Jenny Willott writes: Is Citizens’ Income the answer to the failures of our social security system?

I recently wrote a piece for Lib Dem Voice about “Mending the Safety Net”, the policy paper on social security which will be discussed at conference in Brighton.  One of the issues raised in the comment on the piece was, understandably, why the group ended up not supporting a move to a Citizen’s Income.  Rather than a long comment on the original piece, I thought it would be helpful to explain the groups view in a separate post.

In a nutshell, the Citizen’s Income pays the same amount to every resident, regardless of whether they are in work or not.  There is no means testing and no conditions apply to those receiving the payment.  Every citizen receives the same amount, although in some schemes there are different amounts for children, working age adults and pensioners.  There are a number of different monikers and different ways of doing similar things, such as Negative Income Tax and Universal Basic Income, most of which we looked into, but for simplicity I’m just going to refer to ‘Citizen’s Income’ throughout.

At first glance it seems simple and easy to administer, and could help put an end to the divisive ‘them versus us’ narrative that has infected the debate on welfare.

That is why I and many others on the social security group were initially very attracted to the idea. We read a lot about it and invited a number of people who have advocated the policy to give evidence to the group. 

Like a lot of people who responded to the survey produced by the working group, many of us still find the theory of Citizens’ Income attractive, but once we started investigating the details, however, it quickly became clear that the Citizen’s Income simply wouldn’t work in practice.  One of the great things about the Party’s system of working groups, is that it allows us to really dig down into the detail of a policy, rather than our initial reactions.  I’ve always believed that the fact that Lib Dems work to develop policy that can work in real life sets us apart from so many other parties.

The main problem is that different people have very different needs, which a single rate of benefit can’t support.  Housing costs differ significantly across the country, family sizes vary, and those will disabilities need more to live on than those without. This means it is effectively impossible to set a level of Citizen’s Income that ensures everyone has enough to survive.

Most proposals for a Citizen’s Income set the amount at about the same rate as currently paid in Jobseeker’s Allowance – around £70 a week.  But that’s just not enough to support the many disabled people who face higher living costs as a result of their condition. The highest rate of Disability Living Allowance is currently set at £139.75 per week – far above where most proposals for a Citizen’s Income are set.  Those currently receiving disability benefits would therefore lose out hugely, even though they are precisely the people who most need support, and who can least afford have it reduced.

Similarly, our housing market means there are huge differences in housing costs from area to area. If you are in inner South East London, a three-bedroom house costs £330.72 a week, whereas in Merthyr Tydfil the equivalent property is £87.75 a week. The UK has far more variety in the cost of housing than those countries where Citizens’ Income has been tried.

If you want to keep the simplicity of a flat rate benefit, then it either has to be set high enough to ensure people can afford to live in more highly priced areas, which becomes extremely expensive, or it is set at a more affordable level, in which case no-one who is living just on the Citizen’s Income could afford to live in London and the South East, or in a number of other cities around the UK.

There are also challenges relating to different types of family.  With a flat rate per adult, a couple does better than a single parent, which could have worrying implications for child poverty.

The system can be made more complex to reflect differing housing costs across the UK, and different family make-up, and disability, but it then loses the simplicity which is the whole point of the Citizen’s Income.  Complexity also makes the scheme much more expensive to operate.

And the overall cost of a Citizen’s Income is another serious problem with the policy.

The UK currently spends about £214 billion on benefits.  Divided equally, that’s a Citizen’s Income of just £3,300 per person each year.

If the entire cost of delivering the current system was abolished this would allow each person to receive only £13 more – giving a total Citizen’s Income of £64 per week.  This is compared to the average amount paid to households in receipt of tax credits and benefits of £7,500 in 2010.

The only way that amount could be increased to a level on which people could survive would be through tax increases or cuts to other services.

Even the biggest supporters of Citizen’s Income accept that significant tax hikes across the board would be required to provide a decent level of Citizen’s Income.  As a result, those on lower incomes could actually lose out under the system.  The most fully formed model that was presented to us, from the Citizen’s Income Trust, proposes a rate of £71.70 per week for adults, £56.80 for children and £145.40 for pensioners as well as retaining separate Housing Benefit, Council Tax benefit, DLA, PIP, Carer’s Allowance and maternity pay.

Such as system would require a 5p increase in all income tax levels, the abolition of personal tax and National Insurance allowances entirely, and a hike in National Insurance for middle and higher earners. Even after all this, and assuming huge administrative savings within DWP, the system would still be short by £2 billion, which would have to be found from other public services.

These tax increases would hit ordinary people, not just the best off.  In the modelling given to us, almost 1 in 3 of the poorest households would actually lose over 10% of their income.  On this model, a single mother in Kettering with 2 children, one of whom is disabled and for whom she acts as a full time carer, would lose around £6,000 a year.

A single father with two children in Eastbourne who earns £15,000 before tax would lose almost £2,000 under the same system.

That can’t be an outcome Lib Dems want to see.

The aim of a Citizen’s Income is good: we all want a system that supports everybody’s ability to choose what they do with their life.  But we are a political party who have a responsibility not just to accept good aims, but to see how they would work in practice for the people we want to represent.

