…the plan we are advocating amounts essentially to this: that a certain small income, sufficient for necessaries, should be secured to all, whether they work or not…
Bertrand Russell, Proposed Roads To Freedom, 1918
There are two types of benefit fraud going on. There’s the sort that the Daily Mail and various populist TV shows enjoy making a song-and-dance about. Then there’s the more prevalent fraud, with targets to deny people the money they and their families need to live, to “sanction” them on flimsy pretexts, to require people with mental and physical disabilities to undergo lengthy and stressful appeals processes.
Providing a small unconditional income to everyone in society addresses both of these frauds – and incidentally means that much of the demeaning, embarassing, arbitrary, and extremely costly assessments can be scrapped.
But — say the objectors — why would you want to give people money for doing nothing? Where will be the incentive to work? But most people, nearly all people don’t do nothing: they may be developing a business that will generate profits in years to come; they may be caring for family or friends; they may be doing volunteer work for the community; they may be creating art or music; or they may be undertaking formal or informal training and education. They might indeed be working part-time or full-time — unconditionality means that there is no requirement to be unemployed.
But more compelling is the argument: should we countenance a “work or starve” system? Where the rich can leave an unpleasant job and wait until a better one comes along, but the poor cannot? Where employers can offer abusive conditions and zero-hour contracts, safe in the knowledge that people will have no choice but to comply if they are to pay the rent and that the Jobcentre will assist in the coercion?
As we move towards human jobs being replaced by computers, we have two choices. We can decry technology, and attempt to generate make-work jobs to give people something — anything — to do. Or we can accept that there will inevitably be more people than useful jobs, that this is no tragedy, and abandon the urge to force people to fight for the diminishing pool of jobs. This is not a magic bullet that will solve all of society’s problems. But it’s potentially a lot better than anything we have at present. As a party, we’ve committed to taxing unearned wealth — which arises from society as a whole. Redistributing some of it back across society as a whole is a fair, liberal, and practical plan.
Appropriate rent in this way, and there would be at once a large surplus over and above what are now considered the legitimate expenses of government. We could divide this, if we wanted to, among the whole community, share and share alike.
Henry George, The Land Question, 1881
The Working-age Social Security policy working group would like to know what you think; their consultation is open until 8th April
* Adam Bernard is a Lib Dem activist from Harrow. He works in the geekier sort of academia.
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42 Comments
Welfare Benefits certainly need reform, as successive governments have tended to build onto the existing shanty town of legislation and rules for various parrallel systems that interact in complex ways and too often needlessly confer admisintrive burden on both the state and the claimant. The system you propose would be streamlined more efficient and economic to maintain and deliver then the current systems. I am interested in this as I used to do Legal Aid in Welfare Benefits Law before becoming a Citizens Advice Bureau Manager. My analysis is that this minimalises disutility and allows individuals great potential I certainly want to know more!
Yes, this is a great old Liberal policy, which we got rid of purely because it would be a difficult sell electorally. Given that many other parties are now considering it, and other countries are trying it, I don’t think that’s as big a problem as it used to be. We need more radical Liberal policies like this, and I’m all for it.
I’m becoming more and more convinced that a move towards a basic income is both inevitable and desirable.
Well said.
Actual benefit fraud is trivial. The regime that has been put in place ostensibly to combat benefit fraud is causing intolerable hardship to poor, disabled and vulnerable people who have done nothing to deserve it.
The sooner we move away from the idea that any sort of cruel injustice is acceptable if there is the slightest chance that someone, somewhere might be getting a pound that they are not entitled to, the better.
A good idea that is well-presented in this comprehensive article.
Iain: precisely so. And there’s also the fact that having a *conditional* system (as at present) allows government to punish the poor and ill *under the guise* of tinkering with the complex conditionality. As they’ve done. Again and again.
I’m pretty much in full agreement with this argument. We’re already at a point where zero hour contracts are stretching the definition of full time employment.
Adam
This is a very intelligent article , with much to think about .I have seen the system up close, the world of struggle and precarious work , of hardship and disability issues , as a practitioner in the creative field , as an motivator to those unemployed ,and I can say this there are massively few cheats compared with the outrageous publicity machine of the mainstream media coverage .
