimants receive not enough while the benefits bill as a whole has still increased, and since this increase in housing costs hits everyone including those unable to claim housing benefit, it’s not hard to justify to the public a need for a ‘bedroom tax’ or benefits cap to claw back housing benefits and other payments from the ‘undeserving’ (and to force them out of an area, or into the streets, or into their grave like the women who committed suicide), since it’ll be affecting ‘someone else’ and not ‘them’.

I note that the basic income model for the UK on the Citizens’ Income website suggests that the basic income would be supplemented by:

“a safety net (probably of an individualised, means-tested, unified Housing and Council Tax Benefit)”

http://www.citizensincome.org/filelibrary/Archived%20Newsletters/newsletter,%20issue%201,%202013.pdf

Grateful for any links of anyone suggesting setting basic income to replace housing benefit.

Well Clive Lord has been banging on about it for a fair bit, here’s one except of his :-

I have been advocating a Citizens’ Income for 40 years now, but Dynamic Benefits makes the social justice side of the case for a CI far better than I have done. Throughout I have been saying:

Taxes are paid by individuals to public bodies;

Benefits are given to individuals by public bodies

Therefore, to the individual the withdrawal of a benefit is the same as a tax – it is a tax…

The extremely important point which gets missed is that everybody who does not qualify for JSA or Housing Benefit pays this tax on the first part of their income. This only matters for the unemployed, or those on low incomes. No one else notices. All the Citizens’ Income does is change this disguised tax – on everybody – into a real tax just on higher incomes.

“Yet I have never ever heard any leftie argue that the existence of means tested housing benefit undermines the welfare state, and never seen anyone call for it to be made universal.”

Housing Benefit should be universal. It should not be means-tested. The structuring of it that makes it this way is inefficient and does not control the cost effectively. It also undermines universalism which is vastly more important than contribution, in practice and in principle. I’m not trying to score points here: I mean what I say, I can argue for it, it’s just now that you know of one Left-wing welfare campaigner that believes in all of the above.

Scrapping Winter Fuel Allowance for X percentage of the wealthier pensioners is a terrible idea too. It’s politics, not policy.

10. donpaskini

Hi Mason, Cylux,

Thanks for helpful comments. Leaving aside the cost implications, if housing benefit is universal, how do you take into account differential housing costs?

Local authorities already cap their allowances at a percentage of the local median rent(or did, I haven’t been able to follow how the Coalition might have screwed it up since then). This is not a means-test: the recipient is not being targeted, probed, measured, scrutinised, marginalised and penalised. Their needs, not their means are tested. Only the local authority’s means are tested.

Controlling costs by structuring in means-tests is as useless and malicious as controlling costs by imposing two layers of household upper limit caps: the HB cap and the overall benefit cap. Had Housing Benefit been structured into something more inclusive, progressive and reasonable that did not allow for means-testing ages ago, the Coalition would have had to jump over a lot more hurdles to force these bad ideas through. The ridiculous is a stepping stone to the absurd.

“Leaving aside the cost implications, if housing benefit is universal, how do you take into account differential housing costs?”

Ah. Don’t think you’re getting the hang of this CBI thing.

You dont take account of differential housing costs. People get to make choices about where they live by accessing the …er…whisper it…market…

13. donpaskini

“Ah. Don’t think you’re getting the hang of this CBI thing.

You dont take account of differential housing costs. People get to make choices about where they live by accessing the …er…whisper it…market…”

I know that the CBI is a magic pony scheme, but we’re talking about different things here.

Your version of the CBI is the libertarian one where all the poor people have the ‘freedom’ to move out of London, whereas Mason and Cylux are talking about the leftie CBI which doesn’t involve mass homelessness but costs at least double the existing welfare state. Confusingly, both these policies have the same name.

14. Charlieman

@9. Mason Dixon, Autistic: “Scrapping Winter Fuel Allowance for X percentage of the wealthier pensioners is a terrible idea too. It’s politics, not policy.”

Yes, it is about politics. The proposed measure takes about £200 away from (guesstimate) one million people, and delivers a net saving. Which is good.

But it isn’t good enough. It promotes the idea that benefit reform and fairness can be achieved by technical tweaks. It reverses or muddles the path towards tax/benefit integration and realistic income support. It complicates the system rather then simplifying.

It is about populist politics: standing up for (net) £105 million per annum given to wealthy people, rather than looking at the bigger picture. Ed Balls had his moment to say “look I can save money” and played to the gallery.

@OP, Don: “…it strikes me as a perfectly sensible thing to stop spending £100 million on payments to higher earners which many people value so little that they choose to donate to charity.”

That’s a bit over the top, innit? If people valued the cheque so little, they’d use it to light a cigar. What people determine is that others might be more deserving of the money.

Pager’s not far from the mark actually, though I’d include rent regulation as well. There’s not much point in making a CBI if everyone can just up their prices to hoover it up.