The simple fact is that in every model for Citizen’s Income that we examined, the choice was between a Citizen’s Income that is affordable but set at a level so low that vulnerable households would see their income fall, or set so high as to require huge tax rises for everyone – including the lowest earners.

So ultimately the Working Group decided we couldn’t support the policy.  We didn’t all agree, but almost everyone who started out supporting a Citizen’s Income ended up believing that having seen the evidence, it just wasn’t workable. The idea is noble, I like it a lot in principle, but I just don’t believe it would do what we want it to do in the UK in 2016.

* Jenny Willott was the Lib Dem MP for Cardiff Central and chaired the working group on working age social security policy in 2016.

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65 Comments

  • George Potter 1st Sep '16 - 12:19pm

    The most glaring error in this article, is Jenny Willott’s assumption that the core principle of Basic Income is paying everyone the same flat rate.

    It’s not.

    The core principle is providing support to everyone unconditionally – whether that support comes in the form of a uniform flat rate or not depends on which model for implementation (of which there are several) you use.

    I could live with the policy paper if it rejected conditionality (e.g. the system where people ate forced to jump through bureaucratic hoops or face being left to starve if they fail to jump through them well enough) in favour of providing unconditional support to those in need – which is the core principle behind support for basic income.

    But instead the paper actually comes out in favour of retaining conditionality and benefit sanctions and therefore continues to support the principle that there are “undeserving” poor people who the state should abandon to homelessness and starvation.

    I cannot see how that is in any way liberal or inkeeping with our party’s values.

  • ‘The simple fact is that in every model for Citizen’s Income that we examined . . . ‘

    How many were examined? Which models were examined? Why not favour a pilot of CI to see how it would work in the UK context if we are really interested in evidence as a party? After all Jenny’s and those members of the working group who rejected a CI object, from what I can gather from this piece, on practical grounds and not on a point of principle.

    It’s a big and important idea and the fact that Jenny has written over a 1000 words saying why she is against it suggests Jenny agrees with that. Why, therefore, not at least be in favour of gathering evidence from a pilot regarding it and then making a decision as a party? Other countries are planning pilots, such as the Netherlands (or part of it), so why not us as well? Or are we all so sure that we know all the answers already?

  • Jonathan Ferguson 1st Sep '16 - 12:32pm

    I have some questions, as a proud non-expert on economics!

    1. Could quantitative easing assist with the difficulty of funding UBI?

    2. Quantitative easing does risk inflation, which might end up cancelling out the positive effects. Are there any plausible ways of mitigating this problem? E.g. by focusing on the rate of quantitative easing, adjusting interest rates, reducing or restraining the amount of pre-existing money in circulation (i.e. anything that hasn’t just been printed), or partially isolating the new money printed and/or slowing down the circulation by direct or indirect means?)

  • Adam Bernard 1st Sep '16 - 12:53pm

    I agree with Andrew Hickey. I am left with the lingering suspicion that were the NHS not currently in existence, the article above would be arguing that it was not appropriate to instantiate it.

    We don’t insist that people be working in order to receive lifesaving (or life-improving) medical treatment. We should not insist that people be working (or jumping through the ridiculous DWP hoops to demonstrate that they are looking for work) in order to have a roof over their heads and enough food to keep them from starving. Retaining conditionality and sanctions is the very essence of that meanness of approach.

  • This was a green party manifesto policy and they had a working group too, results of which are here…
    https://policy.greenparty.org.uk/assets/files/Policy%20files/Basic%20Income%20Consultation%20Paper.pdf
    I wonder how our conclusions differ from this….
    Total cost of Basic Income scheme 331 £billion
    Benefit savings -164
    Abolition of personal allowance -90
    Running cost saving -8
    Saving on negative tax credits -3
    44% reduction of reliefs on pension contributions -18
    Removal of lower National Insurance threshold -22
    Removal of upper National Insurance threshold -26
    Total savings -331 £billion

  • Not an expert, but my guess is that had this article formed part of the working group paper, the tone of the debate would have been better.

    I’m with those saying that we have to make sanctions a red line – I’ve had a couple of awful examples of casework in my ward. That would do more than anything else to mend the safety net – we should speak against leaving people with nothing to eat and sanctions are the most direct way the Government does this.

  • Lucy Nethsingha 1st Sep '16 - 1:20pm

    Thank you Jenny for a very clear summary of the conclusions of the working party. I sat on this working group and was one of those on the group who were very positive about the Citizens Income at the start of the our investigation. However the more we discovered about the options relating to any type of Citizens Income, the clearer it became that there were just too many losers if we were to move to that system. The problem is that the current system is complicated because it tries to target support on those most in need. The Citizens Income is not complicated, but it fails to target support, and thus those who loose are likely to be those with the highest needs, particularly the disabled and those with young families.
    It would be possible to introduce a system where there was a basic Citizens Income, set at a very low level, with a whole bunch of top-up benefits which would be added on to make it possible for people to live, but that would negate the main point of moving to a Citizens Income.
    The point George makes about conditionality is not entirely the same question. It would be possible to reduce the conditional elements in the current system of Universal Credit. The working group did spend quite a lot of time discussing conditionality, and there was a strong view from other members of the group that some type of conditionality was needed to retain public support for the social security system. The working group also tried hard to come up with more supportive and less punitive ways of retaining some type of conditionality. I think the argument about how we treat those on benefits is extremely important, but it could be tackled within the UC system.

