Bus pass-age to stay at 60 as costs fall in real terms and universal benefits are vindicated

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The free bus pass, along with free prescriptions and other universal benefits, has been criticised for providing a benefit which many do not actually need and thus wasting taxation revenue which might be spent on more needy causes.

Typically, media sources have made much of the increasing cost of the scheme from £159 million in 2006 to £202 million in 2018 but have forgotten (?) to take inflation into account. The costs have increased by 27% yet inflation has increased by 40% suggesting that costs have actually fallen in real terms.

The Scottish Government has, however, decided to retain the age of eligibility for the benefit at 60, unlike in England where it will be increased to 65 by 2020.

The scheme will now be extended to include those travelling with eligible disabled children under five and a further extension for modern apprentices is to be considered.

The argument in favour of universal, as opposed to selective or means-tested, benefits was well made in 2012 by the Jimmy Reid Foundation, starting with this:

‘The emerging political argument at the present to both undermine first universal benefits and then by association progressive taxation is that rich and middle-class people are getting benefits that they don’t need (for example free bus passes, free prescriptions, free tertiary education).  An easy and straightforward argument for progressive tax is that higher taxes for richer people compensates for their access to these benefits. This is an argument we give up at our peril.’

The JRF study then gave these statements, derived from strong evidence, in defence of universal benefits:

  1. Moving from universalism to selectivity increases social and economic inequality and diminishes rather than enhances the status of the poor
  2. Selectivity requires process and procedures that separate benefit recipients from the rest of society, increasing stigmatisation and reducing take-up
  3. Universalism is incredibly efficient – the selective element of pension entitlement is more than 50 times more inefficient than the universal element measured in terms of fraud and error alone and without even taking into account the cost of administration.
  4. In economic terms universalism is clearly shown to deliver Merit Goods (things we all benefit from) and Public Goods (things that could not be delivered without collectiveprovision) which selectivity simply cannot deliver.
  5. The economic impact of universalism is much greater than the economic impact ofselectivity because of the multiplier profile of expenditure
  6. It also creates positive economic stability by mitigating the swings in the business cycle and creating much more economic independence among the population.
  7. On virtually every possible measure of social and economic success, all league tables are topped by societies with strong universal welfare states

http://reidfoundation.org/wp-content/uploads/2012/12/The-Case-for-Universalism.pdf

I’m not aware of any persuasive counter-argument to the above.

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4 thoughts on “Bus pass-age to stay at 60 as costs fall in real terms and universal benefits are vindicated

  1. Alan Gordon August 3, 2018 / 9:34 am

    Thanks for the inclusion of the Jimmy Reid Foundation arguments.

    Liked by 1 person

  2. Alasdair Macdonald August 3, 2018 / 11:02 am

    I support the arguments of the Jimmy Reid Foundation. I have had the card for nearly 11 years now. I have never owned a car, by choice, and always used public transport. My local usage has not changed much, but I use it to get around Scotland. Unless I want to get to Edinburgh, say, fairly quickly, I take the bus instead of the train.

    I do not feel any guilt about using it, although I can certainly afford to pay full travel costs. I have paid all my taxes and other social dues and, like the winter fuel allowance ((which I always donate to charity), the cost of the bus pass is factored into my pension by the government actuaries.

    We need to improve the quality of our buses and deal with the route coverage and frequency, so that we can get more people out of cars for their travel. This entails reregulation and, possibly, moving bus provision back into some kind of municipal and other forms of public control. I am not opposed to franchising, with strong public control.

    I would like to see the bus pass extended more widely amongst the population, particularly young people. If, as an interim, introductory measure to defray start up costs, this entailed the bus pass being assigned a notional income value, to be declared on my tax return and, if appropriate, I would make a payment to HMRC for the tax due. It is a form of means testing, but it precludes the stigmatisation associated with testing. Making the card available to the entire population, would probably increase bus usage and stimulate political pressure for better quality buses and a more comprehensive and frequent service. It could be seen as a form of citizen’s income. More people using public transport might well foster better social cohesion – as long as it was not griping about ‘these bloody buses’ and overcrowding!

    Liked by 2 people

  3. David Braidwood August 3, 2018 / 11:39 am

    Not a criticism just a comment. The headline is misleading but referring to universal credit rather than benefits, folks might equate it with the Tories despicable policies, which I know wasn’t your intention.

    Like

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