How to means test a bus pass or keeping the middle class sweet25 August 2009
Ask any gathering of elderly peers if they use public transport and most will reach into their pockets to wave their free bus pass. "I never travel without it," their lordships chortle.
Not all peers are well-off, but like the £250 winter fuel allowance paid to older dukes - to help heat the east wing - their inclusion in "the middle class welfare state" makes it easy for thinktanks right and left to say that trimming the £90bn benefits bill should start here. Or with the £190 pregnancy grant; or the free TV licence for the over-75s (dukes included); or the child trust fund (£250), another New Labour attempt to ease the life-long disadvantages inherited by a baby born into poverty. Nick Clegg wants to try. David Cameron was again urged to act at the weekend.
Cutting benefits is the third leg of the triangle of pain Britain now faces - cut benefits, raise taxes or cut public services - but even when the recessionary hole in the public finances is probably 6% of GDP, the trouble with such talk is twofold. It will be complicated - how do you tax or means-test a bus pass? - and it may not yield the billions that justify the aggro it will generate.
As David Willetts said when Tory benefits boffin: "For the past 25 years ideas that look very attractive from a distance look less so the closer you get to trying to put them into practice." But every day builds up the pressure on Cameron to promise drastic action soon after the Tories (probably) win the 2010 election. Without a credible plan to close the spending gap, he hinted last week, feather-brained markets could panic and refuse to fund government borrowing. Rightwing champions of a smaller state will also pile on the pressure for ideological reasons. Labour is right about that. No lover of dukes, Gordon Brown has long acted on the belief that universally-paid benefits like the state pension or child benefit help sustain middle class political support for the welfare state.
That is expensive so chancellor Brown also introduced complex means-tested benefits targeted at the neediest. To boost support for them too he raised the bar high. Some families on £60,000 - more than twice the national average - get child tax credits.
Madness, say Tory thinktanks like Policy Exchange and Reform. But it is these big ticket items - freezing, delaying or cutting pensions/benefits, changing the rules to exclude the better off - not free bus travel, which will save billions. Labour has begun capping child benefit payments for better-off families, and trimming winter fuel payments without jeopardising the middle class buy-in. " Robust but fair" rules is what voters want, says research. Trouble is that middle class voters on £30-40,000 a year don't all realise that curbing perks means curbing theirs. Even Boris Johnson made London peers' bus passes more generous.