  • Lorenzo Cherin 1st Sep '16 - 1:29pm

    As George ha clarified that even if we stayed in the EU , in his and other opinions, it would be possible to have a basic income for all permanent residents , I would now consider it .

    I favoured it once upon a time , but feel now , or did once the immigration levels increased significantly , that it would be impossible and a magnet.

    As someone whose father settled here from Italy , it is immigration that puts down roots here that I am happy to see as part of our welfare system , but otherwise , not so, not at all. We cannot have refugees who are genuine and suffering, made scapegoats by thousands of economic migrants who would be very drawn to the notion of a basic income and the right to work too!

    Holism is , for me ,Liberalism that is thought through. It is the only kind I want. If we can legally have a citizens or PERMANENT residents basic income conditional on marriage partners or residents of five plus years , fine , it is better than the in the sycophancy to second rate job centre martinets , deciding peoples fate , appalling !

  • George Potter 1st Sep '16 - 1:29pm

    To add something further, as I recall the working group discussed precisely one model of Basic Income – one by the Citizens Income Trust which I will happily say is not a particularly good model.

    However, we did not discuss the numerous other models which have been proposed by other bodies such as the Royal Society of Arts. Nor did we look at the models in use in basic income trial schemes past or present (Canada ran a “Mincome” trial in the 70s which didn’t use a flat rate for everyone but used variable payments based on the poverty thresholds for different household sizes, for instance).

    Nor did the working group reconsider the issue after the consultation and survey results showed significant support for the idea by members. The decision was made very early on in the workin group, on the basis of one particular model, that Basic Income was a bad idea and at no point was that view reconsidered or different models looked at.

    That does not represent detailed, considered policy making in my book, despite what Jenny Willott might say.

  • Adam Bernard 1st Sep '16 - 1:33pm

    Lucy: you say “some type of conditionality was needed to retain public support for the social security system”. Could you elaborate?

    We’re heading into a scenario where it’s possible for machines to do a large proportion of the work currently done by humans, and the current government response is to encourage make-work jobs and to force (under threat of starvation) the poor to make increasing efforts at competing for the remaining jobs. Sooner or later the public (and maybe even eventually the tabloids) are going to need to come round to the idea that joblessness is not a vice requiring punishment.

  • George Potter 1st Sep '16 - 1:35pm

    But in fairness to Jenny Willott, if you look at only one model of Citizens Income which proposes a flat rate payment, if you say that Citizens Income must also act as a replacement for housing benefit, if you insist that there can’t be a penny of extra spending on social security and that the public won’t possibly stand for giving people unconditional support, then yes I’d agree with her that Citizens Income won’t work in practice.

    If, however, you change some of those core assumptions then I’d give you a very different answer. The problem was that the working group never really questioned those core assumptions and after that the outcome was inevitable.

  • George Potter 1st Sep '16 - 1:37pm

    @Lucy

    Maybe we’ve got different recollections but I distinctly remember the policy paper saying that sanctions are bad but that we’ll keep them and make up for it by giving an extra £10 a week to those claimants who work really, really, really hard at proving they’re looking for work.

    Am I wrong or is that not the policy we’re proposing?

  • Zack Polanski 1st Sep '16 - 1:42pm

    Thank you to the working group for giving your time and energy to this – and thanks Jenny for your thoughtful response.

    I do feel though that if the Liberal Democrats aren’t rejecting conditionality, they’ve really lost their way.

    I’d be in favour of a universal income – sufficient but not necessary.

    Conditionality though is entirely necessary.

  • I am alarmed to now learn that only one model of CI was looked at by the working group. But then I suppose ‘The simple fact is that in every model for Citizen’s Income that we examined . . ‘ sounds a lot better than ‘The simple fact is that in the single model for Citizen’s Income that we examined’.

  • Zack Polanski 1st Sep '16 - 1:43pm

    Typo – rejecting conditionality is entirely necessary!

  • For those with a serious interest in a CI I would suggest reading ‘Basic Income: An Anthology of Contemporary Research’ which can be purchased from Amazon. It is, however, expensive. It includes some recent research having been published as recently as 2013. I wonder how many members of the working group consulted it before passing judgement against a CI …

  • Jenny Willott 1st Sep '16 - 2:42pm

    I’m glad that there is a real discussion going about CI, but I have to challenge one of George’s assertions. It simply isn’t true to say we only looked at one model: the Working Group had evidence on the Canadian mincome experiment, took oral evidence from the Citizens’ Income Trust and the Adam Smith Institute on Negative Income Tax, had a phone conference with a member of our sister party in Finland about the pilot they are running there, considered the RSA paper and looked at various models of both CI and NIT. In addition I, and I’m sure other members of the group, did a huge amount of reading around the subject to make sure we were as well informed as possible on what is an important and complicated subject.

    We considered flat rate options and proposals for tiered payments, but as I explained in the original article, and as Lucy has laid out, the more add-ons you build into the system the more it becomes like the current system and the more expensive it becomes.

