“Is the Basic Income an idea whose time has come?” asked Caron, back in February and it seems now that two-thirds of the British public agree.
The advantages seem to speak for themselves: a universal cash payment from the government, means that no one needs to starve, no one is trapped in a bad work situation, and perhaps most important from a Liberal point of view, puts the choices in the hands of the recipient not leaving them beholden to the generosity of the government.
And, with trial schemes being set up in the Netherlands, Canada, and Finland, and a referendum in Switzerland, we’ve seen a growing number of positive articles on the subject – Andrew Hickey here and here, Adam Bernard on LDV here.
Others, however, remain sceptical – understandable, particularly after the Green Party’s disastrous miss-selling of the policy in the 2015 General Election.
Perhaps most serious concern is whether we can make the whole system add up.
Set the basic income too low and a great many people, particularly on low or no income, are quite a lot worse off. But set the basic income at a level where people are not worse off, the overall expense will be too high – particularly the basic rate of tax needed to fund an income that is enough to live on would be unacceptable to British voters who famously (infamously) tell the pollsters that they want higher taxes and then vote for low tax parties.
Malcolm Torry at Essex University explored this dilemma in a paper for the Citizens Income Trust [pdf], and suggested a hybrid middle way.
And based on that idea of compromise, what I would do, is propose a roadmap: let’s take a universal basic income as an ideal destination (or at least a useful waypoint from where we are now), and use that to guide the measured steps we make to improve the existing structure of benefits, Universal Credit and taxes.
We can make things better along this path but also see if we really are going in the right direction. Plus let’s see how those other trials work out so we can learn from what they get right and avoid what goes wrong.
So…
Step 1: abolish testing the disabled (“ATOS tests” aka the work capability assessment) because it’s both morally repugnant and costs more than it saves.
Step 2: simplify the Universal Benefit claim (and in the process make claims easier)
Step 3: simplify the tax and benefit system, by (re) unifying the income levels at which you pay Income Tax and NICs
Those first steps are so basic they ought to be our policy right now.
Step 4: introduce a “universal claim” element to universal credit – say £10 to £20 a week
That’s the first big change, based on the prime perceived benefit of a Basic Income – protection from starvation, protection from being trapped in bad employment; it’s a centerpiece manifesto pledge.
Step 5: allow people to claim Universal Credit through their tax return
Step 6: simplify PAYE/Universal Credit by allowing for personal allowances to take people’s circumstances into account (e.g. disability, single-parenthood, age-related). This would also extend the universal claim element to all claimants (in work as well as unemployed).
Step 7: increase the “universal claim” element to £50 per week (while reducing means tested element and freezing personal allowances)
So we protect the gains made by increasing the Personal Allowance while widening the group of people who are better off from that protected income to all those who have not benefited because their income falls below the minimum thresholds anyway.
These are the medium term steps that, if the system is working, would see us move to the “hybrid” subsistence income plus benefits system, to minimise the number of people who might lose out.
Step 8: phase out the age distinction between NI and IT
Step 9: acknowledge that NI is now indistinguishable from IT and abolish Employee’s NI.
Step 9a: If possible negotiate a deal with employers that sees a 10% increase in minimum wage in return for abolition of Employers NI too.
Step 10: abolish Universal Credit and convert to full negative income tax
Revolutionary change is easily presented as frightening and dangerous. And, to be fair, can often go badly wrong, as several recent governments have demonstrated.
But carefully guarded steps allow us to get from where we are to where we want to be, each time delivering a small but necessary improvement and giving plenty of opportunity to back off, think again or change our minds if it looks like it’s not working for people in the way we want.
This should be clearly presented, both to conference and in manifestos, as “steps towards a basic income”, with that as a clearly-defined end goal. It shows that we’ve got vision, which is good, and it gives us a stronger negotiating position in coalition, should that ever happen again. And above all it’s the honest thing to do.
* Richard Flowers has been a Party member for 20 years. He’s campaigned in many an election, stood as a local councillor, and Parliamentary candidate, was Chair of Tower Hamlets Liberal Democrats, and in 2020 was Liberal Democrat candidate for the Greater London Assembly constituency of City and East. He is currently English Party Treasurer. Thanks to Liberal Democrats in government, he is married to his husband Alex Wilcock. He also helps Millennium Elephant to write his Very Fluffy Diary.
47 Comments
How could setting the rate too low make matters worse for those on no income? Surely it would improve their lot?
