Why it's time to scrap benefits for the better-off

As Chancellor Rachel Reeves told the Commons that millions of pensioners would no longer receive winter fuel payments, as part of efforts to fill a £22 billion black hole in public finances, one observer said she appeared to be “shaking with anger”. It’s probably not what she got into politics to achieve.

The benefit will now be means-tested in England and Wales – reducing the number of recipients from 11.4 million to 1.5 million – and the devolved administrations in Scotland and Northern Ireland must decide whether to follow suit or attempt to fund this universal benefit themselves.

In Scotland, that could cost the SNP government an estimated £100 million. Public finance minister Ivan McKee said that the money would “need to come from somewhere else if we want to continue to pay that winter fuel payment, which we absolutely want to do”.

The question is, however, should they want to? Clearly there are many pensioners struggling to get by and no one would want to take money away from them. And there are self-sacrificing elderly people who do not claim benefits they are entitled to even though they could use the help. However, there are also some pensioners who would be just fine without it.

NHS, housing and education crises

Meanwhile, there are other claims on the public purse. Spiralling NHS waiting lists, cuts to the Scottish Government’s affordable homes budget amid a housing crisis, and government funding cuts that have left some universities in an “incredibly challenging” financial position are just three examples of some pressing priorities.

Would wealthy elderly people prefer to get a benefit they don’t need over the ability to get a hip replacement that would relieve them of constant pain? Similar questions apply to other universal benefits like free tuition fees and free prescriptions.

These are attractive ideas. No one should be denied access to education or medicine because it costs too much. In an ideal world, they would be free. However, unfortunately, the world is far from ideal and that means we must cut our cloth and balance the pros and cons of spending decisions.

Benefits for people on up to £80k?

If the NHS is too busy to see patients for weeks, months or even years on end, the free drugs at the end of the process may come too late. Free tuition fees have also caused increasing problems for universities as the amount provided by the government has been eroded by inflation.

It is not only the SNP who are fond of providing state benefits to wealthy and poor alike. In April, Rishi Sunak’s Conservative government decided to increase the income threshold to receive child benefit to £80,000, although the payment tapers off from £60,000.

Again, this is all very nice but the welfare state is supposed to be a safety net, not a silk cushion. And when in-work poverty is a growing problem, it is ridiculous that people on such relatively high incomes receive benefits.

Successive governments have fallen into the trap of allowing employers to pay their staff so little that their wages need to be topped up by benefits, which amounts to a subsidy to business, rather than their staff. Labour’s plans to end exploitative zero-hours contracts are a step in the right direction, but they also need to consider raising the minimum wage.

As a society, we should be working towards a situation in which the typical working family does not need to claim any benefits at all. A decent day’s pay for a decent day’s work is an old-fashioned slogan, but it’s as relevant today as it ever was.