Making a contribution For too long, politicians declined to debate the shift from contributory (and universal) benefits towards means-testing. Philip Collins’s article (“Who benefits?”, June) is therefore welcome. But the very real “tension between equality and contribution” is perhaps not as insoluble as he suggests. Egalitarians reject means-testing as a divisive mechanism that narrows social security’s diverse functions to poor relief. The contributory principle—provided it’s interpreted inclusively and includes unpaid care as contribution—offers stronger social protection, including for women in couples who benefit from individual entitlement. We look to more progressive taxation and national insurance contributions to achieve vertical redistribution.
Ruth Lister, House of Lords
Philip Collins poses two major objections to an insurance-based welfare system. One is cost and the other is that such a move would limit welfare’s redistributory powers, which the centre-left values. The cost of an insurance-based welfare system is one which ought to be given over to the contributors to decide. If pensions are to be paid for, adequate long-term care costs covered fairly, and an ever-rising NHS bill met, then costs will rise. In my proposals, taxpayers as contributors would control these budgets, and therefore how much they paid in and received back (in payments and services). To have a fair contributory welfare state also provides the basis for limited but transparent redistribution. Eligibility would be based on financial contributions but, in my scheme, individuals performing functions which society values but for which they are not paid, such as providing care, would have their contributions covered. However, the principle that welfare needs to be earned would remain crystal clear. The advantages to social cohesion are clear. Frank Field, Labour MP
The problem of financing the welfare state is not just financial. Since the Beveridge era we have lost sight of the significance of the contributory principle. This proclaimed a reciprocal relationship based on common citizenship, whereas the Poor Law had reduced its clients to the status of paupers, dependent on handouts. Frank Field’s interesting alternative strategy (“Here’s my answer,” June) is unfortunately premised on alleged chronic budget deficits since 1948 (disputable mainly because of accounting on capital items) and also on his assumption that an insurance model of healthcare effectively checks costs—but just look at the United States! Peter Clarke, author of “Hope and Glory: Britain 1900-2000”
Philip Collins presents a compelling case that contributory welfare will “remain a minority pursuit in Britain”. As he outlines, a state-led approach is fraught with both practical and political problems. The urge for governments of the left to turn contributory welfare into redistribution, and for those of the right to means-test support, makes a collective solution politically unstable. But that does not mean there is no role for the state in helping people to protect themselves against the vicissitudes of the labour market. Individual ‘lifecycle accounts’ would integrate pension and rainy-day savings. Early draw-down to enhance state benefits during periods of unemployment, backed by a network of family and friends ‘guarantors’, would give people contributory welfare: but without the problems Collins identifies. Ian Mulheirn, Social Market Foundation
Philip Collins and Frank Field highlight how means testing has become increasingly dominant in the welfare system. Labour is right, therefore, to ask how the social insurance function can be brought back to the fore. A social security system worth the name should provide protection at key moments in life: losing a job, having a baby, retiring from work. But financing such protection will require reducing demand for welfare and prioritising scarce resources. Graeme Cooke, IPPR
Tough action on tax International co-operation to tackle tax avoidance, through institutions like the G8, is vital (Paul Collier, “Cracking down on tax avoidance,” June). However, there is action the government could and should take at home now: “naming and shaming” of companies and individuals, and opening up the books of Ftse 100 companies to scrutiny, would be a powerful deterrent. Other measures might include policing the tax system more aggressively, by ensuring the Revenue has the right staff with the right skills to challenge the tax arrangements of multinational companies; making tax simplification an urgent priority; denying public sector contracts to companies engaged in aggressive tax avoidance; and drawing up a new code of conduct to prevent big accountancy firms helping government devise tax law and then advising their clients how to get round it. This is the kind of tough action we need from the Prime Minister, whatever the outcome of the G8 summit. The fight against tax avoidance must be fought on both fronts. Margaret Hodge MP, Chair of the Public Accounts Committee
