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universal benefits
'Austerity Is Labour's Choice': Outrage as Starmer Cuts Winter Fuel Allowance
"Cutting winter fuel allowance is not a tough choice," Jeremy Corbyn said. "It's the wrong choice—and we will not be fooled by ministers' attempts to feign regret over cruel decisions they don't have to take."
Sep 11, 2024
Progressive critics and lawmakers are expressing outrage after the U.K. Parliament on Tuesday voted to cut a winter fuel allowance for millions of Britons, calling the move by the ruling Labour Party, which took power in July, a continuation of the Conservative Party's austerity policies.
The measure turns the allowance, which provides £200 to £300 ($262 to $293) per year to senior citizens for heating bills, into a means-tested program in which only the poorest will qualify. It's expected to reduce the number of people receiving the winter payment from 11.4 million last year to 1.5 million this year. Prime Minister Keir Starmer called it a "tough choice" that was necessary because of the poor state of the British treasury.
A vote to overturn the cut lost 348 to 228 on Tuesday after Labour successfully whipped enough its members of Parliament into supporting the cut. Fifty two Labour MPs abstained, at least 20 of whom had expressed opposition to the plan, and one voted in opposition.
Former Labour leader Jeremy Corbyn, who now represents voters as an independent, condemned Starmer's move.
"Cutting winter fuel allowance is not a tough choice," Corbyn wrote on social media. "It's the wrong choice—and we will not be fooled by ministers' attempts to feign regret over cruel decisions they don't have to take."
"Did he get permission from the Tories to reuse their trademark slogans?" he asked of Starmer in an a Tuesday op-ed in Tribune.
Under the headline, "Austerity Is Labour's Choice," Corybn railed against Starmer and his allies for falling back on the kind of neoliberalism that has dominated the U.K. for decades. He wrote:
It is astonishing to hear government ministers try to pull the wool over the public's eyes. The government knows that there is a range of choices available to them. They could introduce wealth taxes to raise upwards of £10 billion. They could stop wasting public money on private contracts. They could launch a fundamental redistribution of power by bringing water and energy into full public ownership. Instead, they have opted to take resources away from people who were promised things would change. There is plenty of money, it’s just in the wrong hands.
The winter fuel payment was introduced as an unconditional cash transfer in 1997 under then-Chancellor of the Exchequer Gordon Brown. Some economists have argued that U.K. pensioners are in better position today than than were then, and thus the payment no longer makes sense; others have noted that in real terms, the payment is far lower than it used to be, due to inflation, and thus had become a relatively insignificant benefit anyway.
However, progressives have called the cuts, which were first proposed after Labour took office and weren't mentioned during the election campaign, far too drastic, given the roughly 10 million people they'll effect. Meanwhile, Corbyn and others have argued that Labour's move marks a loss for universalism and could auger more cuts to come:
A universal system of welfare reduces the stigma attached to those who rely on it, and removes barriers for those who find it difficult to apply (both are reasons why the take-up of means-tested payments is so low). What next for means testing? The state pension? The NHS [National Health Service]?
Some commentators have objected to rich pensioners receiving benefits such as the fuel allowance. Progressives have responded that the money should simply be clawed back through higher tax rates on the wealthy.
"In my view the government should be looking to raise revenues from the wealthiest in society, not working class pensioners," Jon Trickett, the only Labour MP to vote to nix to the cut, said in a statement issued on social media.
Universal programs make it easier to reach all those who need help, progressives argue. The new winter fuel payment will be set up so that only those who receive a Pension Credit or other similar government benefit will be eligible for it. But only 63% of pensioners who qualify for the credit actually receive it, government statistics show. The government has announced a campaign to try to increase uptake of the credit.
Trickett said that he feared it would lead more senior citizens to fall into poverty during what he predicted would be an "extremely difficult" winter for his constituents in West Yorkshire. "After years of obscene profiteering by energy companies, they are hiking bills yet again," he wrote.
Rachel Reeves, the Chancellor of the Exchequer, said the cut would save the treasury £1.4 billion ($1.8 billion) this year. She argues that the Conservatives, who held power from 2010 until July, initially as part of a coalition, left the national finances in a dire state and Labour must fill a £22 billion ($28.7 billion) budgetary "black hole."
Labour hasn't released an official impact assessment of the winter payment measure. Reeves, like Starmer, has said she didn't want to make the cut, but two weeks ago a video clip of her proposing to cut the allowance as an opposition MP in 2014.
Rachel Reeves has repeatedly said she didn't want to cut the universal winter fuel allowance for pensioners but it was a tough decision forced on her because of the financial black hole left by the last govt
Here's Reeves 10 years ago: pic.twitter.com/1BAIL4racv
— Saul Staniforth (@SaulStaniforth) August 28, 2024
Reeves and Starmer have long tried to establish their fiscal prudence and distance themselves from purportedly free-spending progressives in their party. A progressive commentator on Novara Mediacalled their winter allowance cut an "incredible political fumble."
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Clyburn Asks: Who Would Oppose Means Testing Child Tax Credit? Answer: Lots of People
"There is literally not a single thing that the means-tested approach is better at than the universal approach," said one policy expert.
Jan 28, 2022
Rep. James Clyburn, the third-ranking Democrat in the House, said Thursday that he would be willing to support Sen. Joe Manchin's proposal to further restrict eligibility for the expanded child tax credit, a program that expired last month thanks in large part to the West Virginia senator's opposition.
