APPENDIX 10
Memorandum submitted by the British Housewives
League (CP 8)
Thank you for inviting us to submit evidence
to your Committee on social security and the contributory principle.
As we do not have the expertise to advise on technical aspects
of social security we will restrict ourselves to looking at more
general issues as suggested by your own list of headings.
1. BACKGROUND
1.1 The purpose of a state run social security
system is to provide a safety net against deprivation, hunger
or homelessness and to bring social harmony. Provided we can maintain
a buoyant economy it is both possible and prudent to ensure that
no one goes without the essentials required for a decent standard
of living. Voluntary efforts to provide for those suffering hardship
are likely to be insufficient to meet all needs and in a society
which expects its citizens to be purely self-reliant there will
be many who are unable to provide for themselves without some
assistance. The welfare state has gained acceptance as an insurance
policy against the misfortunes which can affect anyone—ill
health, an inability to find employment, redundancy, mismanagement,
death of the breadwinner or family breakdown, victims of bad debts
or fraud.
1.2 As social security has become entrenched
so have memories of living without such support faded and the
stigma attached to receiving the charity of ones fellow citizens
is no longer felt because of the contributory element in the system.
Those who draw benefit are likely to treat such support as theirs
as of right, even though it may have been their parents rather
themselves who have made the contributions. Because it is perceived
to be a contributory system, withdrawal of benefits at this juncture
could cause resentment amongst those who have, in conjunction
with their employers, spent a lifetime paying their "national
insurance".
1.3 It is left to governments to determine
what the taxpaying public can reasonably afford through a graduated
system of taxation and national insurance. Adjusting tax and benefits
to allow individuals to maintain their self respect requires fine
tuning. Those who are impoverished must be able to improve their
standard of living by their own efforts and not see social security
as a permanent option. A combination of a stable economic environment
and social stability could relieve the pressure on the social
security system.
2. CONTRIBUTORY
PRINCIPLE
2.1 A state run insurance policy linking
tax and benefits is but one way of providing security against
hard times. Obligatory private insurance policies would inevitably
leave many people outside the system as only those who are affluent
enough to contribute would qualify for the benefits; a compulsory
system of private insurance, like one administered by the state,
would not necessarily be immune from weaknesses of its own.
2.2 Those who put the most into a compulsory
state-run benefits system linked to graduated taxation are likely
to take the least out. The state has not ringfenced national insurance
contributions for the benefit of those who have contributed but
has used it as a general source of taxation. Inadequately managed
state bureaucracies tend to be inefficient, wasteful and subject
to fraud. State benefits provide only a basic living allowance
if and when hardship strikes.
2.3 SERPS were an attempt to relate benefits
to earnings but these are being phased out. Private insurance
in a competitive market is likely to produce a better return to
the insured, but does not provide for the uninsured for whom the
taxpayer would still be called on to provide a safety net.
3. CURRENT DEVELOPMENTS
3.1 Since the Single European Act, which
inspired so much of the single market legislation, came into operation,
the European Community has been developing social as well as economic
policies of its own. This affects Parliaments freedom to act because
economic and social cohesion is being exercised not at a national
but a European Community level, and EC directives have to be taken
into account when we consider the social policies of this country.
These are affected by:
3.2 Council Directive 89/48/EEC on the mutual
recognition of diplomas. This opened employment to nationals of
all member states.
3.3 Article 8 of the 1992 Maastricht
Treaty created EU citizenship and Protocol 14, Article 1 of
the same treaty guarantees social protection for all EU citizens,
whilst Article 2.3 allows the Commission to put forward proposals
relating to social security and social protection of workers,
subject to the national veto. Article 5 directs the Commission
to encourage cooperation between the member states and to facilitate
the coordination of their action in all social policy fields which
come under the Protocols Agreement.
3.4 The Amsterdam Treaty which came
into operation on 1st May confirms this trend [see Article 137.3
and Article 140 of the Consolidated Amsterdam Treaty].
3.5 Because workers are expected to be flexible
and mobile within the European Union it is no longer realistic
to run a system of social security on purely national lines. Frontiers
are being eliminated and once a person has established his credentials
as a citizen of one member state he is entitled to establish himself
in another. An over liberal social security system in any one
country would attract economic migrants from across the whole
European Community. Linking benefits to contributions has therefore
become a necessity, otherwise the taxpayer will find himself committed
to contributing to open ended charity.
3.6 There appear to be two options; either
(1) to have a state run social security system linking the tax
and benefits system or (2) social security run on a voluntary
basis through private insurance policies. The second option leaves
the poorest and most vulnerable unprotected except for voluntary
or family support or means tested provision from general taxation.
3.7 The parameters of the taxpayers obligations
and the purposes for which the social services are to be used
need defining. People whose families have contributed nothing
can draw on our social security system without first contributing.
Fraud and misuse of an over-generous benefits system is a drain
on the energies of the taxpayer.
4. WELFARE DELIVERY
4.1 In his policy statement Modernising Government
the Prime Minister says he has a mission to modernise, and one
such modernising programme is the greater application of electronic
information technologies by the government to services delivered
by the state, including the social services. It is suggested that
all dealings with government will be delivered electronically
by 2008 and that information which is personal to the individual
and relevant to the delivery of services, and therefore of interest
to the state, should be stored on an identity card using the smartcard
technology. Presumably this card would be valid across all member
states which would include the new recruits from Eastern Europe.
An identity card which is linked to citizenship and which can
be used as a travel document across the whole European Union has
alarming implications.
4.2 Smartcard technology could be used to
create what is described in the White Paper as joined-up government,
to integrate government across national frontiers. When Parliament
investigated the use of smartcard technology in 1994 the Data
Protection Registrar pointed out that the linking of files could
lead to the replication of errors. If nothing else, this must
have human rights implications. The Home Affairs Committee early
in 1996 investigated the use of ID cards and discussed civil liberties
on that occasion and came to the conclusion that the benefits
would probably outweigh the disadvantages, but smartcard technology
will keep advancing and the implications need to be reviewed in
the light of such advances. The European driving licence is already
a fact and a European identity card which includes personal details
such as medical information and credit rating may prove to be
a step too far.
May 1999
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