    If the only reason for a CI is to get rid of conditionality, as George seems to be suggesting, then you can get rid of that in the current system, but as Lucy says, after much debate, on a number of occasions, the majority of the group decided to recommend that the party keeps conditionality.

    I hope this reassures people that we did a lot of research and looked at a number of different options before ruling out CI. We all took very seriously our responsibility to evidence-based policy making and ensuring that we put forward what we thought was the best, most appropriate policy package for the Lib Dems.

  • Paul Warren 1st Sep '16 - 2:48pm

    This is all rather bizarre. The proposal considered might be called a Citizen’s Income but it doesn’t qualify as an Unconditional Basic Income because it breaches all of the principles that are quintessential in a UBI: it must be
    ◆ unconditional
    ◆ universal
    ◆ sufficient
    ◆ perpetual
    I defy any adult to live perpetually as a contributing member of society on an income below £150 a week.
    The proposal also suggests that housing and disability support should be integrated into the CI as fixed universal payments. But why? Each disability brings different costs. Each home has different costs. Keep disability support individual, and operate it through the patient’s doctors. Add £100 a week to my proposed £150, and direct to Bank of England to give fixed price mortgages at £100 a week. Let the country share the cost of housing, which would be much less than the hidden current costs of housing benefits and homelessness.
    Then we could agree to abolish income tax, VAT, council tax, etc in favour of a single simple Comprehensive Business Withholding Tax at a flat rate of say 40% on salaries, dividends, etc with substantial savings in administration, costs of compliance, and tax avoidability.

  • Eddie Sammon 1st Sep '16 - 3:06pm

    The left of the party seems to be pretty anxious at the moment and doubling down on radicalism, but most people don’t have faith in its electability or deliverability.

    If you introduce UBI and are pro immigration then you need to increase foreign aid, otherwise the refugee crisis would get worse.

    The policy platform would begin to look like the Green Party under Natalie Bennett and even foreign aid alone wouldn’t solve the refugee crisis because it requires a military element too.

  • Andrew Toye 1st Sep '16 - 3:12pm

    It is sad that the whole debate is revolvng almost exclusively aroud Citizens/Basic Income, when there are many other aspects to cosider.

    I personally like the return to the insurance principle – reminding people that what they pay in is for anyone who falls into hardship, and that can mean anyone – not just a to an allegedly idle underclass (as stereotyped by the Tories and their friends in the right-wing press) – though the insurance element should not be modelled too closely on the private sector as it could become unaffordable for people who need it most.

    If we demand that jobseekers should do just that and seek work, then there must be consequences for failing to do so – but these sanctions must be proportionate to the offence (such as fines in a magistrate’s court) and no-one should ever be left without the fundamentals – food, housing, heat, clean water, clothing etc – so a “penalty” rate of benefits should afford people these basics and kick in automatically when a sanction is applied (not as, at present, asking people to apply and wait, then be told it’s a loan that they have to repay).

    We must get back control of the narrative that we lost to the Tories whilst in coalition, as evil flourishes when good people remain silent. Them saying that social insurance encourages bad “lifestyle choices” is as ridiculous as saying that motor insurance encourages bad driving!

  • Adam Bernard 1st Sep '16 - 3:13pm

    Also: the right of the party seems to be pretty anxious at the moment and doubling down on centrism & managerialism, but most people don’t have faith in its electability or deliverability.

  • Lorenzo Cherin 1st Sep '16 - 3:22pm

    Eddie and Adam

    I think it is those of us in the centre of our party , not right or left , that struggle the most to even get heard !

  • Simon mcgrath 1st Sep '16 - 3:45pm

    Shouldn’t benefits be for people who can’t earn enough to support themselves or their families?

  • Adam Bernard 1st Sep '16 - 3:48pm

    Simon: do you say the same about medical treatment or education (that it should only be for those that can’t afford it themselves)? If not, why the difference in approach?

  • Citizens income seems to be one of those admirable ideas that have too many ‘but what ifs’, and also take little account of human nature. If it’s possible to screw a system, [CI or otherwise], people will do just that. That said, could maybe, an incremental CI over a lifetime work.? Here’s my outline idea for an Age Related Incremental CI : ?
    (Say),.. Child benefit stops at age 16, and instead every child [age 16], gets a CI of £5 per week. The proviso is that, that £5 per week must go into a pension pot for the benefit of that child’s retirement. At age 17 the CI increases by £3 to £8, again that sum compulsorily going into that persons pension pot. Each subsequent birthday, the weekly CI increments by £3.
    So age 20 the person has £17 per week (£884 annual), CI into their pension pot.
    Age 30 they have £47/wk (£2444 annual) CI going into pension plan.
    Age 40 they have £77/wk (£4004 annual) CI going into pension plan.
    Age 50 they have £107/wk (£5564 annual) CI going into pension plan.
    By age 66 they will have £155/wk CI which (by design!), exactly matches their state pension. So now at age 66 the £3 CI increments will stop, and only increase thereafter by the annual CPI rate, ( maybe, Triple Lock would go ?).
    There is much flexibility in such an lifetime incremental CI system linked to a personal pension plan. It overcomes the reluctance of youngsters to start or even think of their pension. Of course, some further thought would have to go into the amount of an employer’s contribution but that is eminently do-able.
    Also as people reach age 50, we could say to them that they can retire [at any year post age 50 ], if they wish and take their CI of [£107/wk at age 50], as actual income instead of as previously into their pension, and also they could take (if they wished), the lump sum pension accrued of £101,920 to invest as they wish. Deciding to retire early [at 50], also has the added advantage of freeing up employment opportunities for younger folk. If they decided to carry on working to age 66, then they would have an income equal to today’s pension of £155/wk with the added advantage of an investment pot of £ 212,160 to either spend or invest as they wish. There could also be early pension pot drawdown times for people of disability factored into this system.?
    Might his style of Age Related Incremental [ARI], CI system be worth further investigation.?