This seems like a useful path from where we are to where we want to be! You make a very good case for having the implementation done incrementally – the hardest challenge would be encouraging this to happen in a political system that deprecates plans longer than one parliamentary term :-/ But that’s not a reason that we shouldn’t try.
There is a long way to go but I agree the time is right to get the project going. It is becoming popular for an EDM in parliament was signed by over 30 MP’s. Why no Lib Dem’s were on it I do not know ‘cos it has been talked about for some years.
Basic Income is (of course) a great idea and that’s why it was a policy of the Liberal Party in 1974 when I first joined (in Twickenham). Surely though, a major problem is that there are many different local / regional economies in the UK, each with very different pricing or availability for rents, work, transport and many other things. In practice could the scheme be sufficiently ‘localised’ to work well ?
Just another of the policies we chickened out of after the formation of the new party. It is a fundamentally Liberal idea and one we need to get back to quickly. No, it should not be localise. If you localise you just help to entrench regional disparities.
I stopped at step 1, I’m afraid. You can’t abolish testing for the costs of disability. Abolish the WCA by all means – it is arbitrary, vindictive, ineffective and expensive. But living costs for most disabled and sick people are higher than for able bodied and healthy people. There has to be some sort of test to establish eligibility for help with those costs. Basic income solves a lot of problems, and I am broadly in favour of it, but it does not solve the problem of the cost of living as a disabled person, any more than it solves the problem of housing costs.
@Jane Ann Liston – I think by “low and no income”, Richard was thinking in particular of people currently claiming means-tested benefits. Replace those means-tested benefits with a basic income at a lower rate than they are currently getting from benefits, and they will be worse off.
@Jane Ann Liston
A basic income is paid for (in part) by abolishing the rest of the benefits system. If you abandon conditional (means tested) benefits entirely then universality means that you pick up more of those who are being missed by the system at the moment, but people who currently receive high levels of, say, housing benefit or disability assistance see their income fall, possibly quite dramatically.
That is the sort of disaster that acting too quickly can and does cause – e.g. the bedroom tax – and would be against what any of us want, and so we need to tread carefully.
@Rob Parsons
Rob, please do read on past step 1.
It’s clumsily phrased – I was trying to avoid just using the phrase “work capability assessment” which is just jargon.
Much of my point is exactly yours, that not taking into account the additional needs of (in this case) the disabled claimant can make a simple basic income a poor outcome, particularly in a “big bang” transition.
I am specifically against the *current* testing regime, however, as it seems much more about taking benefits away from people for little or no reason rather than ensuring those in need receive the extra help they require.
@Jane Ann Liston – if you set the rate too low and abolish means-tested benefits, then people currently on means-tested benefits end up with much less money.
Richard’s proposal is so clever because he doesn’t abolish mean-tested benefits until the basic income is large enough to let him do so without impoverishing those currently on them.
I think that even in a universal basic income world, we’d need to have a need-conditional extra benefit for people with certain disabilities. But I can’t see why they can’t just get their doctor to certify the need, rather than having a testing regime.
I’m sure there would be doctors that would fraudulently certify people as disabled, but you can prosecute them for the criminal offence of fraud then. That’s how our tax system works – accept the tax form and pay on that basis, but then audit some people and prosecute the fraudulent. It seems a far more civilised approach, assuming that most of the population aren’t trying to steal, than only paying out after checking.
Just draw the graph of how you want tax and benefit to result for each individual. You will see that an elegant solution would be: tax all income; make all benefits universal.
I have tried, and failed, to express this here:
http://www.atkwanti.co.uk/tax/tax.htm
A very sensible set of steps, Richard.
Tony Greaves: “Just another of the policies we chickened out of after the formation of the new party.”
The only political party I’ve ever joined was the Liberal Democrats when they were formed in 1988. That was twenty-six years ago, and I’m struggling to find any way in which it makes sense to call us “new”. Personally, as a Liberal and Democrat, I think both in principle and in practice that a member who joined yesterday may well be just as good a Liberal and have as impressive ideas and talents to contribute as a member who’s not had a new idea in fifty years. Though the Lord Greaves would no doubt think of me as a whipper-snapper, however, anyone looking into the history of basic income within the more-than-a-quarter-of-a-century-old party will not be well informed by his ‘everything was better in the old party and everyone except me was wrong in 1988’ prejudices.