Paul Collier’s article highlights the difficulty in judging what is appropriate tax planning on the part of a corporation. The Italian multinational, Fiat Industrial, recently announced the decision to move its location from Italy to the not-well known “tax haven” of Basildon in the UK. The move is to achieve a lower tax cost for the business, from Italy’s corporate rate of 31 per cent to the UK’s lower rate, which is planned to be reduced to 20 per cent by 2015. Is this an example where, as Collier suggests, there should be “public condemnation of those who pay low tax,” or an example of the reality, which is that a company will generally seek to minimise expenses, and that tax is a business expense? Andrew Christensen, online
Erm, no It is a pity that David Frum spoiled his otherwise excellent review of Charles Moore’s superb biography of Margaret Thatcher (“Voice of the future,” June) by asserting that the issue that precipitated her fall was her refusal to set a timetable for British entry into the European Exchange Rate Mechanism. She was in fact Prime Minister when Britain entered the ERM in October 1990. And her objection to setting a timetable for Britain to enter the euro was never a problem, as the opt-out enshrined in the Maastricht Treaty demonstrated. David Hannay, House of Lords
Time after time Jessica Abrahams’s excellent article (“A life sentence,” June) highlights one of the weakest links in the rehabilitation revolution. As a mentor to several ex-offenders struggling to find work I am acutely aware of the barrier to employment caused by the requirement to disclose ancient convictions. The solution is to carry out a root and branch review of the Rehabilitation of Offenders Act 1974, which established the principle that convictions can become spent. The problem, even after last year’s adjustments to this act, is that the restrictions on being eligible for legal rehabilitation are too tight and the qualifying periods are still too long. Ex-offenders who comply fully with the new probation regimes should be incentivised by fast track opportunities to have their convictions “spent” more swiftly. Jonathan Aitken, former MP
Jessica Abrahams is quite right to highlight the many ways in which criminal record disclosures can hinder people getting on with their lives. A good next step in reforming the system would be to consider the plight of those convicted of crimes while children. Only a very few children commit such serious offences that they will remain of interest to the authorities in later life. For the rest, wiping the slate clean upon turning 18 would ensure that young people already struggling in the current economic climate do not face additional obstacles to a stable and productive adulthood. Andrew Neilson, Director of Campaigns, the Howard League for Penal Reform
Introduce online voting All of Lucy Webster’s points about wheelchair accessibility at polling stations are valid (“Get us to the ballot box,” June), but I wonder whether she goes far enough. My local polling station in Milton Keynes is “reasonably accessible” to me (as a wheelchair user). Nevertheless I have long opted for a postal ballot, mainly because I can’t physically fill in a ballot paper without assistance. In other words, I not only have to tell someone else how I wish to vote, I also have to rely on them to place my cross in the right place. This is far from ideal, but it is more dignified to do it in the privacy of my home than in the public space of the polling station. The ability to vote online or via a smart phone seems to be some way off in the UK. However, this would be another significant step forward in allowing disabled people to exercise their democratic right, via a ballot that is truly secret. John Durkin, Buckinghamshire
No shock here In his review of new books on the challenges China is facing today (“The shock of the truth,” June), Jonathan Mirsky maintains that if these books were allowed into China, Chinese readers would be “astounded” by the “damaging judgements” of these western experts. My observations and discussions with Chinese friends in Beijing bring me to a different conclusion. The issues the books raise—environmental degradation, decaying social morals, historical amnesia—are the same ones that Chinese people are struggling with on a daily basis. Much of the Chinese public these days harbour little illusion about the woeful state of their society. Similar diagnoses from western voices will more likely offer them an affirmation of their own judgements than give them “the shock of the truth.” Helen Gao, Beijing
