What party members think about a universal basic income and benefits sanctions

Liberal Democrat Voice at Conference

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Lib Dem Voice has polled our members-only forum  to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. 741 party members responded – thank you – and we’re publishing the full results.

The social security debate at Conference this afternoon will be dominated by two major arguments. George Potter recommended rejection of the motion as a whole because it chose not to endorse a universal basic income and because it supports the use, albeit much restricted, of sanctions. Supporters of the UBI may well support an amendment calling for a negative income tax from Calderdale while an amendment signed by members opposes the use of benefits sanctions in any circumstances. We asked our members what they thought of the idea of UBI and sanctions.

Are you in favour of a universal basic income?

Yes 60.32%

No  39.68%

Here are some of the comments made:

It would be a clear, distinct policy and place the Party firmly on the “Left” (which, as Charles Kennedy and Paddy Ashdown proved) is the only place it can survive.

The nature of work is changing and society needs to catch up. The markets can no longer be a funnel for the rich to build up their wealth. Redistribution needs to be far more aggressive.

No. It is fundementally wrong as it discriminates against the most vulnerable in society. Common denominators always end up being the lowest.

As far as I understand the universal basic income does not add up. The costs to be saved from not doing means testing are small. If the budget for benefits/basic income remains fixed then it takes money from the lower end and shifts it upwards.

It makes me nervous as a policy because it’s hard to sell, but the success of tests elsewhere draws me to it.

On benefits sanctions, the margin was even greater. We asked:

Do you think there should be a presumption against the use of benefits sanctions?

Yes 66.94%

No 33.06%

Again, some of the comments made by respondents:

We are against enslavement by poverty & conformity. We should NOT use the threat of starvation as a stick to encourage “work ethic”.

Sanctions are being used punitively at the current time. We have to find better ways to incentivise people, generally those who are excluded, to move forward into some form of gainful employment. But also recognise that we have to support those in society who can’t fit into available work routines.

People should never be punished by having their only means of support/ability to buy food taken away.

A presumption, but recognising that in some cases they may be appropriate and required.

It is very easy to make mistakes in benefit decisions; the rules are complex, the number of claims is massive and the workload on civil servants heavy, and the claimants are by definition disproportionately drawn from groups of people who may struggle with understanding what they are being asked, or with responding within deadlines. Sanctions have a severe effect and reversing them is cumbersome and time consuming. There needs to be an active process for deciding that they are appropriate in an individual case rather than a blanket approach.

  • 2,200+ Lib Dem paid-up party members are registered with LibDemVoice.org.  741 completed the latest survey, which was conducted between 13-15 September 2016
  • Please note: we make no claims that the survey is fully representative of the Lib Dem membership as a whole. The surveys are, though, the largest independent samples of the views of Lib Dem members across the country.
  • We have been able to test the LibDemVoice surveys against actual results on a handful of occasions. It correctly forecast the special Lib Dem conference would overwhelmingly approve the Coalition Agreement in May 2010. In the 2008 and 2010 elections for Lib Dem party president, it correctly predicted the winner. However, in the 2014 election it didn’t; see here for my thoughts on this.
  • Polling expert Anthony Wells has written about the reliability/validity of LibDemVoice surveys here.
  • The full archive of our members’ surveys can be viewed at www.libdemvoice.org/category/ldv-members-poll

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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27 Comments

  • Conor McGovern 19th Sep '16 - 9:12am

    Fantastic.

  • There is also the widely reported (but always officially denied) issue of officers administering benefits being given incentives for increasing the numbers of sanctions handed out / penalties if “not enough” are identified.

    There is the issue of the widespread use and reporting of sanctions intensifying prejudice against disabled people / people with long-term limiting conditions, especially ones not easily visible. People with intermittent issues are particularly hard hit, where people will say “I know” X can do this that or the other… But, of course, when it comes to an employer using the skills and abilities of that person, they come up against the limitations, which makes it very difficult for employers and employees alike.

    My feel is also that much of the low productivity issue is down to this absolute obsession with getting people into paid work that they may not be suited to. As a personnel professional (with long experience in more sensible employment times) I know that getting square pegs into round holes in employment terms is damaging for everyone in organisations and society.

    We, especially as Liberal Democrats, valuing the individual and the community, and a belief not favouring total conformity have a duty to shift our focus to try to reduce the prejudice, and to work out how to deal long term with scare stories in such organs as The Sun, The Daily Express and the Daily Mail.

