I’m struggling to
see what particular set of principles from the Labour lexicon is being followed
in Scotland.
I understand the
principle underlying free prescriptions, which is in general terms that there
are certain services which should be available to everybody who needs them as
and when they need them with no price barrier.
And they should be paid for by a taxation system which taxes according
to people’s ability to pay. It’s clear,
and is a principle which I support.
I also understand
the underlying principle behind the Conservatives’ position, which is that
taxation should be as low as possible, people should pay for as many services
as possible, and that free services should be available as a safety net solely to
those most in need, with eligibility assessed on the basis of some sort of
means test.
The way the leader
of the Labour Party in Scotland
is posing the question is very similar to the way that the Conservatives have
been posing the question over many years.
Why, she asks, should a chief executive on more than £100,000 a year not
have to pay for his prescriptions whilst the pensioner needing care has their home help cut. The question could have
come from any number of Conservative politicians with equal facility. It’s hard to believe, however, that the
Scottish Labour Party is really trying to take the place vacated by the meltdown
of the Conservatives in Scotland
by following the same policies which led to that meltdown.
I’m sure that they’d
argue that they are simply being pragmatic; but it looks like the only real
principle that they’re following is that they must oppose whatever the SNP
proposes; and that’s not much of a principle at all.
Means-testing is a
phrase which still carries a certain amount of baggage, and probably more so in
Scotland and Wales than in parts of England. Arguing for more means-testing for health
service provision is an obvious position for Tories to take as part of their
wish to reduce the levels of the most progressive tax, namely income tax. But it’s curious to hear Labour politicians
trying to argue that means-testing is a ‘progressive’ policy.
Posts
19 comments:
You might be interested in my take on this here http://www.bevanfoundation.org/blog/hooray-for-taxes/
Read the speech John. It's a critique of the failure of Salmond to take the difficult decisions for fear of scaring the horses before any independence referendum. The SNP government might be providing free services but at what cost. Last week the Scottish press which is far better than the media in Wales highlighted, for example, the fact that Glasgow Council faces cuts of over £48 million this year and has asked for another 1000 voluntary redundancies. The SNP council tax freeze policy is not being fully funded as COSLA keeps pointing out. The new unified Scottish police force is also talking of over 3000 job losses. Although he can be criticised as a Labour supporter academic Arthur Midwinter has also calculated that the free service policy probably cost Scotland last year about 18000 jobs. In the Welsh context free services are not free. They are paid for out of a block grant given by the UK government and financed by today's UK taxpayers and not from past national insurance contributions. Also if you spend scarce public resources on free service such as Bus passes for the over 60s then opportunity cost would suggest that you can not spend the same money twice. One other point that also seems to be missed in this debate is the effetc that it might have on any reform of Barnett. Barnett will only ever be reformed if a majority of MPs in the UK Parliament agree that it should be reformed. How do you persuade MPs from English constituencies to support reform when they are told , for exampl, today by Ed Miliband that free prescriptions in England are unaffordable and the qualifying age for a free bus pass in England is going up in line with the rise of the pension age for women. By 2016 when Welsh over 60s are being told that they will still have free bus passes their English couterparts will have to wait until they are 66!!.
Victoria,
Thanks for the link. I hadn't seen that - in fact, it looks as though Google Reader has been ignoring your blog since about June! Anyway, I think we're in agreement on this one.
Jeff,
Nothing is ever 'free', of course. The choice we face is between paying for prescriptions out of taxation and paying for them at point of use, with some sort of assessment of means to determine who does and who does not have to pay. In practice, even the most free market Tories seem to accept that 'some' things should be paid for out of taxation rather than means-tested; the political debate is where to draw the line. Clearly, I draw it in a different place than do you - or Johann Lamont.
The real practical problem for politicians is that the more 'generous' the drawing of the line, the more taxation has to be raised to pay for it. But as long as that taxation is progressive in relation to incomes and wealth, then the more generous the position in which the line is drawn, the more redistributive the policy becomes. I understand why the right oppose redistribution, just as I understand why the left support it. I don't understand Lamont.
For my part, I'm with Victoria on this one: 'Hooray for Taxes'! It's a pity that so few politicians are willing to take up the cry.
I don't get Jeff Jones on this at all. First of all asking people to "read the speech" as your defence is missing the point. Most voters will never read or hear the speech, only the press report. If Lamont has failed to make her point in the press then she has failed.
"It's a critique of the failure of Salmond to take the difficult decisions for fear of scaring the horses before any independence referendum."
But Salmond said in his manifesto he would protect universal benefits, and he subsequently won a majority on that manifesto. Politicians should stick to the election pledges they make.
