Why Britain will suffer if the welfare state pays out only to poor people

Taking winter fuel allowance and child benefit from the better-off loses Labour something money can't buy – social solidarity

by Neal Lawson

Link to video: Ed Balls defends planned cut in winter fuel allowance

So, the bad news this week is that Labour has announced that the better off face cuts to their winter fuel allowance and child benefit. The good news is that there are probably few pensioners worried about both their heating bills and child benefit.

But what is being whittled away here is the priceless concept of universalism. The drift of the argument seems to be that in times of austerity we can't afford to help the better off with fuel payments or child benefits – instead they must be targeted at those most in need. This is a pretty sizeable practical and moral error by Labour, who are now on a slippery slope. Here's why.

First, universalism is incredibly efficient and means testing is hugely expensive. Benefits for all are calculated to be up to 50 times cheaper to administer than targeting. The winter fuel change will save peanuts but will be costly to implement.

Second, it's in the short term politically inept – it concedes unnecessary ground and makes Labour look like it agrees with George Osborne and Iain Duncan Smith to little or no electoral advantage. Over on Labour List there is polling which shows that Labour gains little if anything from these tactical moves. Women voters in particular will be most concerned. Universal benefits promote gender equality because they do not suffer from the inherent bias built into a system that assumes a male breadwinner model of welfare.

But it is the bigger issues that are being opened up by these tricky moves that are really concerning. One of the principles of the welfare state is that everyone who puts in gets out. When you start whittling that away, it has knock-on effects. First, consent for progressive taxation is eroded – so it makes no economic sense. Benefits and services for the poor always become poor benefits and services. The only way to guarantee the poor get access to a decent life is to ensure the rich are part of the same system. It's not that we can't afford to pay a rich person's heating bill – it's the poor who cannot afford for it not to be paid. And payments just for the poor tend to encourage the language of "shirkers" and the culture of division. Labour politicians are starting to talk about having to take "tough decisions" – but toughness always seems to involve undermining the weakest and most vulnerable in our community. Why can't we be tougher on tax avoiders, runaway high pay, the waste of the private finance initiative and big public IT schemes, Trident or hopeless wars? Public services could be run much more efficiently by the people working on the front line with the help of citizens who use the services. And the best way to get the welfare bill down is to invest in young people – get them building new homes or retrofitting old ones to save on fuel bills, protect the environment, reduce benefit payments, increase taxes and give them hope. It's such a no-brainer that even the IMF is calling for a £10bn stimulus for the British economy.

But what is really being lost in all this is something that money cannot buy. It's the sense that we might just all be in it together, that there are points of life, experiences, that we all share, that we have in common.

Universalism matters because it creates a sense of social solidarity. At a time when Britain feels almost palpably insecure and increasingly divided, Ed Miliband recently said that universalism was the bedrock of a good society. He is right. On almost all measures of social and economic success, international league tables are topped by societies with strong universal welfare states.

When cynicism about politics and politicians has never been higher, the merging of policy can only do further harm. Some benefits should all be the same but politics must never be.

Guardian