The Liberal Democrats, too, had a policy of “citizen’s income” for several years, and dropping it had nothing to do with the merger. I remember arguing against the rather timid policy paper in the mid-’90s that got rid of basic income policy at the same time as dumping the idea of combining income tax and national insurance.
So if anyone has very old Liberal Democrat policy papers in their collection from before that point, they may be useful in seeing how our party previously approached basic income, as might any even from the old Liberal Party if any previous members of that party would like to contribute something positive.
How would a “Basic Income” be managed in the UK alongside uncontrolled migration from elsewhere in the EU?
Richard Gadsden: We can’t have doctors certifying their own patients, because their job is to act on behalf of their patient, not to be impartial. There’s a very serious conflict of interest. We should certainly have doctors verifying claims for incapacity benefits, but they have to be independent doctors and not the claimant’s own doctor.
We can’t have an unconditional income that meets everyone’s needs until we have enough housing for everyone in the places where they need it. While there are fewer homes than there are people who want a home, any increase in their income will necessarily force rents and house prices up until there are again people priced out of a home. You need to add Step 0: release a vast quantity of land for housing (and ancillary requirements such as roads, shops, schools, health centres, churches, and so on).
Richard Gadsden — there is an argument within the health and social care communities about whether doctors find it easy to think in terms of ‘needs’ as opposed to ‘diagnoses’. (Apologies to doctors, this is a stereotype).
A person with a specific diagnosis may or may not have a variety of needs. Diagnosis-based eligibility for disability-related benefits is something we should avoid at all costs, IMO.
This should be put to Conference. In my view it’s a liberal policy whose time has come.
@Mike Scott
You make a very good point about housing – and the disproportional impact of housing benefit is one of the biggest hurdles to introducing a universal basic income.
I wouldn’t put it as Step 0, because I think that it will take considerable time to bring the housing market into anything like a sensible condition, but I’d certainly say it should be in parallel.
@Peter Watson
It’s one of the advantages of the gradual and look-at-the-evidence path, that we would be able to see what happens, and whether if drawing more people to work in the UK adds more than it costs.
Initially, I’d look at how Finland and Utrecht are planning on handling a basic income in the context of free movement of people.
In the longer term, we would have to look at negotiation with our neighbours – if evidence shows that there are net benefits to a basic income, we should be able to persuade other EU countries to consider it too.
Whilst I am not fully convinced by the arguments this is the sort of debate we should be having, and leading. Our present system is flawed and we need to be looking at the alternatives.
Whilst activists in LDV, SLF and similar forums are starting the debate our central party is well stuck in the past. Whilst Tim is a good communicator it does not look as if he understands the need for a radical shake up. Neale Lawson summed it up in a recent post
“But I cannot recall one article or one speech that has really stood out and tried to get to grips with the scale of your defeat or the role of liberalism in the 21st century”
Our party grandees appear routed in the past, with few new ideas. Until they move on, or are moved on, we are unlikely to make headway.
Thank you Richard Flowers for posting a link to Malcolm Torry’s paper. I don’t understand why you are not advocating one of his preferred schemes.
I would like us to adopt Malcolm Torry’s all at once scheme which keep all means-tested benefits but reduce their amounts by the Citizen’s Income, thus being income neutral to those who receive these benefits. He also keeps the State Pension and Child Benefit, but still pays Citizen’s Income to pensioners and children (I assume on top of the existing benefit).
To pay for it he has:
Raised the National Insurance Contributions (NICs) above the Upper Earnings Threshold from 2% to 12% and the Lower Earnings Limit is reduced to zero;
Abolished Income Tax Personal Allowances;
Raised all Income Tax rates by 3% to 23%, 43%, and 48%.
He expects administrative savings of £1bn.
He expects this new system to save the government £1.9bn. Therefore it would be possible to look at higher rates.
The rates would be pensioners – £30, young adults – £40, Children £20, everyone else £50 a week.
He suggests these rates could be increased over time. £50 a week is the equivalent of an Income Tax Personal Allowance of £13,000. During the Coalition government Income Tax Personal Allowance were increased by £4125, which is equivalent to £15.86 a week in Citizen’s Income.
@Michael BG
“I don’t understand why you are not advocating one of [Torry’s] preferred schemes.”
Precisely because he pays for it by abolishing the personal tax allowance – we’ve just spent five years very successfully making the tax system more progressive by *increasing* the personal tax allowance.
