That requires the clear use of language by all the participants in this great debate. When Harriet Harman speaks about an "affluence test" instead of a means test, we should be in no doubt what it means. It means that there is nothing inherently correct, or left wing, in the principle of universal benefits which are paid to all groups in society, including those who don't remotely need them. Once the flight from universality is accepted, several reforms become possible, from taxation of child benefit, to reduced state pensions for the rich. After all, the most spectacular welfare reform so far has nothing to do with single parents. It was the introduction of tuition fees, and it was significant precisely because it ended a scam whereby parents who could afford to pay for their children's tuition got it for free. A new means test is being applied. It does no harm to admit it.
But admitting it does not mean that the middle class will be prepared for radical reforms to, say, the state pension - and the middle class embraces a great many more people than it did 20 years ago. Seen statistically, the middle class number 49 per cent of the electorate, compared to 33 per cent in 1979, or half the electorate. Many middle-class people, especially new members, will believe that paying National Insurance entitles them to the same benefits as everyone else. And those who have been thrifty all their lives will not look kindly at greater benefits going to those whose best qualification for them is that they haven't saved at all. But that is one of the most interesting ideas floating about in Whitehall now - a plan to relate state pensions inversely to earnings. Those who earn more would get less - and would, therefore, feel impelled to save more.
Pensioners exemplify most of the grave dilemmas of welfare reform. The long-term questions of how to go on funding an ageing population should not be confused with a serious problem in the here and now. It is the case that pensioners have, on average, been doing very well. One-third of them now enjoy incomes in the top half of those in the country generally. But it is also true that a disproportionate one in four of the bottom 20 per cent are pensioners. Millions of pensioners, including many widows, are living in a degree of poverty which is inexcusable, a disgrace in a rich and supposedly civilised modern society. They need help now from a Labour government, and they are entitled to expect it. They will not benefit from welfare to work. If the only impact of welfare reform is to save money - even if it is diverted into deserving causes such as education and the NHS - then it will have failed by the standards outlined in the Prime Minister's Dudley speech. But if some of the benefits now paid to those in upper income groups - those people who will fail the "affluence test" - can be redirected to make the lives of the poorest pensioners more enjoyable and dignified, then it would be a potent symbol of the Government's commitment to fairness. There is an old-fashioned word for this, rarely used by the cadres of New Labour, but since we believe that language should be deployed accurately, let us say it. The word is redistribution.Reuse content