Thursday, November 1, 2007

Free is Cheaper

According to Alan Cochrane in the Daily Telegraph recently, “Alex Salmond is walking on water”. The drive displayed by the SNP administration at Holyrood has in equal measure astonished the Scots and enraged the English. Why can we not have the same standard of public services now available north of the border? Well, we can. If we vote for it. But neither Brown nor Cameron has any intention of matching the SNP’s social ambition. And that is because English bile is mis-directed at Scotland for doing the right thing, not at the UK parties for their failure to follow suit.

Funding is a red herring. Apoplectic but innumerate, English nationalists bemoan the Barnett formula, which dooms England to lower spending per head. They ignore the fact that only some public spending is covered by the formula; defence spending and the headquarters costs of the bloated Whitehall ministries are among the items not included. They also seem blissfully unaware of the huge regional variations in spending within England; if they are aware, they have no plans to do anything about it. The SNP, it should be noted, are quite happy to sort matters out by keeping all Scottish revenues, save only a sum remitted to central government for services thought worth having at that level. It’s a system that works well in various forms, for example in the Channel Islands, the Isle of Man, the Basque Country and Navarre and is certainly one that we in Wessex should study.

In Tuesday’s Times, David Aaronovitch trialled a different approach, arguing that good public services are a sign of selfishness. “Who benefits”, he asks, “from dropping all prescription charges and all student fee contributions, given that the poor were already exempt? What could be nicer than congratulating yourself on your public virtue while pocketing the state’s largesse?”

Such is the extent to which Thatcher’s children, at least in the media, have lost the plot. Two fundamental principles of the welfare state used to be universal entitlement and the corresponding abolition of means testing. Both remain sound. Giving the same benefits to the better-off as to the poor locks the former into supporting a system that works for everyone. Not having a means test means that no-one falls into the poverty trap, where attempts at self-betterment are forever being cancelled out by the loss of entitlement to benefits.

Destruction of the ‘welfare state for all’ is a joint project of Right and Left. The Right demands the breakdown of community in favour of the war of each against all. Denying public services to the better-off drives resulting bitterness towards those who continue to receive help, allowing them to become scapegoats for all social ills. The Left are just as involved in the project because means testing requires bureaucracy. It’s a source of well-paid jobs for parasitical Guardian types, for whom work means interfering in others’ lives under the guise of ‘doing good’. Smug satisfaction comes from knowing that they themselves need never suffer the iniquities of the systems they administer.

The cost to society as a whole of free provision is less than that of a means-tested system because the need for bureaucratic testing is eliminated. There are other advantages too. Our urban areas are facing increasing congestion. So why not make local public transport free, funding it through a reformed system of local taxation? (Who actually runs the trains and buses under contract is a secondary issue.) More folk would start to use public transport because it’s human nature to take an interest in something that you pay for whether you use it or not (as with state education or the NHS). Traffic would move more smoothly because there’d be less of it around; buses would speed up even more as no time would be lost in collecting fares. Less traffic would make cities healthier and more pleasant places. Expensive road-building plans would be abandoned and highway maintenance costs reduced. Declining car use would free up parking space for other purposes, reducing pressure on the Green Belt.

The more dismal economists will argue that abolishing pay-as-you-go removes the incentive to prudent management of resources. But it ain’t necessarily so. Even if having an NHS means some patients visit their doctor without first applying common sense, it doesn’t make anyone objectively more ill. And no-one hangs around waiting rooms just for fun. Moving from metered to unmetered water doesn’t transform the habit of turning the tap when needed and no more. On local buses, travel cards giving unlimited journeys over a specified period enrich lives; even if they lead to passengers sitting on the bus all day just admiring the view, there are worse things to do with the time. Such fears of ‘unnecessary journeying’ have been expressed over free travel for pensioners, which seems particularly mean given that the bus is making the journey anyway. A more pertinent fault of that scheme is its patronising attitude to the elderly. If money is the problem, then bigger pensions, not bus passes, are the solution. That way the elderly would be empowered to choose their own priorities. Another fault is that funding comes from trimming general financial support for bus services, leaving rural pensioners entirely cut off as their village’s bus is axed. Many others for whom free bus travel would be a boon remain outside the scheme. The young, for example, who are otherwise at risk of developing a car dependency that will not serve them well in an oil-depleted world. Bus passes, of course, need bureaucracy. That means work for local authorities and work for the bus companies. And we all pay more in the end.

Free provision does raise some important moral challenges. It leads to reduced tolerance of behaviour that imposes costs on society. For example, poor health arising from drugs or diet is more likely to attract public censure where the cost of treatment is borne publicly than where it depends on private insurance, where premiums drive home to individuals the consequences of their actions, albeit at the most inconvenient of times. There is however, no logic in the common mid-Atlantic attitude that other folk’s health is not my concern. If not their health, why their education, their fire protection, their street lighting, or their defence? As resources become scarcer, we shall all need to move away from the artificial dichotomy of public and private spheres and look to marshal our society’s efforts as a whole for the community’s benefit. In our case, the community is Wessex but the principle is one applicable to all communities worldwide.

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