  • George: you saw the group discussed only one model. I can’t recall if you were at the evidence session where we went through this, but at that we had several models presented and discussed (and indeed you’ll recall my comments at subsequent meetings made reference to multiple models).

    Those who presented their models also did put forward the idea of the same rate being central to most models – because it’s having one uniform rate which serves up many of the savings (in time, money and stress) from having a system that gives different people different amounts. So whilst you may well feel the central principle of universal income is lack of conditionality, that’s not the view of many who promote it.

    Nick: I certainly read the RSA model too, and it doesn’t overcome the concerns I too had as someone who went from ‘very interested in idea’ to ‘the details don’t work’.

  • George Potter 1st Sep '16 - 4:21pm

    @Mark

    I was at the evidence session and we had exactly one organisation present us with a coated, detailed model. The chap from the ASI advocated the principle of NIT but didn’t have any detailed proposals. The chap from CIT had a paper which considered two possible implementations and recommended and expanded upon just one model. Also circulated, by myself, was a summary document of conclusions from the Canadian Mincome experiment.

    We may have heard from one or two more sources in favour of Citizens Income in addition to the above but the CIT’s paper was the only detailed and costed model which we looked seriously at.

  • I’m attracted to the idea of CI/UBI and so was interested to read this. However in my mind I never imagined it would be priced to cover disability and housing benefits as well. Of course if you try to do this it is very expensive and unnecessarily generous to those without additional needs or in lower cost housing.

    Did the working group run some numbers if housing and disability benefits were excluded, and treated separately according to need?

    I was also slightly disturbed by Lucy Nethsingha’s comment – “there was a strong view from other members of the group that some type of conditionality was needed to retain public support for the social security system”. Surely a Lib Dem working group should not feel constrained from aiming to do the “right thing” by untested concerns that the public at large wouldn’t like it. Shouldn’t we decide on the best policy first, and then set about persuading people we are right?

  • Nick – I was also distributed by Lucy Nethsingha’s comment that “there was a strong view from other members of the group that some type of conditionality was needed to retain public support for the social security system”.
    Was it even within the remit of the working group to consider the electoral implications of a certain policy? If not, such thoughts should have been put to one side and policies should have been judged on their own merits and not what someone presumes the electorate will think.

  • To partly answer my own question, the CIT analysis seems to come from here: https://www.iser.essex.ac.uk/research/publications/working-papers/euromod/em6-15

  • Lucy Nethsingha 1st Sep '16 - 5:21pm

    There have been a couple of questions about my comment on the public perception of social security and conditionality. I believe it was certainly within the remit of the group to consider the electoral implications of any policy we were proposing, but my recollection is that there were also a number of members on the group who were in favour of conditionality, as well as some members who would have preferred an unconditional social security offer, one of whom was George. I personally was undecided, and liked the idea of an unconditional offer. After discussion those who favoured some form of conditionality were in the majority, but there was also a great deal of sympathy for the view that the conditions must be proportionate. There was a strong recognition that the current system is far too punitive and I hope the paper reflects this view.

  • Conor McGovern 1st Sep '16 - 5:38pm

    I really appreciate Jenny responding to the comments on UBI. I’m not sure she’s got it right on the rates of payment though – the purpose of UBI is to give everyone a safety net for a good standard of living, upon which they can add wages from a good, secure job. Eddie struck an interesting note on immigration: I’d like to see UBI, a higher, smarter foreign aid budget and investment in the housing, transport, schools etc required to integrate people in a managed system, preventing the undercutting of wages.

  • Stevan Rose 1st Sep '16 - 5:48pm

    “So ultimately the Working Group decided we couldn’t support the policy. We didn’t all agree, but almost everyone who started out supporting a Citizen’s Income ended up believing that having seen the evidence, it just wasn’t workable”

    Good, sounds like you did a thorough job and came up with a sensible conclusion.