" In the Welsh context free services are not free. They are paid for out of a block grant given by the UK government and financed by today's UK taxpayers and not from past national insurance contributions."
This is an obscure point. They are paid for out of taxation rather than by the user. The left supports general taxation rather than making service users pay directly, where possible.
On the tax issue you might be interested in the article by Nick Pearce and Gavin Kelly which points out that in the future any Uk government will have to look at more innovative ways of raising taxation other than simple income tax. Everyone on the Left praises Scandinavian countries and then fails to point out, for example, that VAT is at 25% and on a much wider range of goods and services than in the UK. If you are serious about helping pensioners then the way to go about it is to ensure that all pensioners have a reasonable pension not specific handouts.Winter fuel after all was introduced by Gordon Brown not as a matter of principle but to recover from the awful 75p increase in the basic pension. As I approach pension age like mnay baby boomers I don't want charity in the form of a free bus pass or free swimming. Instead I want to be able to spend any money as I see fit. What if you don't want a free bus pass but would rather use the money to run a car? The other advantage would be that those with large pensions on top of the state pension would then see their income taxed. I also notice that you don't address the effect that this freebee policy can have on the perceptions of those that matter on the reform of Barnett. You should also have listened to Liam Byrne this morning On Radio 4 when he hinted that there will be changes both to regional housing benefit and free services if Labour win the next election.
Jeff,
"the article by Nick Pearce and Gavin Kelly" - can you provide a link to that? Difficult to respond to "any UK government will have to look at more innovative ways of raising taxation other than simple income tax" without reading it and understanding how and why they came to that conclusion. In principle, I accept that putting allthe eggs in one tax basket, as it were, would be impractical, but my starting point is, as it always has been, that taxation should primarily be based on ability to pay.
"If you are serious about helping pensioners then the way to go about it is to ensure that all pensioners have a reasonable pension not specific handouts". On that, I'd agree with you. I've always been dubious about the winter fuel payment in particular (the example you quote); it seemed to meat the time that it was introduced that it was a gimmick, and a substitute for ensuring that pensioners have a decent income and manage their finances (with help if needed) in such a way that extra payments for winter fuel are unnecessary.
"I want to be able to spend any money as I see fit". Of course - don't we all? But we collectively accept limitations on that to fund common services. The debate between us is surely about where we draw the line, not whether we draw one.
"I don't want charity in the form of a free bus pass or free swimming". Whether we see this as charity or as an attempt by government to help older people keep active and mobile without some form of means test is surely a matter of perspective. Whether it's the right way to do that is obviouslt open to debate - you think it isn't, I think it is - but referring to it as 'charity' is a bit OTT.
"I also notice that you don't address the effect that this freebee policy can have on the perceptions of those that matter on the reform of Barnett". I'm not entirely sure what your point is there, Jeff. It seems to be suggesting that Wales shouldn't be more socially-minded than England in case our masters cut our allowance.
" I don't want charity in the form of a free bus pass or free swimming. Instead I want to be able to spend any money as I see fit. What if you don't want a free bus pass but would rather use the money to run a car? "
Well, tough. Labour is in power here on a manifesto that protects the bus pass, the swimming etc.
You may not want universal benefits but Labour's argument is that most people do, and they vote for them at elections.
Are you going to try and change Labour policy in Wales? I don't know how it works or how democratic the party is but surely you could put in a motion to conference?
If the UK Government wants to look at more innovative ways of raising revenue then fair enough. If the UK Government wants to increase VAT to Scandinavian levels i'm not stopping them. But universal benefits are a Welsh policy choice that has been made at the relevant devolved elections.
Only the SNP and the Heinz 57 varieties of Marxism have really criticised the Lamont speech. The Scottish Sun which supports Salmond might have criticised the speech but most of the sensible Scottish media have welcomed the debate because they know on the back of the Beveridge and Christie reports that public spending in Scotland is unsustainable..The fact that Lamont reprised the speech this week at the Labour Conference also suggests that the speech has gone down well with Scottish Labour. There is a black hole in the SNP financial strategy which is going to get bigger. John on the Kelly /Pearce article look on the IPPR website. On Barnett my argument is that as long as there is this gap between England and Wales on the freebees there will be no political will for reform in any of the UK parties except perhaps for the imposition of some form of devo max aftre 2015 on both Scotland and Wales. As for future cuts in the Welsh Block. They are coming with another £15 billion needed in the Uk budget on top of the promised £10 billion in welfare cuts. the failure of Plan A suggests that the defict will still be over £99 billion in 2015. Welsh politics is going to become interesting if Labour win at a UK level in 2015 and stick to the Coalition spending plans for fear of market reaction.