Jonathan Mirsky's review contains a helpful antidote for the rash of what Perry Anderson dubs "Sinomania.” All three works reviewed take note of China’s impressive economic growth, whilst expressing discomfort about the pairing of expanding capitalist markets with a staunchly authoritarian political system. Of course, it was not that long ago that authoritarianism and rapid economic growth were widely believed to be happy bedfellows. Democracies, the argument went, diverted resources from investment into consumption. We now know that although annual GDP growth rates under dictatorships can exceed those of democracies in the short term, they are also more vulnerable to greater fluctuations due to their internal fragility. The rude “shock” of Mirsky’s “truth,” therefore, lies less in the Chinese Communist Party’s sins, than in the dangers of a global economic system so focused by the bottom line that we will soon find that when China sneezes, the rest of us will catch far more than a cold. And, as Mirsky’s review shows, China is hardly in rude health. Patricia Thornton, University of Oxford
Monbiot’s wild imagination George Monbiot’s strange fantasies about a return to the wild and the “rediscovery” of his atavistic instincts (“Call of the wild,” June) perhaps tell us more about their author than about humankind. As Walter Russell Mead has argued in Prospect (“The last savages,” February), today’s globalised urban dwellers are the true inheritors of the curious, acquisitive Stone Age groups who laid the foundations of modern human civilisation. Monbiot, like his 19th-century missionary and anthropologist predecessors, wraps Orientalist constructions around the Masai and others he “observes,” which do nothing more than objectify them as strange, unchanging primitives. Monbiot’s fantasies, however “progressive” he believes himself to be, express only the desires of the elite class to dominate their environment and all who move within it. Simon Jarrett, Harrow
The left should love Burke In his article (“A conservative in his bones,” June) AC Grayling settles for the same caricature of Burke peddled by his devotees on the right. Burke’s concern for victims of imperial injustices in India and Ireland was unparalleled in his day, though it earned him few friends in Britain (“I know what I am doing,” he wrote, “whether the white people like it or not.”) His political commitments were born not of any indifference to the vulnerable or to social justice but from an epistemic modesty that can be affirmed as readily from the left as from the right. Jennifer Pitts, University of Chicago
Global thinkers I am bemused by your list of top thinkers (May). Seventeen out of 65 (26 per cent) are economists. If these guys are top thinkers why is the world economic system so out of control? One would have thought that all this brain power would be able to come up with a solution. However, I am gratified to see science next: 25 per cent. There’s hope yet! Denis Brook, Huddersfield
Have your say: Email letters@prospect-magazine.co.uk.
Philip Collins poses two major objections to an insurance-based welfare system. One is cost and the other is that such a move would limit welfare’s redistributory powers, which the centre-left values. The cost of an insurance-based welfare system is one which ought to be given over to the contributors to decide. If pensions are to be paid for, adequate long-term care costs covered fairly, and an ever-rising NHS bill met, then costs will rise. In my proposals, taxpayers as contributors would control these budgets, and therefore how much they paid in and received back (in payments and services). To have a fair contributory welfare state also provides the basis for limited but transparent redistribution. Eligibility would be based on financial contributions but, in my scheme, individuals performing functions which society values but for which they are not paid, such as providing care, would have their contributions covered. However, the principle that welfare needs to be earned would remain crystal clear. The advantages to social cohesion are clear. Frank Field, Labour MP
The problem of financing the welfare state is not just financial. Since the Beveridge era we have lost sight of the significance of the contributory principle. This proclaimed a reciprocal relationship based on common citizenship, whereas the Poor Law had reduced its clients to the status of paupers, dependent on handouts. Frank Field’s interesting alternative strategy (“Here’s my answer,” June) is unfortunately premised on alleged chronic budget deficits since 1948 (disputable mainly because of accounting on capital items) and also on his assumption that an insurance model of healthcare effectively checks costs—but just look at the United States! Peter Clarke, author of “Hope and Glory: Britain 1900-2000”