One important aspect of any such rekindling of the old Liberal policy stance on this issue .The current power , in the hands of government , of their representatives in job centres , and of the wretchedness of the consultant doctors paid high fees to determine peoples future , has to end . It is wrong , and illiberal , for it takes autonomy out of peoples hands when they need it most .We must accept , though we often hear talk of UKIP as a right wing party , they have a humane policy on some significant issues . They are in favour of an end to the work capability assessment , replacement with doctors letters , as before.
To move to a policy of a basic income , would be difficult in the EU.They would demand it for all who live here, back to the magnet pull argument for Brexit !
The inevitable consequence of the policy would be an end to the job centres as we know it , and no more staff with powers over people , redundancies of many staff , keeping only a few offering genuine , proper , caring advise .That would be a good outcome.Money saved , to be spent on the basic income !
Fully agree with most comments. Did become involved in a policy group for a negative income tax some years ago, where those who earn pay in, those who don’t are paid out. It would certainly be easier and much cheaper to administer.
Or would the current tax credits system, where government subsidises Scrooge-like employers, serve as the basis for dishing out PAYE (Pay As You Exist) sums every week /month.
Am currently looking at a case where a person with mental health issues was forced by the Job Centre to take a job, through a highly-profitable agency, an hour’s journey from home. While he was paid expenses for seven or eight weeks, he received only excuses for no wages, and finally a notice that the firm had gone bust.
As a result, he couldn’t pay his rent and almost lost his home.
Some form of regular payment, taxed later alongside any earnings, could have ensured him enough money to live on.
@Jonathan Hunt
I definitely think a Negative income tax is the way we should be going on this, creates a basic income whilst also retaining incentives to work.
I’m not sure if it could be sold to the public though, since it’s in essence an extension on the tax credit system. Unfortunately tax credits seem to be rather unpopular at the moment, as they’re seen as subsidies to business.
I’m interested what people think should happen to the minimum wage if a basic income was introduced? I for one would like to see it abolished so that there wouldnt be such a gap between those lucky enough to have a job and those locked out of the labour market because of their lack of skills and qualification, or simply because technological advancement makes what skills they do have redundant
Lorenzo has correctly pointed out why this will be a problem for the UK in the EU. May I also add that a lot of particularly industrious people from other European countries will want to participate. Gyp…, sorry, Roma population, for instance, will definitely skyrocket.
I also somewhat disagree that everyone wants to work. Due to dearth of housing in this country, I have usually lived among the “less fortunate” since I moved here (despite myself working hard and earning some). While there are a lot of people with genuine financial difficulties (zero hours, divorce and child support, you name it), there is a sizeable population not wanting to work – and passing this attitude to their children.
@Igor S
I am not as pessimistic as you about people not wanting to work. With a guaranteed basic income that is not means tested, low paid work will become more attractive as it will always result in extra income without the risk of any loss of benefits.
I think that the time has come for a basic income. I certainly believe that we need to plan to treat the whole work and benefits system differently in the future.
The coming advent of things like driverless vehicles and warehouse automation is going to destroy millions of jobs. We will need a new industrial revolution to replace them, and I think a guaranteed basic income can and will fuel that.
A basic income will provide the necessary safety net to allow people to innovate and take risks. It will give people the ability and incentive to start new businesses and invent new products and business models. Some will fail, and some will succeed, but those involved in the failures will have nurtured skills that will make them more valuable to established businesses.
We need to be open minded and look beyond the “we can’t give people money for nothing” instinct.
Igor’s racis…sorry “politically incorrect” dogwhistling aside, the question of “what about people who don’t want to work at all?” is a fair one.
Or it would be, if we needed everyone to work. Right now, and for most of my lifetime, there are more unemployed people than there are jobs available for them to take. The current system means that we’re pushing people to apply for jobs that aren’t there in order to keep their benefits, but everyone who is pushed into a job they don’t want is actually taking a job that could, instead, be taken by someone who *does* want the job.
Surely if we’re going to be paying people not to work *anyway* it’s actually better to be paying that money to people who don’t want to work rather than to those who do?
Basic income does not require that everyone wants to work. It only requires that a large majority of people would rather work than live on basic income alone. Government coercion gets a tiny number of people into work and it does so largely at the expense of others who want the work more. Wages are what make people work and under a basic income system, you always make money when you work.
