Allan Massie: Welfare debate looks unseemly

George Osborne has been lecturing our partners in the EU about welfare budgets. Picture: Getty

POLITICIANS are competing to see who can be the toughest on welfare, although not so much here in Scotland where the SNP sees protection of those on benefits as electorally advantageous. The Nationalists present themselves as defending the poor and the welfare state against the callous and nasty Tories. One may suspect that their tune might be different if we were actually independent and they were faced with the responsibility of raising the money they spend – at present, welfare payments of pensions and benefits don’t come out of the Holyrood budget.

But it’s not just the callous Tories and their somewhat half-hearted coalition partners. Labour is getting in on the act, too, with, for instance, proposals to require the illiterate to learn to read and do sums if they are to receive or continue to receive benefits. This is a Tory proposal Labour has latched on to, with, it says, a better scheme. Whoever is stealing whoever’s clothes, it is clear that Labour is afraid of being pilloried as soft on welfare reform and being seen as the “scroungers’ friend”. It is all decidedly unseemly.

Meanwhile, the Chancellor of the Exchequer, George Osborne, has impertinently or, if you prefer, with ineffable conceit, been lecturing our partners in the European Union about the high levels of their welfare budgets. You’re all doomed unless you cut severely, he tells them. He speaks with the authority of a man who promised to get rid of our annual deficit within the lifetime of this parliament and now says it will take twice as long.

Many find all this tough language – indeed, bullying language – offensive. It’s a repulsive sight, rich men making war on the poorest of society, they say. And, indeed, this is the case. Yet the zeal with which Labour is joining the competition to see who can talk the toughest points to something that the same people may find equally unpalatable: welfare reform is popular. It is not only in the bars of Surrey golf clubs that heads are nodded approvingly. It’s also popular with many working people on comparatively low incomes, and it’s popular with many of the self-employed who say: “I support myself and my family by my own efforts. Why can’t they?” The man who is paying rent or a mortgage out of his own pocket may well resent those who receive housing benefit and don’t work.

You may say that such people are victims of propaganda, and to some extent this is true. The number of so-called scroungers is really quite small, and there are many who are caught in a benefits trap. If they take a job, their benefits are cut so sharply that they are very little better off.

This is the problem that Iain Duncan Smith’s scheme for universal credit is attempting to resolve, but, even if it ever gets properly off the ground and running, there will be a lot of pain before there is any improvement. Meanwhile, it’s much easier for politicians in all parties to nibble at the edges with populist schemes that attract attention, but will make very little difference to the welfare bill.

For the truth is, of course, that by far the largest part of the budget of the Department for Work and Pensions goes on the second word in its title. It’s retirement pensions – a universal benefit – that gobble up the money, even though British retirement pensions are among the lowest in western Europe. Well-off pensioners, of course, pay back more than their meagre retirement pension in tax, and even moderately well-off ones do so, too. But the state pension is there as a safeguard, which is one reason why it should remain as a universal benefit.

The other reason is that today’s pensioners have made an implicit contract with the state. Since there is actually no national insurance fund, and since all pensions are paid out of current government revenue, today’s pensioners paid for the pensions of the generations before them out of their taxed income, and are entitled to expect that their pensions will be paid for in like manner.

Yet all the arguments about welfare and benefits are in a sense a distraction from the essential reality. Welfare states were developed all over western Europe in the years after the Second World War. We were all much poorer then. Now we are told that we can no longer afford them. A couple of years ago, a 93-year-old Frenchman, Stephane Hessel, wrote an angry pamphlet, which was an unexpected bestseller in France (an English translation was published here by Charles Glass Books). Hessel, a veteran of the Resistance and then one of those involved in drawing up the United Nations’ Declaration of Human Rights, was filled with indignation and wished to inspire the young of his country with the same feeling.

He wrote: “They have the nerve to tell us that the state can no longer cover the costs of these social programmes. Yet how can the money to continue and extend these achievements be lacking, when the creation of wealth has grown so enormously since a time when Europe lay in ruins? It can only be because the power of money has never been as great and selfish and shameless as it is now, with its servants in the very highest circles of government.”

You may say it’s more complicated than that. You may think the Angry Old Man took a rather simplistic view of what is a very difficult question. Yet his essential premise is indisputable. Welfare states were created when we were recovering from the most terrible war, when cities were indeed in ruins and food was rationed. Compared with the way things were in the year after 1945, we are quite extraordinarily rich today – even after a long recession for which the greed and incompetence of the banks, or the money power, bore a considerable responsibility.

But, despite being collectively wealthier than any previous society, we are assured that the state can put its finances in order only by spending less on the poor.

Does that make sense? It didn’t to Stephane Hessel. He thought the idea monstrous. I can’t think he was wrong.