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:
- Moving from universalism to selectivity increases social and economic inequality and diminishes rather than enhances the status of the poor
- Selectivity requires process and procedures that separate benefit recipients from the rest of society, increasing stigmatisation and reducing take-up
- 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.
- 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.
- The economic impact of universalism is much greater than the economic impact ofselectivity because of the multiplier profile of expenditure
- It also creates positive economic stability by mitigating the swings in the business cycle and creating much more economic independence among the population.
- On virtually every possible measure of social and economic success, all league tables are topped by societies with strong universal welfare states
I’m not aware of any persuasive counter-argument to the above.