Doing a handbrake turn on a flagship policy like that would make Natalie Bennett’s failure to sell the basic income look like the height’s of competence.
Instead we need to protect those gains, but broaden the number of people at the bottom end who win from the system.
Only in time, and depending on how the system is working, would you then consider switching from personal allowance to negative taxation.
@Richard Flowers
Thank you for answering my question. However I think your reasoning is faulty. I supported the increase in Personal Allowance, but replacing it with a Citizen’s Income set at a higher level as suggested by Malcolm Torry does not abolish what we did, it builds upon it.
However to reject the ending of personal income tax allowance is to reject a major way to fund it. You seem to be setting a Citizens Income of £50, but you have not stated how you would fund it. Also changing the personal allowance system to include more for single parents and the disabled would cost money which you haven’t identified.
Replacing the personal allowance with Citizens Income is not abolishing personal allowance but extending its benefit to those earning too little to use the whole allowance.
If you convert the NI allowance as well, that works out at about £60 per week. That’s close to the value of JSA for couples or under 25s. A large majority of people would see no real change. Anyone on a reasonable wage would still get the same take-home pay. Anyone on full benefits (except couples under 25) or a pension would get the same benefits. Those on partial benefits would typically be a bit better off and the few people who don’t earn much but are not entitled to any benefits would be up to £3000 p.a. better off.
@Richard Flowers – congratulations on the way you have started a much-needed discussion. I used to be highly sceptical about this but the recent increases in the income tax personal allowance have made Basic Income look a much more realistic proposition than it did a few years ago. If it could be made to work, it could play a big part in maintaining and enhancing personal well-being in a zero-carbon (and perhaps zero-growth) economy.
@ Peter Davies
I like the idea of including National Insurance but 12% of £155.01 is £18.60 a week not £10. Therefore if we replaced it with £10 a week everyone earning over £155.01 a week would be worse off and this is not acceptable to me. There would be extra costs for everyone to receive £18.60 as not everyone is earning over £155.01 a week and I think these extra costs might be more than the £1.9b saving Malcolm Torry expects the introduction of his Citizen’s Income to generate. Including National Insurance might have to be introduced gradually. I think there are about 6.7 million people of working age who don’t receive any benefits or earn any wages to give then £5.45 a week I think would cost £1.9b and so it might be possible to reduce the NI limit to £109.58 and give all adults £5.45 extra in Citizen’s Income.
Richard
I shall say again what needs to be said whenever this is suggested, and in answer to Lord Greaves comment that it was a Liberal policy before the merger, as though no policies need to adapt over three decades !
Anyway , let me advance the view again , when this was a good and sensible policy , which I do agree does every one of your very good things , right through your list , we DID NOT HAVE FREE MOVEMENT OF NEARLY HALF A BILLION EUROPEAN CITIZENS!!!
If we introduce this policy the EU shall say ALL residents must have the right to this income. Or would a future Liberal Democrat prime minister be able to do more than Cameron could , unlikely , when many did not even back Camerons sensible, limited, reforms.No , the policy would have to be an income for ALL Europeans living in Britain.
And it would be a magnet for even more immigration from all across the EU and beyond.Or even if it would not , our opponents would say it LOUD AND CLEAR!
So unless we not only back Brexit , or hope for it , and even then , this policy would not be a vote winner because we could not probably legally introduce it for UK citizens and permanent residents of say five or even ten years standing , anyway.
Do you not think a mention or more of this would contribute more to understanding why many of us who support such Liberal ideas are not EUrophiles !
@MichaelBG I didn’t suggest a figure of £10. the £18.60 would be added to £42.16 value of the Income tax allowance giving “about £60” (actually £60.76). I approximate because we would be putting this to the electorate on 2020 figures. By then value of the two allowances together may be close to JSA for single people over 25 (currently £73.10).
Step 10. Once you take out the basic allowance (about £3000 per year for single people) what is left is mainly housing benefit. You can’t make that both universal and based on actual housing costs unless you are prepared to pay billionaires’ rent for them. Housing benefit will remain means tested. It might be possible to base some part (20%?) of housing benefit on average rather than actual housing cost. That could then become universal.
@Michael BG
Firstly, you are wrong to say that I haven’t said how I would fund the rise towards £50 – I said in the article we would cut the benefits that it is replacing (on a pound-for-pound basis, so that people aren’t worse off) and freeze the personal allowance, which draws more money in through wage inflation. This takes time. It might not get us all the way. That is the point of a careful and gradualist approach.