  • Mick Taylor 1st Sep '16 - 6:03pm

    The basic problem we are facing here is the newspaper induced belief that there are millions of people fiddling the benefit system and that the world is full of people who want to avoid work and get paid for it. It seems to me that continuing with a conditional system of benefits is pandering to that prejudice.
    The truth is that most people want to work and earn a living, but that there are some people who can’t work and others who are forced to work for a pittance. The aim of any benefits system should be to provide a safety net below which people can’t fall and this should be an income sufficient not to need to claim other benefits.
    I am surprised that the working party did not give more consideration to the policy that was favoured by the Liberal Party, namely Negative Income Tax. It is a simple system where individuals pay tax if their income is above the minimum level and receive rebates if it is below the minimum level. In effect there is one means test, namely the income tax return.
    Such a system would enable the abolition of whole swathes of the current benefits system and would of course be paid for by a progressive income tax system – probably more progressive than the one we currently have. In short the rich would pay more and the poor would get more. In one fell swoop most people would be taken out of poverty. Of course there will be a few people who spend their money unwisely, but in a free society that is their right.
    What all this means is a wholly different approach to work and benefits and I suspect that those who favour conditionality do so because they fear what the right wing press and their elitist owners will say.
    I believe that if we truly want to foster a Liberal Society in which none shall be enslaved by poverty, ignorance or conformity, then we need to propose a radical alternative to the punitive regime built up over the years by successive governments and we need to prose that all shall have a basic income sufficient to live on without resorting to loan sharks, borrowing from relatives or being called out as scroungers or whatever epithet the media are currently using.

  • Nick: For me, the question of housing, parenting and disability costs is central to why a good idea at first look ends up not working when you get into the detail.

    You can either have a simple model – which brings savings both financial (administration costs) and, perhaps even more importantly, in terms of reduced errors and stress – or you can have a model which caters for the huge variation in people’s living costs depending on number of children their responsible for bringing up, their health and where they live. Once you get into catering for those variations (and as liberals, understanding the huge variety of individuals should be central to our approach), you very rapidly lose the benefits of simplicity. For example, even as simple a question as extra money for people responsible for bringing up children spawns rules and complexity over who that is – not always the birth parents, not always two people and not always people at the same address.

  • A ‘universal income’ or a safety net that is then really only one for healthy, childless people in certain parts of the country (bearing in mind housing costs issues mentioned above) isn’t very universal or a great safety net.

  • George: you both complain that we didn’t look at the Canadian model and also point out that information about it was circulated (by you, thanks).

    Unless you’re suggesting that no-one looked at what you sent I’m not quite sure therefore what you mean 🙂 (and again, I’d point you to the comments I made myself in our discussions which made reference to it amongst others – so it did come up in our discussions in that sense certainly).

  • George Potter 1st Sep '16 - 6:13pm

    @Mark

    What I mean is that, while some people read it and while a very small number of people made reference to it in comments, there was point where the group sat down and specifically discussed other models (like the Canadian experiment) and their pros, cons and financial implications before the decision was made that the whole field of BI/NIT/etc should be off the table.

  • Iain Porter 1st Sep '16 - 6:15pm

    George, I think you’re right to highlight conditionality as a fundamental concept to debate, quite separate from the more complex Citizen’s Income (“CI”) question. CI does many things beyond removing conditionality, e.g. turbo-charged redistribution, rejection of needs-based resource targeting, removal of concentrated “tapering” away of benefits as income rises, etc. (extent depending on particular scheme). Jenny’s piece explains the working group’s rejection of CI schemes pretty well based on the bluntness of a flat rate system and/or the tax rises required.

    If the fundamental problem is conditionality, presenting CI as the proposed solution is unhelpful because it has so many other effects that many people (members, voters) object to. Changing conditionality (and treating claimants in a more dignified manner generally) can be addressed within the current UC structure.

    Looking purely at conditionality – people can make varying valid judgements on this. The working group devoted time to debate this principle in its own right. After hearing evidence from poverty charities, academics, etc. the majority of the group felt that some conditionality is necessary, based on fairness, public support, and as positive for claimants themselves IF DONE IN THE RIGHT WAY.

    Conditionality is not binary – it’s a matter of degree and approach. Much of the public feel out-of-work claimants who are fit and able should do their best to look for work. But the Policy Paper makes clear that the group think the current regime is too harsh, inflexible and negative. Hence they propose reducing conditionality, though not to zero, through ditching fixed penalty sanctions, safeguarding child and housing payments, strengthening appeals, and moving to positive encouragement.

    Others will disagree and think that anything less than unconditional payment of unemployment benefit without some attached responsibilities is wrong. That is a fair enough debate, but “money for nothing” is a position that I think the public rejects and could divert attention from more winnable and effective policy changes that could genuinely reduce poverty.

  • Iain Porter 1st Sep '16 - 6:20pm

    Btw – full disclosure – I am a party member but was temporarily seconded to the party to help staff this policy working group, among other things helping to arrange evidence for the group. I was not a voting member and aimed to remain as neutral as possible.

    Also for the record, the working group heard oral evidence on CI/NIT and were given papers covering numerous schemes in advance of a dedicated group discussion (including RSA, Citizens Income Trust, Reform Scotland, the Adam Smith Institute, Joseph Rowntree Foundation and yes the Green Party). RSA/CIT/Reform Scotland/Green Party were fully costed.

    I would add that since the group completed its work Compass and the Fabian Society have produced reports looking into CI/NIT. Both reject full CI/NIT schemes. The Fabians also reject unconditional payments.

    Personally, I think it’s disappointing that the motion to Conference does not repeat all the words of the Policy Paper, which makes clear the party remains open to learning from evidence on CI trials happening in other countries in the future, but nonetheless the motion does endorse the paper in full. It’s worth noting other proposals in the Policy Paper that I hope are not eclipsed – ie. long term aim of increasing benefit rates in line with earnings rises, scrapping the benefits cap, abolishing the bedroom tax, etc..

