This is a crazy idea which has been drip fed by both sides for a really long time (for examples of labour supporters who have been helping with that feed see, for example, Polly Toynbee's many articles on the subject).
Universal benefits have many advantages. Take up is really good. That is not true for means tested benefits and there are many people who struggle to get by on less than they need because they do nor apply for means tested benefits: they often do not know about them: or they are shamed by the need to apply: lots of reasons. A lot of the research has been done on pensioners: but the problem applies across the board. This has been known forever: but as the second link shows it is hard to get a picture of the current take up because of the incredible speed and complexity of the changes to the benefits system over many years
https://lra.le.ac.uk/handle/2381/4416
http://php.york.ac.uk/inst/spru/research/summs/variations.php
http://www.cpag.org.uk/press/261006.htm
A second benefit has already been mentioned and was the original reason for the introduction of CB in the first place: it is paid directly to women, unlike the tax allowance which preceded it. It had to be a universal benefit because many women have time out of the work place when they have children: and so they had no tax to pay and no means of getting a credit. This matters because total financial dependency is nto a good thing even when things are going well: it is a disaster if your partner happens to be a gambler or a drug addict or whatever: CB is small buffer for the children in that situation. That is not to say that all who abuse the money intended for a family are men, btw: it is to say that children have a chance of having one relatively responsible parent: if it happens to be their mother there is not a lot she can do if she has no money coming in at all. And given that out of work benefits are means tested after 6 months that is her situation very often if the partner is in work: given they are paid to one partner, and that is by default the man when both are out of work the same problem applies. The claimant can be transferred for cause: but it is not often easy to do it.
That arises from another problem which has already been mentioned: means tested benefits are extremely expensive to administer. Universal benefits are not. That is one of the reasons the government is trying to unify tax and benefits and have them all eventually administered by HMRC. Unifying the system is not a bad idea in itself: if it was being done for the good reasons which exist I would support it. But it isn't. It is being done to save money.
I have some direct experience of the transfer of benefit administration to HMRC and I can assure you that it is a disaster for the poor. HMRC has no history of paying out. One of the consequences of that is they have no mechanisms for doing it. And another is that they have no sense of urgency at all. So if a person's child tax credit does not arrive, or needs to be changed, or whatever, there is no way to get an emergency payment: they don't have way of doing that. When benefits were dealt with by DSS (now DWP) they had local offices and they had money and they had a means of making emergency payments. It was humiliating but it was essential: gone. If the problem arises through tax credit the DWP won't help: they are not allowed to. And when you try to sort the problem out with HMRC they blithely say they will have it fixed in 6 weeks. And they can't or won't speed it up. I am friendly with some tax officers and they know it is rubbish (though it is a little better than it was when they started) and they are not happy about it. This is not a neutral act and it does not transfer a service from dept to another: it reduces the service to a one size fits all approach, which takes its own sweet time. The result is not a saving: it is a cost. But the cost is passed to local government because the social work department has to support families while this is going on. SWD is not a benefits agency nor is it a tax agency: it has no budget for this but it does have a legal obligation. It was this that led many SWD's to employ welfare rights officers and they did a great job in the past on take up and appeals etc: but in most cases where they were broadly successful (eg in addresssing take up) the government changed the law so that the outgoings did not rise for long. Still, the burden on SWD's did fall and it was worth while because the money was paid by the right dept, at least most of the time: that will no longer be true. SWD cannot pay out at benefit levels: and so I find myself back to a position of delivering bags of food to people who are desperate: I really resent that use of my time: and what it does to my relationship with those people: and the way it prevents me from doing my real job. Back to the days of the almoner and all that that entails. Way to humiliate people and to waste resources which should be going on other things and to blame the local authority for overspend and on and on and on. I am coming to hate my job because of this kind of thing amongst others.
There is another consequence: HMRC is already seriously underfunded and understaffed. That is not an accident and it increasing as well. It will get worse for they will have to take their share of cuts too. Billions of pounds are not collected in tax and this is also well known. Every tax inspector involved in enforcement brings in much much more money than they are paid in wages: I mean really a lot more. If the mantra that we should adopt private sector values into public service was actually true what would we do? I suggest we would continue to employ more tax inspectors until they income broke even with the costs of that employment. But we don't. I think that tells you something and it makes me spit, frankly. Lot of hand wringing about unpaid tax: not the simplest action to address it, though. Not following the private sector in that particular part of the forest. Combining tax and benefits will make that worse too: I wonder who the winners and losers will be? Not much of a mystery there, IMO
In recent years there was a move to include all income in the tax system and that included benefits (many years ago they were not taxed: now all but the universal benefits are). It is interesting that poor people's benefits count as income yet those which are also paid to the rich are not, isn't it? So are we going to change that? If we really must make savings there that is the way to go: it is universal so it is easy to count it as income and easy to tax it. As with other benefits we can assume it is claimed (and that assumption can be made even if a benefit is not claimed, but that is another topic). So we could tax universal benefits at 100% if we had such a tax band: but we can't because any suggestion of increasing tax in that way causes fits of the vapours. Not when such marginal rates of tax apply to the poor of course: we have lived quite happily with that and indeed we have used it to justify characterising them as feckles: they don't move into work because it is a "lifestyle choice". It is. It is exactly the same "life style choice" as rich people who move their money abroad to maximise their income make. But with rather more justification, again IMO. There is much talk of making sure that work pays: and all governments have made those noises and have done things to try to make it happen: but they have not set the minimum wage at a level which would achieve that: rather they have tended to either cut benefits below what is reasonable as a sum to live on (and they are really low and have been falling in real terms for most of the last thirty or forty years): or they have decided that the tax payer should top up wages thus driving good employers out of business if they do not also pay poverty wages. I welcome the minimum wage: but it is very far from a living wage for most. Yet propose it and business screams: suggest increasing it and the same happens: so I do not think that the idea of "ensuring work pays" is going to translate to a higher minimum wage: I will be pleasantly surprised if it does.