In an interview with the Washington Post, Clyburn (D-S.C.) said that during negotiations over Democrats' stalled Build Back Better package, "Manchin made it very clear that he had a problem... not with the child tax credit per se, but he wanted to see it means tested."
"Means testing equals more bureaucracy, red tape, and waste."
"I'm not opposed to that," Clyburn said. "Who would oppose that? So, I would like to see him come forward with a bill for the child tax credit that's means tested. I think it would pass."
In fact, many--including dozens of Clyburn's fellow House Democrats--have voiced opposition to Manchin's demand for a lower income cut-off for the program, which lawmakers and the Biden White House are aiming to revive in some form.
In October, 27 members of the Congressional Progressive Caucus sent a letter to House Speaker Nancy Pelosi (D-Calif.) making the case for universal programs and warning against "complicated methods of means testing that the wealthy and powerful will use to divide us with false narratives about 'makers' and 'takers.'"
Manchin himself has made use of such pernicious narratives, telling colleagues behind closed doors that he believes some parents used the boosted child tax credit payments to buy drugs. Survey data shows parents largely used the monthly checks--up to $300 per child under the age of six and $250 per child between the ages of six and 17--for food and other necessities.
During an appearance on a West Virginia radio show on Thursday, Manchin reiterated his view that any child tax credit expansion Democrats pursue in the future must be "targeted" toward those who "make $75,000 or less" per year. According toAxios, Manchin had previously told the White House that "the child tax credit must include a firm work requirement and family income cap in the $60,000 range."
The expired, poverty-reducing program was already means tested, limiting eligibility to married couples who earned $150,000 or less annually and single parents who earned $75,000 or less.
\u201cThe other way you know Manchin doesn't know what he's talking about is that he wants "means testing" on the extension of the Child Tax Credit, when there is *already means testing* on the current CTC (starting at $75k for single parents/$150k for couples).\u201d— David Dayen (@David Dayen) 1631107111
After the boosted version lapsed at the end of 2021, the child tax credit reverted to its earlier form, which provides annual lump-sum payments but excludes the poorest families.
As Vox's Li Zhou wrote in October, Manchin's mean testing push "overlooks a few problems," including that "means-tested benefits can actually be more expensive to provide, harder to sell politically, and less effective than universal social programs, and they can place both a social stigma and discouraging bureaucratic requirements on Americans in need."
Rep. Alexandria Ocasio-Cortez (D-N.Y.) similarly argued at the time that "means testing equals more bureaucracy, red tape, and waste."
"That's why programs where means testing gets implemented are less popular, not more popular," she added. "It's also why many people who are eligible for means-tested programs still don't get healthcare or help at all--it's too hard."
As Matt Bruenig, founder of the People's Policy Project and a trenchant critic of means testing, put it recently, "There is literally not a single thing that the means-tested approach is better at than the universal approach."
"When understood properly, the means-tested approach costs the exact same amount of money and has a massive list of negatives that the universal approach does not," Bruenig wrote last month. "It is a completely indefensible approach to benefit design."
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Mondaire Jones, Katie Porter Urge Fellow Democrats to Reject Means Testing Folly
"Means testing is a choice to deprive millions of our neighbors of what they need simply to cope with a budget artificially limited by regressive tax policy."
Oct 15, 2021
Democratic Reps. Mondaire Jones and Katie Porter are again pushing back against any effort to implement means testing to water down potentially historic social investments proposed in their party's Build Back Better plan.
Making the proposed investments in the social safety net--including child care and Medicare expansion--universal is both "good policy and good politics," they wrote in a Washington Post op-ed published Thursday.
Jones (D-N.Y.) and Porter (D-Calif.) made their case a day after they joined other leaders of the Congressional Progressive Caucus in a letter to House Speaker Nancy Pelosi (D-Calif.) in which they similarly pushed for universal programs in the reconciliation package over "complicated methods of means-testing that the wealthy and powerful will use to divide us."
\u201cMeans testing is bad policy and bad politics. It has no place in the Build Back Better Act.\n\nMy latest with @katieporteroc for the @washingtonpost \u2935\ufe0f\nhttps://t.co/FfT3vXB4ir\u201d— Mondaire Jones (@Mondaire Jones) 1634248715
The op-ed also followed reporting indicating that President Joe Biden and some Democrats, including Sen. Joe Manchin of West Virginia, are open to or are directly pushing for means-testing--income caps--on certain programs to lower the plan's overall costs.
However, wrote Jones and Porter, the argument that means-testing aligns with "fiscal responsibility" just doesn't hold water.
"Means-tested programs cost more to administer, because complex systems, processes, and entire offices must be created to determine who qualifies," in contrast to "universal programs [that] allow us to maximize our investment in the American people," they wrote.
In addition, while means-testing proponents point to a need to exclude wealthier households from receiving benefits, Jones and Porter wrote that the practice "often excludes the most vulnerable poor, who aren't always able to jump through the required hoops to prove their eligibility."
Universal programs, the two lawmakers argue, "build solidarity that helps them stand the test of time--when we all have a stake in the success of a public program, it can withstand changing political winds."
The op-ed noted as an example former President Donald Trump's campaign pledge not to cut the widely popular universal programs Medicare and Social Security, as well as the cutting of means-tested programs such as SNAP and TANF by lawmakers on both sides of the aisle.
Simply put, Jones and Porter wrote, "means testing is a choice to deprive millions of our neighbors of what they need simply to cope with a budget artificially limited by regressive tax policy."
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