There is a big difference between a principle of “to each according to their need” and a principle of means testing – although I appreciate they seem similar.

First, plenty have argued for a universal benefit that everybody is entitled to – so it isn’t an unheard of argument. But housing benefit (though it is indeed subject to a costly means test that causes all the problems you previously refer to) is perhaps better compared with JSA or indeed the old age pension: it is conditional on a particular situation. If I lose my job I am (or should be) entitled to unemployment benefit. This is through what is essentially an insurance principle based on the contributory principle. Therefore, not everybody gets JSA, but it should be universal in as much as everybody is entitled to it in the conditions of losing their job. The same is true of not being able to afford housing. It shouldn’t be a complex means test – it should be quite straightforward based on circumstances or changing circumstances. Another change in circumstances is growing old, and there are a range of benefits conditional on that.

I won’t shed any tears for millionaires missing out on a (for them) small amount of money, but I do think this is bad politics for all sorts of reasons and I do think there is a qualitative difference between a conditional benefit and a means-tested benefit, although complex means tests are often the government’s preferred method for administering conditional benefits (and should not be).

@ Don

Your version of the CBI is the libertarian one where all the poor people have the ‘freedom’ to move out of London, whereas Mason and Cylux are talking about the leftie CBI which doesn’t involve mass homelessness but costs at least double the existing welfare state.

Actually I’m happy with a much greater overall spend on CBI if it gets rid of the negative and debilitating effects of means testing, the poverty trap and the massive bureaucracy needed to administer the current system.

The psychological effect of people having a right to a basic income as citizens rather than claiming a state handout to meet their needs is colossal. I’m also comfortable with the well off losing the benefits of CBI through incremental taxation.

@ Cylux

I’d include rent regulation as well. There’s not much point in making a CBI if everyone can just up their prices to hoover it up.

No, we don’t need rent regulation. We need a properly functioning housing market free from the distortions imposed by HB. Without the HB subsidy to landlords, rents would fall dramatically- it’s basic economics.

Really liked this article. This is an issue that the proponents of univeral benefits need to address.

I put a very similar point to Owen Jones a few weeks back, asking him whether he also favoured universal housing benefit, JSA and council tax benefit.

His answer was this: “@OwenJones84: I want people to take up e.g. winter fuel allowance. I want to bring down e.g. HB by building housing

Owen Jones?@OwenJones84 Apr
@appensieve @sunny_hundal HB and JSA are solutions to (and symptoms of) specific problems: extortionate rents and unemployment

The problem with this argument from Owen is that winter fuel allowance is a response to the ‘specific’ problems of poverty and high energy prices. Also I don’t think unemployment is a particularly specific problem – if it is, then ‘poverty’ is as specific.

I did a storify of the whole conversation in case anyone’s interested http://storify.com/appensieve/universal-benefits-discussion#publicize

Really liked this article. This is an issue that the proponents of univeral benefits need to address.

I put a very similar point to Owen Jones a few weeks back, asking him whether he also favoured universal housing benefit, JSA and council tax benefit.

His answer was this: “@OwenJones84: I want people to take up e.g. winter fuel allowance. I want to bring down e.g. HB by building housing

Owen Jones?@OwenJones84 Apr
@appensieve @sunny_hundal HB and JSA are solutions to (and symptoms of) specific problems: extortionate rents and unemployment

The problem with this argument from Owen is that winter fuel allowance is a response to the ‘specific’ problems of poverty and high energy prices. Also I don’t think unemployment is a particularly specific problem – if it is, then ‘poverty’ is as specific.

I did a storify of the whole conversation in case anyone’s interested http://storify.com/appensieve/universal-benefits-discussion#publicize

Don’t be frightened of Owen Jones. Be frightened of me. I’m shouty. Like a Space Marine.

21. Robin Levett

@pagar #17:

No, we don’t need rent regulation. We need a properly functioning housing market free from the distortions imposed by HB. Without the HB subsidy to landlords, rents would fall dramatically- it’s basic economics.

Supply < demand at present, in large part because of decisions taken during the '80s to "free up" the market. The basic economics I am aware of suggests that prices will go up, not down, until that changes; which will, as noted by others above, have the effect of pricing the poor out of London. HB might have changed the distribution, but it hasn't caused the overall rise.

Annie – I’m not sure the point is really about the specificity but about the conditions. The point is that it is a social security system and ability to pay should not impact on eligibility – of course there are some payments where the conditions of receiving the benefit include ability to pay, but that apparent subtle difference is actually huge. The NHS is universal, but it doesn’t mean that they will give me a new leg if there’s nothing wrong with my old leg. It is administered on the basis of need, without being means-tested. So in a social security system you should receive payments if you lose your job, even if you previously were a high earner; people can (and do) buy private insurance to mitigate against job loss, as with healthcare, education, pension, etc – the same is true of housing benefit. Now it might be that in some cases the easiest way to administer this is via some sort of means test, as people may well have sources of income other than employment, etc. However, the conditions for benefits for pensioners are rather more easily calculated: age. You could decide to have an Energy Benefit for people who could not afford to pay their energy bills, but why would you restrict that to pensioners?