Secondly, no I have not spelled out how to keep each and every stage fiscally neutral any more than you have said e.g. how many redundancies your £1 billion savings in administration means, because this is an 800 word outline not a fully costed briefing paper.
But most importantly, you are simply ignoring the main point that it is politically and financially impossible to jump straight to even Torry’s poor-man’s halfway-house. A large hike in National Insurance (creating a 55% top rate of tax) plus abolishing the personal allowance (which we’ve just invested most of our political capital in raising)… no one would vote for it. You may think that it is self-evident, but I need to sell it on the doorstep, and the only way to do that is – slowly and carefully – to show people that it can work.
@Lorenzo Cherin
(You should check my reply to Peter Watson at 1:26pm yesterday.)
The main thing is that we simply don’t know what effect a basic income would have on the movement of people, or indeed what effect any such movement would have on the economy.
The assumption that it would result in a net outflow of cash is based on the premise that not only is £10 a week (or even £50 a week) enough to drag people here, but that rather than spending it on our higher-than-the-European-average cost of living, that money is shipped “home” (begging the question, what do they live on then?).
The evidence we do have is that migrants come here to work and by working increase our tax take by more than they cost. Increasing the disposable income of people (often younger people) on lower wages would normally increase economic activity leading to further growth.
If it were to cause migration flows that were damaging to our economy and/or our neighbours that would be a reason to stop and think again (certainly not a reason to quit the EU!).
But until we see the outcome of the trials, it’s really too soon to speculate.
@Peter Davies
Re: Step 10 and Housing Benefit.
Well, of course you’re right, and the wide variation in housing benefit that people receive is one of the main reasons we cannot simply jump to a basic income without leaving a lot of people a lot worse off.
Back at step 6 we introduce a conditional element to the personal allowance – which would be better to be needs based, rather than means based – which includes consideration of housing needs and costs, and that would carry over into the negative income tax calculation.
@John Medway
Thank you 🙂
I have previously commented on Adam Bernard’s posting on LDV, and certainly Matthew Torry’s scheme is an improvement on the Green Party scheme where anyone earning more than £32k per annum would have been paying a marginal tax rate of 52%; that would have hit almost 25% of the adult population. Torry’s scheme raises that point to £42k per annum.
My argument would be that we cannot look at Basic Income and how we fund it in isolation from other taxes. For example, graduates pay back their student loans at a rate of 9% of their income above the threshold earnings level. So, for them, the marginal rate would be 61%. If we do not also commit to writing off all student debt and removing tuition fees (or going back to the old system where local authorities paid undergraduate tuition fees) then there would be a severe disincentive for graduates to seek higher-paid employment in the UK.
There is no doubt that one can sell higher taxes to the electorate under the right circumstances; our 1p on income tax for education was a popular policy; but we do need to think through all the consequences, not just the parts that we like the look of. I think, for example, that we could merge NI and IT on the grounds that a £ in your pocket is exactly the same whether it is earned or unearned income. That also means that we would have to align Capital Gains Tax rates with the new NI+IT.
@ Peter Davies
It was not clear from your earlier post that you were not engaging with the idea already put forward for a £50 Citizens Income. However to reduce this figure from £50 to £42.16 only gives you £7.84 toward the £18.60 and therefore there will be extra costs that are not identified. I am thinking that it would be better to leave National Insurance out of the scheme and keep it simple – £50, £40, £30 and £20 according to age and then bring in National Insurance after the scheme is bedded in.
It would be possible to commit to bring in Malcom Torry’s scheme from April 2021 and then commit to increase the rate by 2.5% per year so for April 2026 it would be £56.57 a week for adults.
To include anything for every adult for housing costs is problematic. Housing benefit has to be means tested; we just need to build 600,000 houses a year for 10 years to reduce rents and house prices. The aim should be to get the Citizen’s Income above the amount of income tax payable on the National Living Wage (approx. £72.45 in 2020) and then increase it from there so Jobseekers Allowance can be completely replaced.