Jeff,
Leaving aside the rather unnecessary jibe about 57 varieties of Marxist (which I'm sure, by the way, is a gross under-estimate), whether or not spending in Scotland is 'unsustainable' is open to more debate than axiomatic assertion suggests. What the SNP are doing in Scotland in many ways is not that dissimilar to what Labour are doing in Wales, on this issue at least. And it boils down to a debate about taxation and spending and relative priorities. I entirely accept that an approach which expands the delivery of services which are not rationed or controlled on the basis of price means a need for a higher tax take. The problem is, surely, with politicians who argue - or at least bahave - as though the spending can happen without the taxes. That is plain dishonest.
On the Barnett issue - will read the document over the next couple of days.
Jeff, having a welfare system and NHS in 1948 was to quote you "unaffordable" too, but we did it because it was the right thing to do! The SNP are social democrats who believe in universality of benefits, not a bureaucratic right wing means tested system. Interesting you're now supporting the coalition daily Mail position.
Universal entitlements such as free prescriptions, free elderly care and free university tuition were implemented during the long boom when:
a. there was no fiscal devolution, and
b. the devolved administrations benefited from generous budget settlements, fuelled by buoyant UK tax revenues from the City and the housing bubble.
Whether or not these policies have represented an efficient and effective way of maximising social welfare, the key 'problem', as both Calman and Holtham have said, is that spending on these and other policies wasn't counter-balanced by responsibility for / ability to raise the revenues to pay for them. Therefore voters haven't been able to make trade-offs at the margin between taxes and spending. As Tim Montgomerie has written, the settlement has probably undermined the prospects of the Tories in Scotland and Wales because their traditional 'lower tax' proposition isn't particularly relevant to spending-only institutions.
Inevitably, what looks like being a long drawn out squeeze on public spending, combined with the fact that the Scottish Government and maybe the Welsh Government will in future be raising (at least some of) their own revenue, is generating a debate about the benefit of certain expenditures versus their cost to the taxpayer. This is surely 'a good thing' because it means greater accountability all round.
As I've said in an article for the Echo next week the freebees system really amounts to a pre 1914Downton Abbey approach to social policy where everyone should be grateful for the crumbs from the top table. There really is no logic to the idea of winter fuel allowance for all over 60s except to see it as an attempt by Gordon Brown to recover from the disastrous 75p increase in pensions. If you are interested in the welfare of old age pensioners, for example, then what you do is ensure that the basic state pension is more than adequate and on par wit pension sin Europe. You then allow the pensioner to spend the pension as he or she feels fit. Stop the freebees as Labour and the Liberal Democrats are beginning to look at and the Dilnot recommendations regarding personal care can easily be introduced. To describe it as the politics of the Daily Mail is I'm afraid easy if you never expect to be in power and therefore will never have to take a difficult decision in your life.
Anon 15:12,
I agree that devolution of revenue raising as well as spending would increase accountability, and allow politicians in Wales to put real choices before the electorate. I think that would be an entirely good thing, albeit that I'm concerned that so few mainstream politicians are actually prepaed to put the case for taxation. At the moment, it's too easy for people to take the credit for the good and blame someone else for the bad.
Jeff,
As I said above, I agree with you on the winter fuel allowance. (It was clever politics though - hardly anyone dares to suggest abolition!)
But there's atill a gulf between us on the basic proposition. And it's an ideological gap about whether the tax system can and should be used for redistributive purposes and to what extent. Taking less tax, cutting back on what you keep calling 'freebies' (an ideologically-tinged turn of phrase if ever there was one!) and leaving people to spend their money as they wish effectively increases the range of goods and services which are either rationed by price, or else subject to means-testing at point of need. I entirely accept your view that Labour and the Lib Dems seem to be moving in that direction; but I don't accept the conclusion you seem to draw which is that the rest of us have to follow.
At precisely the time when inequality is growing, and the extent of inequality is attracting adverse attention, it looks to me like throwing in the towel and allowing the ideological right to win.
Jeff,
Is this the article to which you were referring? Only I can't see where it really supports your statement that "any UK government will have to look at more innovative ways of raising taxation other than simple income tax". It doesn't say the opposite either, mind. It certainly maps out a gloomy picture of the fiscal choices facing any alternative government, although it is first and foremost an opinion piece. Nothing wrong with that, but it isn't the same as a scholarly piece of analysis.
One thing it does say quite clearly, with which I entirely agree, is "While Britain’s economy has many strengths ... sharing prosperity widely is not among them". Quite. But what are we going to do about that if we were to reject the idea of using the tax and benefits system as a redistributive tool?