    I am amazed that as many as 30+% in the LDV members’ poll have voted against these ideas, but then I do read some of the blog comments, so not entirely surprising!

  • I wonder how many would have been in favour of a negative income tax rather then universal income as it stops the benefit going to those who earn above a certain level.

    As for sanctions, I’m not surprised at the sanctions answers most people will e sceptical of too much power concentrated. Benefit sanctions are a concentration of power over people with complex rules and highly inconsistent application. Far safer to presume against.

  • Conor McGovern 19th Sep '16 - 12:05pm

    Psi – Negative income tax is definitely an interesting idea which could serve either as a transitional system towards UBI or as an alternative easier to sell to the public. It’s to Jeremy Corbyn’s credit that Labour are looking at the potential of a radically reformed welfare state.

  • Conor McGovern 19th Sep '16 - 12:07pm

    We’d be smart to look at UBI ourselves.

  • Adam Corlett 19th Sep '16 - 12:24pm

    I sincerely hope conference-goers will reject the Negative Income Tax amendment. You can’t call for replacing the entire tax and benefit system, which this implicitly does, without explaining how.

    Vague calls for a Basic Income or Negative Income Tax can mean all things to all people (a bit like “Brexit”), but when you actually try to design a system you find that you either need to:
    – have it as a complicated addition to the current system rather than replacing anything
    – greatly increase poverty by not recognising need
    – greatly increase tax rates

    If members were presented with a specific proposal and these real trade-offs, I don’t think UBI/NIT would be nearly as popular.

  • What is so depressing, at least to me, is that one third of us believe that benefit sanctions (or to put it succinctly “State imposed destitution”) are acceptable….

  • @Psi – The Adam Smith Institute released a report in October 2015 on reforming the current system with Negative Income Tax:
    http://www.adamsmith.org/news/press-release-reform-tax-credits-with-a-negative-income-tax-says-new-report

  • Depends, if this is a replacement to our bureaucratic, current welfare system. I’m all for it.
    We could make it two-tiered, so people on Welfare (etc), who are in need, would receive more.

    If it’s meant as a top-up system for everyone, I don’t see why.

  • Laurence Cox 19th Sep '16 - 3:09pm

    @Shaun

    The Citizen’s Income Trust’s and the Adam Smith Institute’s ideas of what constitutes “revenue neutral” are very different. The latter says “without any current change in the level of taxation” (pg 36); the former assumes removal of the income tax personal allowance, a rise in income tax rates of 3p in the £, and the removal of both lower and upper earnings limits on employee NI. It is also worth noting Matthew Torry of CIT’s latest figures for the level of Basic Income; his EUROMOD paper (EM 5/16 see http://citizensincome.org/research-analysis/ ) from the LSE has 16-24 year olds being paid £50/week and 25-64 year olds £60/week (his payments exactly compensate 25-64 year olds for the loss of personal allowance and Lower Earnings Limit removal at existing tax rates), well below the figures that ASI assumes. These payments need the tax increases above to be “revenue neutral”. If you look at the Green Party version, which includes more benefits, it is even more expensive.

  • Ruth Bright 19th Sep '16 - 3:42pm

    expats – exactly, Lord Oates is just telling us that people will be sanctioned by a better process, so that’s OK then

  • Laurence Cox

    Presumably (having not dug through the numbers) a major difference would also be that a negative income tax would also drop off for the better paid and a decent number not receiving anything at all due to earnings being above a threshold. A factor that would make me favour a NIT over a UBI.

    Also surely if adjusting taxes to compensate better to dump NI altogether and just raise Income tax to cover what has been lost. Better to get rid of complications in the system than keep fiddling when making changes.

    expats

    It is a bit hard to judge what peoples preferences are for those who support some form of sanction, it isn’t a question that will tell you much unless people have written in lots of detail.

  • Benefit sanctions as applied today are clearly draconian and unfair. We all know that people get sanctioned for ridiculous reasons such as once turning up late to an appointment or not putting in multiple meaningless applications for jobs every week. I agree, that’d dreadful.

    But what if someone is clearly capable of working, but never applies for any jobs. Would you say they should never be sanctioned in any way at all?

    I wouldn’t, which is why I was one of the tough 30% in your poll. Go on, tell me I’m a right-wing monster if you like. But do you think you will bring the public with you on that?