@ Richard Flowers
It seems you might think that freezing the personal allowance would pay for this. (As a straight replacement for those on benefit i.e. a name change for part of their benefit it is neutral). 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) it would cost £585 million to give only those people paying income tax nearly 38.5 pence a week in Citizens Income, to give them £10 will cost £15.21 billion. This does not include the 6.7 million people of working age who don’t receive any benefits or earn any wages. This is why Malcolm Torry replaces all of the Income Tax Personal Allowance, increases the higher rate employee NI and increases all income tax rates by 3%. I don’t know how many people earn over £43,004 a year, but according to government figures raising the high rate NI contribution by 1% would generate £820 million. If every one of these people earned £54,004 this would mean there are 8.2 million people. I think it would be safe to assume there are fewer people than this. (According to Torry’s figures only the top 20% of income earners would have a decrease in income and I would be happy with that.) Remember this is a transfer of income from higher earners to those not earning anything while keeping income the same for the lowest paid and those on benefits.
@ Laurence Cox
The marginal rates for Torry’s scheme would be above £43,000 55%, above £150,000 80%, which are still below the real marginal rate for those on benefits when they earn more money and have their benefit withdrawn which I think are still as high as 96%! It might be possible to reduce the payback rate for students above £43,000 from 9% to say 5%.
As you increase the Citizens’ Income it is replacing existing benefits or allowances for some people and giving new money to others. The first £3000 or so could be implemented very cheaply (the equivalent of a 1% rise in IT) because for most people it would be replacing either their tax and NI allowances or their primary benefit (JSA or basic Universal Credit). Above that point, every pound raised in tax is split over 30 million ways so it produces only small increases in CI.
That is why we should not frighten people by describing a perfect system with a 50% standard tax rate but should commit to a hybrid system which would replace the two personal allowances and the basic part of Universal Credit (or JSA and Family Credit if they still exist). All other benefits would remain within Universal Credit. That’s mainly housing benefit and as Michael BG says, the solution to that problem is more homes.
I’m glad to see this discussion happening, and I would like to see if this could be made to work in an affordable manner.
I would add that if you going to adopt Citizen’s Income then the aim should be to eliminate means testing entirely. Partly to save the administration cost of the whole means testing apparatus, but also to ensure to make sure that we take away any disincentive for people to take on casual or temporary work. At the moment, if you are on benefits and are offered some casual work for a week or two, you have to declare it, may have your benefits reduced, and face penalties if you make any mistakes in your declarations (or you do it “cash in hand”).
I like the approach this article takes, one of identifying a goal (Basic Income) and then setting out policy steps to get closer to it. More of this, please!
@ Peter Davies
“The first £3000 or so could be implemented very cheaply (the equivalent of a 1% rise in IT) because for most people it would be replacing either their tax and NI allowances or their primary benefit (JSA or basic Universal Credit).”
I wish this was true. £3000 a year is £57.69 a week. Malcolm Torry’s scheme does not give everyone £50 (only adults with young adults, children and pensioners receiving less) and to pay for it, income tax personal allowance need to be set to zero, everyone needs to pay the same rate of NI and all three income tax rates need to be increased by 3%.
Even if we just set it at £42.16 and reduced working age people’s income tax personal allowance so it has no effect on them, there would be extra costs. I suppose instead of removing the pensioner income tax personal tax we could just reduce their pension by £42.16 so it would be revenue and effectively neutral. We could do the same with child benefit with a Citizens Income of £20, but there would still be the cost of giving this £20 for those children who were removed from being entitled to child benefit because of their parent’s income. I have already pointed out that there are about 6.7 million people of working age who don’t receive any benefits or earn anything and giving each of them £2,192.32 would cost £14.688 billion. Therefore the cost of giving just adults £42.16 and £20 to children would be over £14.7 bn. Increasing all three Income Tax rates by 1% would raise only £5.82 bn leaving a shortfall of over £8.9 bn!
@ Nick Baird
I don’t think we could ever eliminate means testing entirely, but we could aim to have housing benefit as the only means tested benefit when the public are happy to increase their income tax rates by at least a further 6% on top of the 3% needed for Torry’s scheme.
I’m not proposing giving everyone money. Every person in full-time work, all pensioners, everyone on out-of-work benefits and many of those in part-time work, self-employed or on in-work benefits already get about £3000 a year so they’re getting nothing new.
That leaves unemployed people with employed spouses and not entitled to family credits, students, unprofitably self-employed and a few others who have something better to do than make money. Those are not massive groups.
@ Peter Davies
Do you think I made up the figure of 6.7 million people of working age who don’t receive any benefits or earn anything?
