Steve Richards: Not every pensioner needs a free train ticket

In essence, universal benefits waste public money by subsidising those who already have enough
  • @steverichards14

Sometimes a few moments can make sense of a complex and emotive issue. Recently, a friend and I ran to catch a train in London. With seconds to spare I searched for my Oyster Card, finally found it in the fifth of many, awkwardly placed pockets, flicked it against the machine, noted a sum that would buy a decent Chelsea manager had already been removed, and rushed onto the train.

My friend did not bother with any of this. Elegantly, she strolled onboard and held the door for me. Once I had sat down I warned her breathlessly that she was taking a risk not paying her fare as inspectors patrolled the line. She looked at me loftily and said that, as she was over 60, she had a Freedom Pass and travelled for nothing. I responded that her subsidy was outrageous. She was better off than most people in work. It was not fair and partly explained why the rest of us, including low-paid workers, paid a fortune in fares.

In those few seconds, I became convinced that David Cameron and George Osborne were right to target child benefit and, if anything, should go further. Of course, the arguments for universal benefits are powerful. All recipients have a direct link to the state. They are easy to administer. There are no glaring unfair losers, as there can be when benefits are targeted. And yet I think of my affluent friend strolling onto a train, unburdened, and the demands to come on public spending, the pressures on the NHS once Andrew Lansley's fantasy land has been dismantled, the need for smaller classes in all secondary schools and not just in a few pampered "free schools", and the requirements of a modern transport system.

In such a context, the arguments for universal welfare benefits become puny and easily countered. In essence, it is a waste of public money to subsidise those who already have enough cash. The way the state can connect most effectively with the squeezed middle is to provide the best possible public services.

Cameron and Osborne have good cause to target child benefit, but, as usual with these supposedly brilliant strategists, they have gone about it with a superficial flourish. The principle that those paying the higher rate of tax should no longer receive the benefit is fair, but the move is a massive leap. At the very least, the details needed to have been carefully thought through before the announcement was made.

Instead, Osborne, needing a headline for his 2010 party conference speech, chatted over the idea with Cameron and the historic leap was taken. Someone with a bit of time on their hands should do a study of poorly executed policies arising from the need for headlines before and after party conference speeches. Some of New Labour's sillier policies came about because Tony Blair and Gordon Brown wrongly felt their conference speeches had to be punctuated with announcements of new measures.

The child benefit proposal also highlights another issue in relation to this government. Because Cameron and Osborne get on so well, there is insufficient scrutiny of each other's ideas. No sane person would cite the Blair/Brown relationship as a model for government, but their mutual wariness meant that every idea surfacing from Number 10 or the Treasury received intense examination from the other side before anything happened in public.

On the whole, everyone is so polite and gets on well at the top of the Coalition. As a result, scrutiny is avoided. With little preparation, and not much consideration from Cameron, Osborne announced a dramatic break with history. The Chancellor is sometimes compared with Brown in his tactical wiliness. Although Osborne is in fashion, at least with parts of the media, and Brown emphatically is not, the latter would not have made so contentious a move so casually. Had he decided that he favoured targeting, Brown would have announced a review of the principle of universal benefits. He would have appointed a counter-intuitive figure to lead the review knowing in advance the figure would reach the conclusion that he sought. Only when public and media opinion had been won around and anomalies addressed would Brown have announced a precise policy. Cameron and Osborne have done the reverse, announced the historic break and then struggled to win over public/media opinion while agonising over the details.

The clumsy execution does not mean that they are wrong to press ahead. If the level of income at which the target is applied needs to be higher than originally envisaged to avoid obvious injustices then that might be one way to address the political risks. Another would be to apply the target when a child reaches school age. Some will still do better than others at the margins, but overall the policy will be fairer and money saved.

There are better causes around than giving my well-off friends an additional fortune as they travel free through austere times. /