The case for ending universal benefits is strong even for those on the left

When fees for university tuition were introduced, many on the left thought the idea was scandalous. After all, the state pays for children to be educated for free at school because of the economic and cultural benefits to society this brings, and there was no reason why the same should not apply to university.

Since then, the cost of university education has risen significantly, as have student debts. However, in the early days of the Labour-Liberal Democrat coalition, the graduate endowment scheme reduced the amount Scottish students had to pay and then, in 2008, the SNP government scrapped fees entirely, with the government picking up the bill.

In 2022-23, the cost of this universal benefit was about £900 million. The SNP has made considerable political capital out of the difference in approach between the Scottish and UK governments on this issue, in a way that chimes with the gut reactions of many Scots to the idea of tuition fees.

Similarly, the flat charge of £9.90 for some prescription drugs levied in England is regularly contrasted with Scotland’s policy of free prescriptions for all, introduced in 2011 under the SNP, which cost taxpayers £1.52 billion in 2022/23.

In May, the SNP’s ‘news, research and rebuttal team’, noting an increase in England’s prescription fee, argued that it “shows how decisions made in Scotland are better for the people of Scotland which is why we believe in independence. We believe healthcare should be free at the point of use for everyone.” For all those committed to the ideals of the NHS, this is an appealing argument.

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Far from an ideal world

A third example of a universal benefit was the winter fuel payment given to all pensioners in 1997 by the newly elected Labour government. One of the first acts of Keir Starmer’s government – and perhaps the most controversial – was to announce that this would no longer be paid to all and would instead be means-tested, saving an estimated £1.4 billion.

In an ideal world, university tuition and prescriptions would be free. And few object to the idea of helping pensioners pay their heating bills. The problem is the world in which we actually live is far from ideal. Starmer’s decision on winter fuel payments was made not out of a desire to be mean to elderly people, but because he needs to balance the government’s books.

Faced with tough spending decisions, the means-testing of universal benefits is one of the least-worst ways to save money in order to preserve critical frontline services. The idea, at least, is that people who don’t need the money lose out, but those who really do continue to receive help.

Bizarre consequences of free tuition fees

The case for a reassessment of free tuition fees is particularly strong, given the financial crisis affecting higher education. The amount paid by the Scottish Government to universities to cover the cost of tuition has fallen by nearly £1,900 per student in real terms, or about 20 per cent, over the past decade. Meanwhile, stricter controls on immigration have helped reduce the number of foreign students and, therefore, the revenue from their fees.

In June, Universities Scotland warned that “even over the medium-term, the trajectory of public funding in universities is unsustainable”. What’s the point in having free tuition if the government can’t afford to properly fund it? The consequences of continuing this gradual reduction in funds will be a decline in the quality of education offered and potentially even the financial collapse of some universities.

The policy has also helped produce a bizarre situation in which some courses are off-limits to Scottish students unless they are from deprived backgrounds because they attract more funding. Last year, figures obtained by Labour showed that all the Scottish students admitted to nine courses in 2022 by Edinburgh University were from deprived or disadvantaged backgrounds. At the time, Michael Marra, Scottish Labour’s then education spokesperson, said: “We now have hundreds of ordinary young Scots applying to our top universities who in reality have no chance of getting in.”

The Scottish Government also caps the number of Scottish students who can be admitted in order to control the costs. So the policy of free tuition, designed to ensure access to education for all, is actually placing restrictions on the number of people able to study.

Saving the NHS

Ending free prescription charges is increasingly cited as a way to raise much-needed revenue for the NHS. Given the state of the health service, this makes a lot of sense, particularly as a 2018 study published in the BMJ Open journal did not find “sufficient evidence that universal free prescriptions was a demonstrably effective or ineffective policy, in terms of reducing hospital admissions or reducing socioeconomic inequality in hospital admissions”.

The amount saved would be far less than the total £1.5 billion annual cost if the model used in England was adopted. There, only about five per cent of prescriptions are actually paid for because of a large number of exemptions. In Scotland, that would mean a saving of something like £75 million, while a £9.90 fee would raise roughly £55 million. However, these are still not insignificant sums, particularly at a time when the Scottish Government is introducing significant spending cuts.

The political right has traditionally championed the idea that people should stand on their own two feet, pay their own way, while the left has stressed the benefits of freely accessible, state-provided services like the NHS. However, as Scotland’s waiting lists for treatment continue to grow to ridiculous proportions and with one-in-three doctors said to be considering leaving the health service to work abroad, the left should start to realise that dogmatically insisting on universal benefits could hasten the demise of the NHS, as increasing numbers switch to private healthcare, and damage other vital services.

In straitened circumstances, universal benefits – which give taxpayers’ money to people who don’t really need it – increasingly look like a luxury the country simply cannot afford.