@ Robin

You are suggesting that, if HB were abolished tomorrow there would be no effect on rents.

Tenants would just find the rent money from other resources? Come on you’re smarter than that. Private rents would obviously plummet.

Over recent years buy to let landlords have gossly overcharged because doing so allows them to suck up the HB funding.

24. donpaskini

@Duncan

“There is a big difference between a principle of “to each according to their need” and a principle of means testing – although I appreciate they seem similar.”

Means testing isn’t a principle, though, it is a way of targeting eligibility for particular services. I’m arguing that some services should be targeted and others universal, on a case by case basis dependent on what achieves the best outcomes.

So housing benefit is either going to involve some kind of test of ability to afford housing (a means test) or universal payments to all irrespective of ability to afford housing, as some have been advocating.

In terms of winter fuel payments, the desired outcome is ‘every pensioner can afford to heat their home’. I don’t see any problem, therefore, with this being targeted to those who can’t afford to heat their home rather than paid universally and irrespective of whether people can afford to heat their home. If anything, I’d have thought the priority would be to extend to non-pensioners who can’t afford to heat their home, rather than pensioners who can afford to heat their home.

That was the point I made to Annie further up, Don – if this is an Energy Benefit to ensure people can afford to pay for their energy bills (a perfectly laudable idea!) then the conditions would be based on ability to pay for energy, NOT on age. However, the Winter Fuel Payments are part of a suite of payments that are conditional on age. Of course, you could decide to make it conditional on age and income but that is adding means testing almost for the sake of it, when the thrust of recent government comments on welfare has been to stress the contributory principle. It is important to ensure that welfare is based on collective principles of contribution and entitlement; it is not state-administered charity. I suppose one reason for why Winter Fuel Payments seem qualitatively different is that most pensioners have a fixed income and therefore the situation where they might need an income-contingent benefit is no longer really going to happen: they may well have had periods of unemployment in their lives, or problems with housing, and therefore they “bought in” to a social, collective insurance programme. But rich pensioners are unlikely (although not completely impossible!) to ever be or have been poor pensioners. When I received JSA I did not feel grateful for the philanthropy and bounteous gifts from the government and rich taxpayers: I was entitled to this as all members of society are.

I might have to try and put something more general together about this, because it is quite a complex argument in some ways.

26. donpaskini

“the thrust of recent government comments on welfare has been to stress the contributory principle”

I think the contributory principle has particularly little relevance to this case. The question we should be asking is not whether WFPs have historically been conditional only on age, but whether that is the best approach in future to achieve the desired outcomes.

Far from seeing it as an entitlement recognising their contribution, some better off pensioners are actively uncomfortable with receiving winter fuel payment. For example, thousands of them have donated their payments to charities.

27. Renie Anjeh

Agreed with every single word. It’s utter madness for the Left (which many are doing) to argue that removing Richard Branson’s winter fuel payment is somehow undermining the welfare state. It really undermines their argument.

@17

No, we don’t need rent regulation. We need a properly functioning housing market free from the distortions imposed by HB. Without the HB subsidy to landlords, rents would fall dramatically- it’s basic economics.

My main fear is that a CBI would act as a market distortion too, although given that the money could in theory be spent on anything I suspect you may well be right. I certainly don’t disagree that HB has had a perverse effect on the housing market. I’d wager that even the ‘No DSS’ leases have based their rent charges based on what HB would pay out plus extra.

“Far from seeing it as an entitlement recognising their contribution, some better off pensioners are actively uncomfortable with receiving winter fuel payment. For example, thousands of them have donated their payments to charities”

Good for them. Again, I’m not concerned about them – I don’t worry about their sense of entitlement, more about poor pensioners’ potential sense of indebtedness. A lot of pensioners miss out on benefits to which they are entitled because they are embarrassed or ashamed of going “cap in hand” to the benevolent state, just as – in a situation where the state just provided healthcare to those who it deems can’t afford private insurance – many people would struggle to try and keep up insurance payments because they wouldn’t want to label themselves as needy. Rather than a social system, it becomes a sort of state-sponsored philanthropy. I appreciate this wouldn’t be an “opt in” payment, but that only impacts on the logistics, not the psychology.


Reactions: Twitter, blogs
  1. Means testing is the wrong answer to social failure | Left Futures

    […] Don Paskini column on Liberal Conspiracy contains a partial defence of means testing the winter fuel allowance. Despite conceding the valid […]





Sorry, the comment form is closed at this time.