Wednesday, 2 February 2011

Should Welfare Be Expressed as a Personal Debt?

The welfare state in the United Kingdom now rests upon the enormous borrowing of the Brown regime - either as chancellor  or as prime minister.  It is a debt. It is a debt so enormous and never-ending that it  cannot continue to be treated as if it were basic rights in a modern democracy that have somehow come to be expressed as a debt.

The allocation to individuals of social resources, rather than the provision of social resources to all, makes it fair to tie each welfare-consumer, as an individual, to what they take out of social provision.

The process of attributing  parts of the public debt to individual consumers has begun with the university students; this attribution has been associated with notions of privilege and of advantage to justify the practice of treating use of tax-payer resources for private consumption as private debt.   By the reasoning applied to the funding of university education any allocation of a non-universal welfare benefit should be treated as a debt of the welfare beneficiary.   Who can argue that welfare-funded housing in central London is a lesser privilege than  a degree?  That paying no council tax is worth less than the wage differential between graduate and non-graduate employment?

Tax-payer funded housing - debt. Council tax and local service provision tax-payer funded - debt.  Temporary worklessness alleviated by tax-payer support - debt.  The same conditions can be set in place: don't use the provision and you don't get into debt; use the provision but once you are on your feet again you must begin to return what you were given when you needed it.

No-one is worse off, as the university-fees-must-be-paid-by-the-undergraduates lobby endlessly asserts, except that  for long stretches of life there is an obligation to return what was taken in time of  need -  as has been required of so many of those young adults who are  allocated resources not on their own position in life  but on that of their parents.

Is it time to extend the practice of welfare as not social and universal - i.e., welfare that benefits society, not building a client voter-base -but as something that should be regarded as  a loan and carries private and real future obligations and present restrictions?  There has been a great deal of 'privatizing the profit, socializing the debt' argument  about the banks and their rescue.  Perhaps it is time to think in the same terms about the beneficiaries of the non-universal welfare state.


Odin's Raven said...

Customers should have competitive choices. If they could get a cheaper deal elsewhere the monopoly state bureaucracies would start to go bust, - as they should be properly costed and only have revenue from 'sales'. Less scope for layers of overpaid quangocrats and diversity co-ordinators and 'elfnsafety drones. No way will our PC statist rulers of any party allow that!

Weekend Yachtsman said...

The argument against, would be that the students have contributed nothing to the State at the point where they need to be financed, whereas the unemployed may well have been paying tax and stamp for many years.

I don't necessarily support that argument, but it has merits.

Otherwise, why do we pay so much tax? Why not just borrow as and when we need benefits? And what of those who have needs they will never be able to repay?

Caronte said...

What you are saying could also be construed as a case for replacing all welfare provisions (except the most basic provided in kind) with a basic citizen's income, paid out to everybody in cash, which recipients could use at their complete discretion. They could use it to educate themselves or finance start-up businesses or buy expensive health treatment or have a sex change if they wished.

This would set a ceiling on welfare expenditure per head, eliminate the paternalistic lack of choice typical of most welfare systems, and yet implement basic aspirations to equality and fairness.

The problem is finance. You would still need to tax - income and wealth and not just advertising and pollution. But you would save a lot in administration and bureaucracy.

Doug Daniel said...

Surely if anything, this is a great argument against tuition fees? Otherwise, what happens to this debt? How do the permanently unemployed pay off the debt accrued from their benefits? How does this encourage people to get a job, when they're just going to think "why bother? I'll just have to pay off that debt I owe."

How would national insurance fit into this? What about the state pension?

What you're basically talking about here is placing an entire section of the public under a lifetime of permanent debt, which they may quite possibly never have any chance of paying off. Getting into debt should be a personal choice - it's one thing to have a mortgage debt hanging over your head for most of your working life, but at least you have something to show for it in the end, and if you don't want that, you can just spend your life in rented accommodation. What you're on about is basically saying to people that just in order to live, they have to get into debt. So to avoid that debt, they have only one choice: death.