Yes, an excellent article. There could be several other benefits (if you’ll pardon the pun) to a guaranteed universal income: Firstly, better labour market mobility. If I want to change jobs, I need to be reasonably sure of finding a new job before I leave the old one to avoid an uncomfortable drop in my standard of living, so I may stick in a job I don’t enjoy or aren’t suited to to avoid this. I might be more inclined to take a risk and leave my job if I knew I’d still have a basic income, meaning I might be happier, or there would be a vacancy for someone else. Related to this, some people who liked the idea of starting their own business, but who were nervous of the financial risk, may be more encouraged if they knew they would still have an income, and may take the plunge. Who knows what good ideas are lost because of anxiety about the financial risks!
Secondly, parents could make more rational choices about childcare. A basic income could allow either parent to stay at home as a carer, or contribute towards nursery costs. Both are perhaps another small step to overcoming the blockages preventing greater female participation in the workforce, and certainly rewarding the work of child-rearing more fairly
For another view of this, see chapter 14 of ‘Inequality- A New Zealand Crisis’, edited by Max Rashbrooke, which addresses the subject in a New Zealand context, and makes similar arguments. The rest of the book is also highly recommended and thought-provoking for a liberal audience, although some aspects are specific to New Zealand
@George Stevenson Jr and of course if you left a job (even an unpleasant one) voluntarily, you’d be making yourself unemployed by choice and so ineligible for some benefits.
Igor. you’re being dismissed as racist because you used a racist slur in your comment — and the fact that you pretend-corrected it to Roma afterwards shows that you know this.
Peter — you put my point rather better and more concisely than I did. Thank you.
Won’t this basically be seen as the government supporting people who want to be rock stars, actors or writers, but who aren’t talented enough to actually make a living at those things, and aren’t willing to, as most people have to, work a day job in order to support their hobby?
And who would vote for that?
Great, sound, Liberal idea.
Tim — it’s essentially impossible now to make a living as a musician or writer anyway, since most people are unwilling to actually pay for music or writing (I know nothing of how acting works). There are a tiny number of massively-rich people, who are usually very far from being the most talented ones, but who have managed the equivalent of winning the lottery, but more and more people in both fields are unable to put in the time their work needs.
We’re losing the middle layer — the people who made enough from their music or writing to live a comfortable life, and who made up the vast majority of cultural diversity. This is partly because both the publishing and music industries have basically broken down — their function used to be, in large part, to subsidise precisely that kind of work.
But another thing that’s made it worse is that art takes time to create, and requires room to make interesting failures. In the relatively recent past the dole would allow this time and room — to take just a couple of examples I know of, both the writer Alan Moore and the singer Jarvis Cocker spent much of the early part of the 1980s on the dole while practicing their craft and getting to the stage where they could earn a living from it. Moore’s work has since generated literally billions in revenue, while Cocker became one of the biggest pop stars of the 90s, so the existence of a more humane benefits system ended up benefiting both them and their audiences.
And one of the big problems with the creative industries now is that this is no longer the case — people have no time at all to pursue their creative interests, so we lose the possibility of their work. There has been a huge amount of discussion recently about how culture is increasingly being dominated by the extremely rich and privileged, who are the only ones now able to go into those fields (see for example http://www.theguardian.com/music/2015/jan/19/chris-bryant-accuses-james-blunt-missing-point-privilege-arts ).
So personally, as someone who values music and literature, *I* would vote for that.
Agree with both the original article and Andrew’s comments.
I think a lot of people don’t want to do the sort of awful, minimum-wage, completely-insecure jobs that are all that some people think they are ever likely to get.
One reason I support basic income or negative income tax (which are the same thing net anyway) is the impact on the labour market. Jobs have to be net-welfare better than not working. If the experience of work is awful enough for the pay not to compensate, then people won’t take the job. That means that employers either have to fix their toxic cultures, or they have to pay people more to put up with them.
If you’ve ever worked anywhere where a significant number of people can afford to quit any time they want, then you’ll notice that employers can’t get away with anything like as much crap.
If people don’t want to work, let’s make work a better experience.
Also agreeing with Richard
it’s essentially impossible now to make a living as a musician or writer anyway
Hasn’t that always been the case? The usual response has been to take a day job — even T.S. Eliot had one, and frankly you are not T.S. Eliot. Why should people now expect to be just handed money to support their hobbies, rather than working a job they hate to make ends meet and doing what they want in whatever spare time they can grab?
