In my view, the British welfare state suffers from two key failings. One is that it fails properly to reach or address the needs of an important class of the socially excluded. This is an important issue, discussed for example in Iain Duncan-Smith’s Breakdown Britain and Breakthrough Britain reports, but I shall not discuss it further here.
The other key failing is that the way the welfare state works offer very little scope for working class and middle class people to prioritise their spending and saving so as to choose to receive more-than-average amounts of public services. I have a relative who, in a foreign country in the 1960s, had her daughter go to a good school and later to university. To help fund this she used to rise each morning at 5am and chop wood. Other well-known practices include the jam jar into which savings were placed to pay the doctor if someone fell sick. Throughout the ages the idea that parents might sacrifice something so that their children might have more opportunities — better health treatment, better education, and so on — than they did has been rightly seen as a definitive element of good parenting. Similarly, providing the best care in old age that we could manage ourselves or otherwise afford has been seen as a key duty of children to their parents.
But the current welfare state offers very limited opportunity for these expressions of love and social bonding. Indeed, there are many people that would argue that the point of the welfare state is to eliminate this — they don’t want some children to be better educated or some people to receive better healthcare because those that loved them were more prudent or more prepared to engage in self-sacrifice. This even extends to the Conservative Party. The worst element in David Willetts’ well-known speech earlier this year was his suggestion that a weakness of the current system — which he considered particularly amplified in the case of grammar schools — was the scope it gives for middle class parents to enable their children to do better by focusing more effort and resources on them. He did not, of course, as some commentators at the time rather crassly implied, criticize the parents themselves for doing this. But he did, squarely and unambiguously, consider the education system weaker to the extent that it granted more opportunity for this.
I suspect that this was a momentary aberration in David Willetts’ case, but in general it reflects a wider error, common now in Conservative circles: the belief in the mantra of “equality of opportunity”. I shall not beat around the bush: I consider the concept of equality of opportunity ethically wrong and practically destructive. It is among the worst policy visions ever developed. Understood properly, it is the idea that each of us should succeed or fail purely on the basis of his own biological merits. If you are beautiful, clever, witty, and healthy, you will get ahead in life. If you are ugly, stupid, bad-tempered, and unhealthy you will fail, and no-one is allowed to help you. The normal bonds of human compassion and love, whereby we try to get our children a better education, or our nephew a first job, to accommodate the blinded former soldier in our amateur dramatic production — these are all rejected in the Nietzschean dystopia of “meritocracy” (a word invented by Michael Young, author of Labour’s 1945 election manifesto, for his 1958 satire “The Rise Of The Meritocracy” attacking the concept).
No Conservative should favour such a society — for Conservatives value family, Church, philanthropy and community. Our picture is one in which people are encouraged to help those they love, not forbidden from doing so. Despite the unfortunate statements made in the recent past by certain prominent Conservatives in their more “Thatcherite” moments, and despite David Cameron’s recent claims that promoting equality of opportunity characterized his own programme, true equality of opportunity cannot be a goal of a Conservative. (Surely David Cameron cannot have intended us to take his claim literally! Presumably he meant something like “equally, all shall have opportunity” rather than “all shall have equal opportunity” — unless there is some plan I haven’t heard about to introduce swingeing inheritance tax rises and abolish private education?) We are all familiar with the supposed contradiction between equality and liberty. But I believe that the more important contradiction is that between equality and love.
If I am right, then it should be clear that our welfare state presents a significant problem. Under the current system it is very hard for people to help those they love to get ahead when it comes to public services. Expressed more mundanely than the overwrought rhetoric above, a practical form of what I’m talking about comes down to the problem of additionality: it is very difficult to buy additional healthcare or education or pension or unemployment insurance or sickness insurance or additional amounts of any of the other state welfare benefits and yet only pay the incremental cost of that additional provision. What the wealthy do is, for example, to buy their children private education. But they still pay the taxes that would fund their children for state education. So their private education fees do not merely cover the additional cost of the higher quality of education they purchase — instead they pay the whole education cost, “paying twice” for state-standard education plus the additional cost for the incremental value.
One well-known mechanism to enable people to pay only the incremental cost for additional service is a top-up voucher. In such a system people are able to port the funding they would receive for the state-provided service and spend it, adding their own money as they see fit, with private providers. The Conservatives have proposed such a system for education in the recent past, though with the wholly misguided restriction that topping up with one’s own money was forbidden (thereby destroying the main merit of the scheme and rightly making it seem ludicrous in the eyes of the media).
However, vouchers also have another function — that of changing the basis of state support for public services, so that the state is funder but not necessarily provider, and giving people choice of product provider as well as choice of type of product. This creates a “horizontal” dimension of consumer choice — between providers of nearly the same service — as opposed to the “vertical” choice between fundamentally different levels of service that I believe is essential. For certain public services increasing horizontal choice may be a useful reform — and indeed Labour itself accepts this principle now in health and education. However, I believe that at a fundamental level it is a separate type of reform from that I have argued for above. It would be perfectly possible to have the state as a funder and monopoly provider of public services that, nonetheless, offered scope for people to purchase above the state’s own minimum level of provision.
Here is an example: Suppose that a Conservative government were to specify precisely what one is entitled to in the way of healthcare — including standard of hospital care, drug availability, waiting times for appointments and operations, and so on. Then one would buy that level of healthcare from the State — a contracted legal entitlement. If one wanted shorter waiting times, access to drugs not on the state’s formulary, and so on, then one could purchase a more expensive grade of care — all from the State. Similarly, there would be no problem in principle with having the State provide more expensive schools that parents could pay extra to send their kids to. And, again, the State could provide the facility to purchase higher levels of unemployment insurance, sickness insurance, or pensions — from the State, without having to start again from scratch.
I value choice over provider — as I have argued in a previous column, the presence of such choice benefits everyone, not just those that exercise their choice. But I consider it a more fundamental problem that ordinary hard-working people lack choice over type and amount of public service than that they lack choice over provider of the same near-universal-standard product. I hope that a future Conservative government will make it a high priority to correct this.