Philip Collins presents a compelling case that contributory welfare will “remain a minority pursuit in Britain”. As he outlines, a state-led approach is fraught with both practical and political problems. The urge for governments of the left to turn contributory welfare into redistribution, and for those of the right to means-test support, makes a collective solution politically unstable. But that does not mean there is no role for the state in helping people to protect themselves against the vicissitudes of the labour market. Individual ‘lifecycle accounts’ would integrate pension and rainy-day savings. Early draw-down to enhance state benefits during periods of unemployment, backed by a network of family and friends ‘guarantors’, would give people contributory welfare: but without the problems Collins identifies. Ian Mulheirn, Social Market Foundation
Philip Collins and Frank Field highlight how means testing has become increasingly dominant in the welfare system. Labour is right, therefore, to ask how the social insurance function can be brought back to the fore. A social security system worth the name should provide protection at key moments in life: losing a job, having a baby, retiring from work. But financing such protection will require reducing demand for welfare and prioritising scarce resources. Graeme Cooke, IPPR
Tough action on tax International co-operation to tackle tax avoidance, through institutions like the G8, is vital (Paul Collier, “Cracking down on tax avoidance,” June). However, there is action the government could and should take at home now: “naming and shaming” of companies and individuals, and opening up the books of Ftse 100 companies to scrutiny, would be a powerful deterrent. Other measures might include policing the tax system more aggressively, by ensuring the Revenue has the right staff with the right skills to challenge the tax arrangements of multinational companies; making tax simplification an urgent priority; denying public sector contracts to companies engaged in aggressive tax avoidance; and drawing up a new code of conduct to prevent big accountancy firms helping government devise tax law and then advising their clients how to get round it. This is the kind of tough action we need from the Prime Minister, whatever the outcome of the G8 summit. The fight against tax avoidance must be fought on both fronts. Margaret Hodge MP, Chair of the Public Accounts Committee
Paul Collier’s article highlights the difficulty in judging what is appropriate tax planning on the part of a corporation. The Italian multinational, Fiat Industrial, recently announced the decision to move its location from Italy to the not-well known “tax haven” of Basildon in the UK. The move is to achieve a lower tax cost for the business, from Italy’s corporate rate of 31 per cent to the UK’s lower rate, which is planned to be reduced to 20 per cent by 2015. Is this an example where, as Collier suggests, there should be “public condemnation of those who pay low tax,” or an example of the reality, which is that a company will generally seek to minimise expenses, and that tax is a business expense? Andrew Christensen, online
Erm, no It is a pity that David Frum spoiled his otherwise excellent review of Charles Moore’s superb biography of Margaret Thatcher (“Voice of the future,” June) by asserting that the issue that precipitated her fall was her refusal to set a timetable for British entry into the European Exchange Rate Mechanism. She was in fact Prime Minister when Britain entered the ERM in October 1990. And her objection to setting a timetable for Britain to enter the euro was never a problem, as the opt-out enshrined in the Maastricht Treaty demonstrated. David Hannay, House of Lords
Time after time Jessica Abrahams’s excellent article (“A life sentence,” June) highlights one of the weakest links in the rehabilitation revolution. As a mentor to several ex-offenders struggling to find work I am acutely aware of the barrier to employment caused by the requirement to disclose ancient convictions. The solution is to carry out a root and branch review of the Rehabilitation of Offenders Act 1974, which established the principle that convictions can become spent. The problem, even after last year’s adjustments to this act, is that the restrictions on being eligible for legal rehabilitation are too tight and the qualifying periods are still too long. Ex-offenders who comply fully with the new probation regimes should be incentivised by fast track opportunities to have their convictions “spent” more swiftly. Jonathan Aitken, former MP
Jessica Abrahams is quite right to highlight the many ways in which criminal record disclosures can hinder people getting on with their lives. A good next step in reforming the system would be to consider the plight of those convicted of crimes while children. Only a very few children commit such serious offences that they will remain of interest to the authorities in later life. For the rest, wiping the slate clean upon turning 18 would ensure that young people already struggling in the current economic climate do not face additional obstacles to a stable and productive adulthood. Andrew Neilson, Director of Campaigns, the Howard League for Penal Reform