I don't know whether you heard the Today programme on Friday but the former Scottish auditor-general Bob Black called for a debate about universal entitlements. He argued that the costs of some entitlements were rising dramatically, and that combined with the Scottish Council Tax freeze, this is having a knock-on effect on local social services.
http://www.bbc.co.uk/news/uk-scotland-19839096
Frankly John in my opinion the policies being folowed by all three devolved administrations with regard tio free services are unsustainable i th long term given thta they don't raise their own finances. If they did we might then have a more mature dbate an dmore voters woudl then become interested in the outcome of any Assembly election. As the demonstrations in Scotland show, and this is the point that Lamont was making, the SNP's policy of free univeristy tuition is partly being paid for by really savage cuts in the budgets of FE colleges Although some of us have been saying it for years perhaps those who don't believe that the party's over and difficult decisions are needed should read the IFS report commissioned by the WLGA. They might also read a real interesting article by Martin Wolf in the FT on whether the slow down in economic growth in the western world might be here to stay.
"Whether or not these policies have represented an efficient and effective way of maximising social welfare, the key 'problem', as both Calman and Holtham have said, is that spending on these and other policies wasn't counter-balanced by responsibility for / ability to raise the revenues to pay for them. Therefore voters haven't been able to make trade-offs at the margin between taxes and spending."
This is a bit of a distortion of what Holtham (and co) said in their reports. Holtham has never identified free prescriptions as being a "key problem" to my knowledge. Wales raises more in tax than the block grant is worth, and health is a devolved policy area. There is no real evidence that significant savings could be made in Wales by means-testing prescriptions.
I find it interesting that supporters of means-testing cannot politically or statistically justify their stance in Wales.
I also don't see from GERS that there is a black hole in Scottish finances. Sure they will have to take difficult decisions, increasingly so, but they do have more room than Wales to make those choices. Welsh universal benefits are not quite as generous as Scottish ones- particularly on education. But it's as if opponents of universal benefits simply don't want to accept their existence or that they are a normal part of service provision in social democratic countries.
A problem with Jeff is that his valid points are clouded by inaccuracies he lets stray into his writing. He says he doesn't want charity through prescriptions. But in fact as a presumably relatively well paid worker Jeff has probably already paid for more prescriptions or bus passes than he has needed. Really Jeff, you aren't benefiting from charity.
This is a bit of a distortion of what Holtham (and co) said in their reports. Holtham has never identified free prescriptions as being a "key problem" to my knowledge.
True, the Holtham report didn't make any explicit reference to free prescriptions. However, it did say that under the current settlement there's no connection between the taxes paid in Wales and the Welsh Government's spending. Spending which by implication includes flagship policies such as free prescriptions.
My original point was simply that connecting this spending with revenue-raising would, as Holtham said, give the Welsh Government better incentives and enable Welsh politicians to offer voters a broader range of trade-offs.
There is no real evidence that significant savings could be made in Wales by means-testing prescriptions.
That may be true, but back in 2010 Brian Morgan argued that free prescriptions, free hospital parking, school breakfasts etc. cost £60-100m in total. I don't know whether his figures were accurate but it's surely a non-trivial amount of money - probably enough to build a bypass or two? - and a debate on how best to spend it seems to me entirely legitimate.
"True, the Holtham report didn't make any explicit reference to free prescriptions. However, it did say that under the current settlement there's no connection between the taxes paid in Wales and the Welsh Government's spending. Spending which by implication includes flagship policies such as free prescriptions.
My original point was simply that connecting this spending with revenue-raising would, as Holtham said, give the Welsh Government better incentives and enable Welsh politicians to offer voters a broader range of trade-offs. "
I made the comment you are quoting and your response was fair. I agree with establishing a link. But there is often a right-leaning perspective that suggests certain policies in Wales are "wasteful", because they can't win the argument at election time they want to destroy certain policies by other means. I reject that, and I think actually you could have revenue raising powers and maintain welfarist policies because with prescriptions in particular, they didn't use to be free and it wasn't cost effective to means-test them.
"That may be true, but back in 2010 Brian Morgan argued that free prescriptions, free hospital parking, school breakfasts etc. cost £60-100m in total. I don't know whether his figures were accurate but it's surely a non-trivial amount of money - probably enough to build a bypass or two? - and a debate on how best to spend it seems to me entirely legitimate. "
A debate would be legitimate but aren't we having that already? They're having that debate in Scotland at the moment as well. I don't really see a strong case against what Victoria Winckler has outlined. The Conservatives have never made a strong enough argument in Wales. Have they costed abolishing free prescriptions, parking etc?
The last time the Conservatives did those kind of sums they wanted to ringfence the health budget. So i'm skeptical.
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