According to the ONS (http://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/march2016) March 2016 – “for the three months to January 2016 … There were 8.89 million people aged from 16 to 64 who were economically inactive (not working and not seeking or available to work),” and “the inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) was 21.8%”.
According to the Joseph Rowntree Foundation (https://www.jrf.org.uk/mpse-2015/employment-and-support-allowance-claimants) – “In 2014, 49 per cent of those claiming – 1.1 million claimants – were in the support group.” From this I have concluded there are 2.2 million people receiving Employment and Support Allowance as there are two groups.
According to the ONS figures 21.8% were inactive, 74.1% were in employment and 5.1% were unemployed totally 101%. Therefore it seems reasonable to assume that those claiming Employment and Support Allowance are being included in those who are inactive. Hence 8.9 – 2.2 = 6.7 million!
There are several groups you have missed:
Those with private investment incomes: these may be early retired or just rich.
Those receiving Family Credit. Single earner families often get this and I would class it as a support benefit for the non-working partner.
Those between good jobs and not claiming: I was unemployed for several months last tax year without claiming. I still used up my tax and NI allowances.
It’s also worth pointing out that if students received £3000 CI and took out £3000 less each year in loans then much of that would come back to the Government in reduced write-offs and interest subsidies.
There are a number of helpful comments here on the subject of UBI, particularly the ones that consider the difficulties of arriving at appropriate payment levels in relation to the cost of housing for the disadvantaged that must be resolved. Yet many people offering their own proposals for a basic income spoil things by insisting on some form of means testing. This is a fundamental mistake, and these proponents need to be reminded of the Basic Income Earth Network (BIEN) definition of Basic Income which is stated as follows:
benefits
“A basic income is an income unconditionally granted to all on an individual basis, without means test or work requirement.”
Means testing is not efficient or fair – in particular, it denies people entitlements they have contributed to and are eligible for.
Two further points:
A) to have any lasting effect and provide the sort of financial security really needed, the level of payment for UBI should be pitched at a level close to the poverty line, requiring it to be for an adult of working age £10 000 per annum. This should not be regarded as a Utopian figure, considering all the savings to be made by a change of benefits system and the introduction of substantially enhanced progressive income taxation
B) those who have an interest in the development of a workable UBI framework need to be fully aware of rapidly changing economic and environmental circumstances that will require the closest examination of current and anticipated advances in technology. Following which, altruistic and enlightened political leaders, where they can be found, could lead everyone into an era of abundance with the aid of techniques such as 3D printing, apart from substantial reductions in the cost of energy and capital formation.
@ Peter Davies
I am surprised you still wish to maintain the view that my figure of 6.7 million is too high. I haven’t counted those unemployed but not receiving benefit – according to the ONS “For the latest month, February 2016, there were 716,700 people claiming unemployment related benefits.” This means that of the 1.68 million unemployed, 960,000 (rounded down) didn’t receive any out of work benefits. According to Wikipedia “Family Credit” has been replaced and it was an in-work benefit. Perhaps you mean Income Support which is the same level as Jobseekers Allowance. Then there is Child Tax Credit (normally up to £53.46 per child) available for both those in and out of work. Therefore for children you could replace £57.69 of child benefit and child tax credit, and you would only be paying extra money to those parents you earn more than £50,000 p.a. (as I said earlier). According to DWP (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/433130/dwp-stats-summary-may-2015.pdf) in November 2014 there were 456,000 lone parents on Income Support, but has a higher figure for Employment and Support Allowance / Incapacity. We need to guess how many people are not in employment because they have assets to provide them with an income. In 2014 there were 345,271 net millionaires ( http://www.thisismoney.co.uk/money/news/article-2470081/Number-millionaire-households-UK-leaps-fifth-years-nearly-350-000.html). However some are likely to be in work, but we could estimate the figure as 300,000 which is likely to be on the high side.
Therefore my figure should be 8.9 – 2.2 + 0.96 – 0.46 – 0.3 = 6.9 bn, which is higher than my original figure.
@ William Shutt
I think it is important for us to get most members of the party to accept the principle of everyone having the right to a partial Citizen’s Income and if this means keeping most means tested benefits then so be it. Once we as a party have agreed the principle and you have convinced all UK political parties and a majority of the population of the principle, we as a party can move to setting the Citizen’s Income above means tested benefit levels and trying to convince members of the party this is the correct thing to do. I think it will help to convince people that a Citizen’s Income is a good thing if it can be introduced at a lower level even if the level is too low to live on.