Introduce online voting All of Lucy Webster’s points about wheelchair accessibility at polling stations are valid (“Get us to the ballot box,” June), but I wonder whether she goes far enough. My local polling station in Milton Keynes is “reasonably accessible” to me (as a wheelchair user). Nevertheless I have long opted for a postal ballot, mainly because I can’t physically fill in a ballot paper without assistance. In other words, I not only have to tell someone else how I wish to vote, I also have to rely on them to place my cross in the right place. This is far from ideal, but it is more dignified to do it in the privacy of my home than in the public space of the polling station. The ability to vote online or via a smart phone seems to be some way off in the UK. However, this would be another significant step forward in allowing disabled people to exercise their democratic right, via a ballot that is truly secret. John Durkin, Buckinghamshire
No shock here In his review of new books on the challenges China is facing today (“The shock of the truth,” June), Jonathan Mirsky maintains that if these books were allowed into China, Chinese readers would be “astounded” by the “damaging judgements” of these western experts. My observations and discussions with Chinese friends in Beijing bring me to a different conclusion. The issues the books raise—environmental degradation, decaying social morals, historical amnesia—are the same ones that Chinese people are struggling with on a daily basis. Much of the Chinese public these days harbour little illusion about the woeful state of their society. Similar diagnoses from western voices will more likely offer them an affirmation of their own judgements than give them “the shock of the truth.” Helen Gao, Beijing
Jonathan Mirsky's review contains a helpful antidote for the rash of what Perry Anderson dubs "Sinomania.” All three works reviewed take note of China’s impressive economic growth, whilst expressing discomfort about the pairing of expanding capitalist markets with a staunchly authoritarian political system. Of course, it was not that long ago that authoritarianism and rapid economic growth were widely believed to be happy bedfellows. Democracies, the argument went, diverted resources from investment into consumption. We now know that although annual GDP growth rates under dictatorships can exceed those of democracies in the short term, they are also more vulnerable to greater fluctuations due to their internal fragility. The rude “shock” of Mirsky’s “truth,” therefore, lies less in the Chinese Communist Party’s sins, than in the dangers of a global economic system so focused by the bottom line that we will soon find that when China sneezes, the rest of us will catch far more than a cold. And, as Mirsky’s review shows, China is hardly in rude health. Patricia Thornton, University of Oxford
Monbiot’s wild imagination George Monbiot’s strange fantasies about a return to the wild and the “rediscovery” of his atavistic instincts (“Call of the wild,” June) perhaps tell us more about their author than about humankind. As Walter Russell Mead has argued in Prospect (“The last savages,” February), today’s globalised urban dwellers are the true inheritors of the curious, acquisitive Stone Age groups who laid the foundations of modern human civilisation. Monbiot, like his 19th-century missionary and anthropologist predecessors, wraps Orientalist constructions around the Masai and others he “observes,” which do nothing more than objectify them as strange, unchanging primitives. Monbiot’s fantasies, however “progressive” he believes himself to be, express only the desires of the elite class to dominate their environment and all who move within it. Simon Jarrett, Harrow
The left should love Burke In his article (“A conservative in his bones,” June) AC Grayling settles for the same caricature of Burke peddled by his devotees on the right. Burke’s concern for victims of imperial injustices in India and Ireland was unparalleled in his day, though it earned him few friends in Britain (“I know what I am doing,” he wrote, “whether the white people like it or not.”) His political commitments were born not of any indifference to the vulnerable or to social justice but from an epistemic modesty that can be affirmed as readily from the left as from the right. Jennifer Pitts, University of Chicago
Global thinkers I am bemused by your list of top thinkers (May). Seventeen out of 65 (26 per cent) are economists. If these guys are top thinkers why is the world economic system so out of control? One would have thought that all this brain power would be able to come up with a solution. However, I am gratified to see science next: 25 per cent. There’s hope yet! Denis Brook, Huddersfield
Have your say: Email letters@prospect-magazine.co.uk.