This is the main problem with basic income: it’s the attitude of, ‘the world owes me a living just for existing,’ elevated to policy.
I don’t have a problem with a basic income we used to call it social security but the work ethic is still so ingrained in our culture that you will get the charge of” something for nothing” ,however you have to balance that with new technologies making more people redundant or providing less hours of conventional employment and of course a lengthening retirement age. The best way round this is a contributory element being connected to the basic income .There are still many tasks to perform in the voluntary and community sector .This third sector economy delivers 3 times its value compared to conventional employment streams so overall the country will not lose out from the basic income if it is linked to this sector as the contributory element.
“Providing a small unconditional income to everyone in society…”
Couple of questions :
Can someone put a ballpark figure to this small unconditional income to everyone,… £1000,… £3000,… £5000 per year?
Can someone also explain why this guaranteed small unconditional income, wouldn’t be a major ‘pull factor’, for some serious, hard core economic migration from just about anywhere south of the Mediterranean Sea ?
Tim — I’m not arguing for my own benefit. Nor am I arguing for the benefit of any musicians, writers, or actors who would be able to live on a basic income. I’m arguing for the benefit of the rest of society.
Most day jobs aren’t as conducive to creative work as being an editor at Faber & Faber, as Eliot was. The ability to create serious, difficult, complex artistic work has thus for most of British history been confined to the upper and upper-middle classes and those few who were able to get sinecures, but for a brief period — roughly corresponding to the existence of the postwar Keynesian consensus — it was possible for creative artists from outside those classes to devote time to their work, without worrying about an immediate payoff. The result was a flowering of talent unlike anything our culture has seen before or since, as we got to hear the voices of the working and lower-middle classes in great numbers. And all those working class artists were in some way subsidised by the government in their formative years, whether through the dole, or art school, or the Arts Labs, or Arts Council grants, or dozens of other ways which have now ended.
And that means we *all* lose out. If the only books and music we get to have are the work of hobbyist amateurs, then we will only get amateur work. *EVERYONE* loses out if the next great novel is never written, or the next great album never recorded, because the author or musician is too exhausted after working a thirteen-hour shift on a hospital ward or working the night shift at a bottle factory.
All of which said, I *do* think the world owes people a living — not me in particular; I’ve always been more than willing to work for a living — but people in general. The reasons I think that are rather complex, but summed up very well in this post by Scott Alexander — http://slatestarcodex.com/2014/08/16/burdens/ — in the section starting “humans don’t owe society anything. We were here first.”
Yes. Yes. Yes. Yes. And yes.
Andrew Hickey puts it well.
Given that no-one seems interested in answering my first question above, I’ll take a stab at it myself.
Welfare bill for 2014/15 …. approx £200 billion.
Number of adult citizens in UK …. approx 58 million.
So if we simply distributed the present annual welfare cost equally to all adult citizens today,… we would each get ….£3,448 p.a.?
Who in the Liberal Democrats is going to tell pensioners that their state pension presently at about £6,400 p.a., is going to be halved? And if instead you use the state pension (approx £6,400), as a baseline for your proposed Citizens Income, then you will turn the annual welfare bill from £200 billion to about (6,400 * 58 million) £372 billion,.. which is an increase of 86% !
Even if you deduct the redundant Benefits Agency costs (and their jobs ??), the nation’s welfare cost,.. thereafter called Citizens Income, will still be a massive increase from where it is now. Where will this massive extra cost come from?
If my figures are wrong, please correct me with an accurate set of figures,… but from where I sit this looks like pie-in-sky territory?
@Lorenzo
“To move to a policy of a basic income , would be difficult in the EU.”
Given that another EU country – Finland – is planning to implement a basic income policy (e.g. http://news.yahoo.com/finland-test-basic-income-finns-2017-194014405.html ) it seems we might have a ready-made pilot scheme to watch.
In all honesty, the Liberal Democrats best policy move in the coalition was the increase in the taxable Personal Allowance. It was simple to understand,..and simple to implement, as well as being a firm incentive for employable activity. It’s a far better option to pursue this Personal Allowance policy upwards until it meets with a minimum wage/working week?