  • Although the LDV survey is a ‘sample’ of Lib Dem opinion, it is inevitably very self selecting and I doubt very much that it is representative of wider party member opinion on this issue of UBI at least. And obviously this particular survey is about 1% of the membership anyway.

  • Shaun Young 20th Sep '16 - 1:35pm

    @Laurence Cox

    I had only flagged up the link as wasn’t sure if Psi was aware of the report, as the issue of NIT had been raised.

    The issue of UBI/NIT is one that even over in the US has been recently discussed. There is an interesting piece by Tim O’Reilly that was published in July:
    https://www.oreilly.com/ideas/machine-money-and-people-money which was an interesting take on UBI.

  • Peter Davies 21st Sep '16 - 7:56am

    Basic Income clearly needs to co-exist with some needs-based system (like UC). That does not make things more complicated than the current system. Basic income is easier to administer than the current tax allowances which it replaces. UC is administered exactly as in our new policy but for smaller amounts and many fewer people.

    In its simplest form, the personal allowances are replaced by a basic income of £3167.20. All income is taxed (ideally at source). Benefits are calculated as now but reduced by £3167.20. The taper is reduced to 48.5%. Nobody loses directly but obviously we need to find the money. It would cost less than 1p on income tax (though that’s not where I would raise it).

    When you have that system in place it is possible to have a sensible discussion about how much the state should redistribute income. The outcome of a tax and basic income rise could generally be described by “Everyone on less than x wins. Everyone on more than x loses”.

  • @ Peter Davies
    “replaced by a basic income of £3167.20 … It would cost less than 1p on income tax”

    Setting the basic income at £60.90769 a week would mean increasing revenue to pay for it. I don’t know why Peter thinks it would only cost 1p on income tax because according to government figures (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508120/Mar16_Direct_effects_illustrative_tax_changes_bulletin_v5_final.pdf) an increase of 1p would raise £4,500 million in 2017-18, while increasing the personal allowance by £100 (equal to 38.5 pence a week) would cost £735 million. It is planned that the Income Tax Personal Allowance will be £11,000 for 2017-18. I assume therefore to set the basic income at £2200 a year (£42.30769 a week) would cost nothing. If we divide the cost of increasing the personal allowance into the amount raised we get 6.1224, which equals an increase of £612.24 in the personal allowance equivalent to £2.2548 a week on the basic income. Therefore instead of £60.90769 a week in basic income, an increase of 1p in the income tax rate would mean a basic income of £44.56249.

    It is my understanding that couples can transfer their income tax personal allowances if one of them does not earn enough to pay tax to the other one. Therefore to set the basic income at £42.30769 a week for adults for 2017-18 must be revenue neutral with no increases needed in taxation. I would be interested if anyone can point out why this isn’t true.

  • I am delighted that conference voted against benefit sanctions. It was a policy introduced by the Tories not to fix a problem but to suit their narrative of demonising benefit claimants in order to justify welfare cuts.
    To compromise on an inhumane policy like that is to accept the Tory narrative.
    What concerns me is how it was that the working group was so unrepresentative of the party as a whole. I have a strong sense of not being listened to in the consultation. Luckily conference has the final say. That party has stuck to it’s preamble which looks forward to a society where none shall be enslaved by poverty.

  • Peter Davies 21st Sep '16 - 8:25pm

    @Michael BG. The bit you missed was the NI Allowance. My figure of £3,167.20 was made up of £2,200 for the Income tax allowance and £967.20 from the NI allowance. As you pointed out, even a slight rise above current levels is very expensive. An increase of 1p on all three levels of income tax (not just standard rate) would raise £5,725,000.

  • Peter Davies 22nd Sep '16 - 6:16am

    I forgot to say:

    Under a basic income scheme everyone pays tax so a 1p rise would raise much more than that (perhaps 8 bn). I wouldn’t use standard rate income tax to raise the money. There are much better taxes available.

  • Peter Davies 22nd Sep '16 - 6:37am

    @Martin
    A negative income tax cannot be structured to discriminate against married people but a residual benefits system can. At the moment, the combination of taxes and benefits discriminates massively against couples with only one income. On average this group is much poorer than two-income couples or singles. The system compounds this.

    You rightly identified the problem group as people with rich spouses and no income. There aren’t many (a good accountant can usually get £11k into the spouses name) but the public has no sympathy for them.

    If we raise the money largely from the better off, there should be no moral problem in redistributing income from one group of rich people to another group of rich people which is currently more highly taxed. It will still be the bit that gets attacked most.

