Means testing…

There’s a great piece of analysis by Michael Taft on Notes on the Front from a week or so back on means testing which notes the chorus of voices – including the Troika – which demand that we means test social provision yet further as a ‘labour activation measure’. But as Michael points out in a labour market with so few jobs it pushes people to accept whatever jobs there are – a tall order, at lower wages, and secondly it is a cost-cutting exercise.

But it is his central point that is particularly notable. Point to the fact that there is ‘a powerful lobby calling for more means-testing in order to ‘direct money to those who most need it’’ he notes that of the EU 15 we have the highest percentage of social protection cash benefits that are means tested. We’re at 32.8 per cent, Spain, our nearest neighbour in that regard comes in at 14.8 per cent, under half as much again, and the UK is a paltry 11.1 per cent. Germany? 8.5 per cent. And all the way down to Sweden on 2.2 per cent and Denmark on 0.001 per cent. Even Greece – uncalm centre of the current fiscal hurricane – is on 5.2 per cent.

I’m not pointing to this in order to rewrite Michael’s piece but to raise a further point.

If means-testing was indeed the most efficacious way to direct public funds to those in need of them doesn’t it strike people that those states, and Greece, Portugal (8.9%), Italy (5.1%) and Spain in particular – but not just those states because after all social provision is a well developed area now of public policy given a century or more of it in some parts – would have introduced or developed such measures. Yet they haven’t.

And that suggests that far from means testing being a silver bullet in terms of delivery of services to those who need them, or indeed a ‘labour activation measure’ – in which case the supposedly vastly more efficient economies of Europe would see them as a centrally necessary part of their policy too – they are, as Michael points out simply a cost cutting measure.

And that makes perfect sense. Social welfare, as any of us who have had to depend upon it know, is amazingly partial and patchy in this state. It’s not simply in the provision of services that elsewhere would be free at point of use, or the constrained scale of those services, or the extra costs that are incurred in accessing them. But in the scope of the cash benefit services, in the nature of the interactions necessary to receive them and – as exemplified here in the latest wheeze to curtail jobseekers benefit to 9 months without means testing from a year – the sheer paucity of that social provision.

I’ve noted previously that means-testing is remarkably inefficient, that it generates distortions (particularly for those who fall above or below certain limits of income), that we already have a society wide means of assessing (albeit with some omissions) wealth in the form of the tax system and that in certain areas it can provide an obstacle to access – as with grants.

But it is the sense that all is contingent, that such provisions – and this is core conceptual aspect of means-testing – are at best a necessary evil and must be monitored on a continual basis because in essence those seeking them and receiving them are not trusted. That dislocation at their heart that there must be a check before access can be granted.

In a way this is a microcosm of the broadest problem in this state that it is not run for the benefit of its citizens but almost instinctively is run with the sense that any social provision is a necessary evil, usually wasteful and always reflecting back poorly on those who have need to access it. Part of this is drawn from a sense that resources are limited, although there is a telling indifference and antagonism to the counter argument that taxes can be raised and broadened.

It is the antithesis of a view that social provision is what a state should do, because it is necessary as with health and education, because it is moral, and because even that in a mixed economy it is efficient in transitioning workers from employment and through unemployment back to employment – and likewise with health and pensions, and also because we are citizens and just as we have responsibilities so the state (and society) has obligations to us and part of that is to treat citizens accessing provision in a respectful and enabling manner.