  • David Allen 1st Sep '16 - 7:01pm

    Citizen’s Income falls within the same category as flat rate income tax, Universal Credit, free love, the money tree, and Donald Trump’s Mexican wall. They are all simplistic fantasy concepts which attract gullible politicians, but just don’t blooming well work.

    Thanks Jenny Willott for doing grown-up politics.

  • I think a lot of this depends on whether you believe people are fundamentally lazy and, given the chance, would rather live a meagre existence sitting on their arse at home with a citizens income, or would choose to boost their income and standard of living by working given a reasonable and beneficial chance.

    Personally, I’m an optimist.

    In my personal utopia we would have a modest citizens income coupled with abolition of the basic tax allowance. I think this would increase the overall tax take and improve productivity and efficiency. Every paid hour worked would make the worker better off and result in the government receiving some tax income.

    Temporary, part time and casual work would become more attractive since the worker would always be better off without any reduction in benefits or any hassle of declaring the paid work. With no tax free allowance, all employers would deduct basic rate tax at source through PAYE. This would be a legal requirement for all paid work, no matter how casual, and the calculation would be very simple.

    As an added bonus, companies would be less able to treat their employees badly, since there would be a limit to how much exploitation and humiliation would be tolerated before staying at home with your CI would seem a better bet.

  • Philip Rolle 1st Sep '16 - 7:39pm

    There are surely far too many people ( 30 million? ) paid benefits of some form by the state. They should be paid largely on the basis of need. The tests imposed on those who are disadvantaged are too harsh. but that is not an argument for citizens’ income.

  • So something for nothing, why bother working ?

  • Well said Philip Rolle. A safety net yes, but more than that is bad for all.

  • Stevan Rose 1st Sep '16 - 10:58pm

    It’s a Utopian concept. If you want to spend your life making wobbly pottery mugs that leak then, my friend, do so with no fear of others criticising you for the rest of us will feed, clothe, house, and heat you and be extremely pleased to do so.

    Alas, if we all chose our hearts over our heads in respect of how to spend our days we would surely starve or freeze in houses that you can’t maintain because the plumbers and roofers are all now sculptors and ballet / belly dancers. They’re not fundamentally lazy but an unconditional and sufficient income allows anyone and everyone to engage in economically pointless activity. And, of course, some people are fundamentally lazy.

    Suppose I choose to carry on working hard in business to provide for dependents and my retirement, I would not be incentived by having to cough up substantially more taxes to pay for wonky pot throwers and belly dance practitioners. I might choose to move myself and my business to a country that hasn’t gone stark raving mad. Or I could join in the madness and become a full time jigsaw puzzler.

    Of course I could be grossly misrepresenting the situation but not how the vast majority of people would see it. I am glad the Working Group spotted some of the obvious flaws. What amazes me is that enough people took it seriously enough to set up a Working Group given the end result was obvious from the start. What next? The potential to use pixie dust in key marginals to influence floating voters. Discuss.

    Maybe one day technology and automation may mean work is a hobby not a necessity. I suspect that this will not be in my lifetime nor that of anyone posting here.

  • Andrew Kerr 1st Sep '16 - 11:27pm

    I wonder if anyone has studied Basic Income funded by a Land Value Tax – a variation on the Georgist principle of communal ownership of the land. The Greens support both policies but don’t seem to tie them together.

    This has to be considered in the context of a changing employment landscape. Jobs for life are long gone, and whilst computerisation has been having an effect for decades the increasing usability of machine learning and artificial intelligence may be a step change: once self driving vehicles are road legal taxi and HGV drivers will be out of work virtually over night, and I doubt their professions will be the last to vanish.

  • Conor McGovern 2nd Sep '16 - 12:31am

    Andrew Kerr – That’s very interesting. I was thinking we could fund a huge house building programme and end homelessness with a land tax, clamp down fully on corporate tax evasion to fund an end to SME rates, and introduce a basic income, but doesn’t it just replace the current welfare state in terms of costs and the administrative savings made?

  • I think a lot of this depends on whether you believe people are fundamentally lazy and, given the chance, would rather live a meagre existence sitting on their arse at home with a citizens income

    I don’t think they are fundamentally lazy, but I do think that if people were given money unconditionally they would spend their time on their hobbies and having fun, rather than on anything useful.

    The world does not need more amateur musicians.

  • Conor McGovern 2nd Sep '16 - 12:51am

    People are fundamentally good.

  • Lorenzo Cherin 2nd Sep '16 - 1:54am

    How do you get to be on a working group ,and does the party like people on them who have experience in the field being investigated ?

    I wonder if George or Mark could answer this , are they particularly experienced in this area ? They seem to be engaging well here which is good , as with Jenny Willot, very welcome.

    As someone who is experienced in this area , having been both client , in a precarious field of professionalism when young, and as a result of a car accident that has left disability issues and caused terrible stress for my wife and I , but then as an adviser for a private company contracted to the job centre plus organisation , I am keen to know. As a seminar leader I have seen real motivation amongst unemployed clients, having worked sometimes,as a specialist creative industries adviser, I can assure you such clients are keen to work !