  • Robert Wootton 22nd Sep '16 - 11:44am

    This is my personal viewpoint. Re universal benefit; everyone has a parent or is a parent.
    For parents, replace child benefit with a Parenting Skills Allowance that is equal to 100 time the NMW hourly rate payable to the parent or even grandparent that gets an NVQ in parenting skills. this would be similar to the qualifications required by nursery nurses and childminders. Having a qualified “supernally” in every family would increase the supply of professional child carers thus bringing down the cost of child care. Even if parents put their child with carer, they would be better placed to asses the competence of the childcare they choose.

    The same goes for people who have a parent who needs constant care; a qualification in healthcare; an NVQ Healthcare Assistant for the person who has responsibility for caring for the parent. This is more complicated to arrange because there are a greater variety of scenarios but the principle is that Community care in this instance should mean “Family Care”. A carer in every family.

  • John Littler 10th Oct '16 - 6:36pm

    Test

  • John Littler 10th Oct '16 - 7:27pm

    The Universal Citizens Income was a LibDem idea some decades ago, which was dropped as impractical in terms of cost. However it’s time may be coming again quite soon.

    Robotics and advanced computer software are within 15 years of wiping out a large proportion of work. This will include a lot of professional work as well as manual or admin. GP’s and Lawyers could be among the coming cull and there are not enough constituencies to offer them all MP positions!

    Already, it costs manufacturers as little as £3.50 p.h. including maintenance, to lease robots to carry out a variety of tasks, such as putting items into boxes and being re-programmed easily to change task. People living in the west cannot compete with those costs.

    These changes are likely to take effect more quickly than new jobs can be created and the new jobs may find themselves becoming largely taken up by the fast developing new technology.

    To prevent the above from happening would be nigh impossible, as any industry or country not using it would be massively disadvantaged and could not compete. Any protectionist economies preventing such technology would incentivise the smuggling in of goods made at lower cost and would fall behind, impoverishing most people.
    See part2

  • John Littler 10th Oct '16 - 7:28pm

    Part2:

    But people out of work would still need an income to be able to survive, to pay to consume the output and services of the new economy they need, but the old model of losing nearly all money earned in addition to unemployment benefits, would be penal, bureaucratic and unsuited to a minimal or multifarious work economy.

    A “near” Universal Citizens Income for adults might be the answer. It would pay everyone a basic minimum sum until any earnings on top which they might make, moves up into a high earnings threshold, after which the UCi could cease, as they would not require it to achieve a comfortable living standard. This choke off would save revenue and make it easier to implement.

    Clearly, this cut off would not help to sell the policy among higher earners or those anticipating themselves to become high earners, but it seems like an acceptable means of making the policy more affordable and less wasteful

    The cost of the UCi could be partly offset by removing all or most of the tax free allowance of the basic rate of income tax, because they had already been given the money tax free.

    In order to prevent a cut off point from discouraging additional earnings and making people £1 over that point worse off overall, the UCi could be phased out for top end earners with a taper.

    The main additional payments outside of UCi would be related to numbers of children cared for.

    By the above means, people could have a living income, yet would not be penalised for doing additional part time or self employed work, without the need to keep re-registering and changing benefits /employment status, which are necessarily becoming a lot more flexible and variable.
    See part3

  • John Littler 10th Oct '16 - 7:28pm

    Part3:

    UCi would greatly simplify the admin to run the system and would cut costs, yet would allow more incentives to find top up work. It would enable people to do charity work, perhaps for expenses and any mix of leisure, part time employment or self employment as they are able and would not freeze people out of the world of work on fixed benefit income, where they are highly supervised under a huge number of rules, taking back all earnings beyond a pittance, as at present.

    The opposition to this would be from monied interests such as the right wing press, which would rather people fought over vanishing work and made themselves available at worse and worse terms at lowest possible cost to unscrupulous employers. The unscrupulous employers could then set the standard as a race to the bottom, using fake self employment contracts, as presently offered by many couriers and others.

    This seems radical for a moderate party, but we will have to find radical solutions to address the workplace and incomes, which are going to change out of all recognition, very soon and we need to prepare for it. Labour might stray into this territory, but they are mainly distracted in internal battles. The Greens have already advocated a similar policy.

    There would be winners and losers, but allowing no radical change to meet these challenges, would invite an angry and frustrated electorate, who would tend towards high crime, drugs, depression, declining areas and riots. As we know, the devil makes work for idol hands.

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