    The quality of unemployed clients is greater , with regard to wanting to work and employability, than people suppose , and with regard to motivation, for example, though the energy is sapped by the dreadful atmosphere and mentality of staff and public stereotypes, alike . Many long term unemployed have been through a lot. A few are taking the Mickey , only a few in my view.

    I have seen very good quality job centre plus advisers , those that there are,and many very poor ones , with no skill in the field whatsover. It is terrible to think that a middle aged man or woman,with qualifications and enthusiasm to work , can be told that they pretty soon should consider Macdonalds , or else ! This happens all the time, to some.

    Has anyone stopped to think , that there is irony in the job centre staff only having a job that often involves forcing other better qualified and experienced people to get a job ?! Do not think most are given the remit to give actual advice , they usually are not. The system is a target driven encouragement of nervousness and low morale.

    The system needs radical change. Conditionality implemented by gifted , vocational , experienced advisers would be justified. As it is it is most definitely not.

    Basic income need not cover housing nor disability , the latter even UKIP think should be decided by evidence supplied by the clients GP! It is basic income , and it is rather basic to me ,to mean a minimum to cover food and bills.

  • Stevan Rose and Tim – I imagine CI would be set at a level that would allow you feed, clothe and house yourself but not much more. It wouldn’t fund hobbies (that cost money, and most do). If you want to do ballet or throw wonky pots you would have to do some work to earn the money to pay for your ballet shoes, tutu and that spinny thing pot throwers use.

    I still think that the vast majority of people, even on CI, would choose to work if they could in order to afford a better lifestyle (including “fun” and belly dancing lessons).

  • People are fundamentally good

    We must be thinking of different people.

  • Janet Ellard 2nd Sep '16 - 10:33am

    I work with homeless young people and I feel that the current system of benefits fails them completely. When benefits are stopped, Government assumes that people have friends or family to fall back on – but many of the young people I meet don’t have this. I feel that a system offering carrots, rather than sticks, would work far better. Similar to the idea of a Citizen’s Pension, but on a much smaller scale, I would suggest that there should be a basic amount of benefit that anyone who is out of work receives, whatever. This should be £30 – 40 a week, mainly to cover food & basic clothing. Housing costs should continue to be covered by Housing Benefit, because that can vary according to housing costs in a particular area. Extra needs, for disability, dependent children etc. should be covered by other benefits.
    On top of that, there should then be “carrots”: additional payments for turning up to sign on (making the amount of benefit up to current levels of £57.90), for attending training etc.

  • @petermartin2001 – I think variants of your Job Guarantee have been looked at before, and I think there are a couple of problems.

    Firstly, where do you magic all the extra apprenticeships from? If they are not created as a result of genuine industry-driven need (in which case they should already exist) then they will end up being (ab)used as a source of cheap, subsidised labour.

    For older people, assuming the Job Guarantee is subsidised by the Government, how do you stop it displacing people already in regular company-funded employment?

    If the Government undertakes to subsidise all unemployed people into employment as part of a Job Guarantee, eventually all low or unskilled jobs will be subsidised at huge cost because why would any company choose to pay full whack themselves?

  • On top of that, there should then be “carrots”: additional payments for turning up to sign on (making the amount of benefit up to current levels of £57.90), for attending training etc.

    But why should people get bonuses for doing stuff they should be doing anyway?

    This is like giving the class bully sweets for every day he manages to go without hitting another kid, and claiming a successful anti-bullying policy.

  • Citizens income seems to be one of those admirable ideas that have too many ‘but what ifs’, and also take little account of human nature.

    I do think this aspect – human nature – hasn’t been properly addressed. Whilst we can think people are basically good, we have to accept the reality that even in the current system there are relatively large groups of people who ‘happily’ live in the benefits system. Hence the key challenge CI has is: will it make a mindset difference to this group, or will they continue to avoid contributing to society?

    Which brings us to a rather important point; we have a society that drew inspiration from the Protestant work ethic and thus this ethic has permeated everything including our education system. I suggest for CI to work, we need to think carefully about the ethics that we need to embed in our society and the motivations for work and thus modify our education system and expectations accordingly.

  • Peter Davies 3rd Sep '16 - 9:26am

    Is Citizens’ Income the answer to the failures of our social security system?

    Actually no. It’s the answer to the chaotic way in which our tax and benefits systems interact. That is why a working group that cannot consider tax cannot come up with a sensible version.

    Consider the following:

    Those who do not use up their IT and NI allowances are allowed to claim 20% and 12% of the unclaimed part. If they are on JSA , Tax credits or Universal Credit then the amount is claimed for them and deducted from the base amount of their benefit.

    This means no change for anyone who is paying taxes and not receiving benefits and no change for anyone on full benefits. There would be significant rises for those who currently fall through the gaps in between.

    That would need funding but much less than our 2010 promise to raise tax thresholds and we had no difficulty finding taxes we were prepared to raise to fund that. My preferences would be Land Value Tax, Inheritance Tax and bringing investment income and capital gains up to the same rate as earned income. Any of those would more than fund it.

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