You started the ball rolling in the right direction with P.A. increases, so why abandon your very best economic policy now? Instead of tripping over your own shoelaces for decades with this complex basic income idea,… keep with your own successful program of increasing the Personal Allowance up to about £13,000 plus an annual CPI increase thereafter.
Keep it simple, because voters like it simple
@J Dunn
The largest Item you missed from your calculation is personal allowances against income tax and National Insurance. Together these are worth about £3000 pa. In the first instance, you would replace these allowances with a £3000 citizen’s income and reduce JSA, basic universal credit and basic state pension by £3000 per person. This means you only have to find the money for those of working age but neither receiving benefit nor earning over the tax threshold. That’s still a fair chunk to find (perhaps about £10 bn) but It’s not the sort of crazy money you’re thinking of.
It has become so clear to me that the benefits system remains in place as a way to constrain people’s rights to a basic share in society’s goods. Both Guaranteed Basic Income and Land Value Taxation are models of systems that are inevitable in a future society in order to produce an egalitarian foundation from which a more human society can grow. Both are anchors that would enable a less predatory form of capitalism to thrive. That they are being dismissed by most is a clue that the existing order wedded to the synergy of human suffering and its mirror image greed and exclusivity has not yet caught up with a world in which basic goods are abundant and yet being mopped up by the 1percent. The change is coming fast, we are not going to let this imbalance continue for much longer
I thank you for your considered and informative reply Peter Davies.
I just sense that a lot of this highbrow basic income idea, is little more than an academic shell game. For sure, if you are standing on some voters doorstep trying to explain to a potential voter that you are going to take £3000 off their present income [State Pension, or JSA, or Universal Credit ], but don’t worry!!!,…. because we’ll put £3000 back in the form of a citizens income,… is not going to gain much voter confidence.
However, if someone stood on my doorstep and said,.. our party policy is to let you earn the first £13,000, and legally give the ‘middle finger’ to the taxman, I’d very likely invite them in for a cup of tea. When it comes to political policy, voters understand intuitively, that complexity gives politicians an excuse and a myriad of tools to deceive,… Whereas, simplicity, gives those same deceitful politicians, far fewer hiding places?
@J Dunn
“Liberal Democrats best policy move in the coalition was the increase in the taxable Personal Allowance.”
But it doesn’t help those in serious poverty – those either not earning at all or earning a pittance.
Tim — I’m not arguing for my own benefit.
I didn’t mean ‘you’ in particular, I meant any ‘you’ who thinks that the reason you can’t make a living making music, or writing poetry, or whatever, is that you’re an unappreciated genius who just needs to be supported in order to learn your craft — no. Almost certainly, it’s because you just don’t have the talent, and you don’t deserve to make it.
The ability to create serious, difficult, complex artistic work has thus for most of British history been confined to the upper and upper-middle classes and those few who were able to get sinecures, but for a brief period — roughly corresponding to the existence of the postwar Keynesian consensus — it was possible for creative artists from outside those classes to devote time to their work, without worrying about an immediate payoff.
This is the period when it was possible, thanks to mass-production and copyright laws, for those who have the most talent to make money by selling their work. That is, those who deserved to make money, because they were the most talented and the best, did.
A basic income doesn’t benefit the most talented: it benefits the ones who don’t have the talent but think that what they are doing is worthwhile, when actually it isn’t, at all. They should not be subsidised; they don’t deserve it.
I mean, if you haven’t at least made it to the point where you can do whatever-it-is part-time by the time you’re thirty, you’re probably just not good enough, right? So why should the rest of us, who might, you know, like to just noodle around on guitars all the time but realise that that is no way to waste a life, subsidise your hobby?
The reasons I think that are rather complex, but summed up very well in this post by Scott Alexander — http://slatestarcodex.com/2014/08/16/burdens/ — in the section starting “humans don’t owe society anything.
That’s a kind of bizarre reasoning. It seems to suggest that a basic hunter-gatherer society, barely subsisting on what they can hunt and/or gather, would have the spare capacity to carry the dead weight of worthless human beings who weren’t contributing anything. Which I find hard to believe.
Don’t you?
And the whole of it seems to be embedded in an argument that just because you think you are a burden, doesn’t mean you are. Well, that’s true enough: the person whose job was designing safety systems probably was wrong to think nothing they did was worthwhile.
But that doesn’t mean that everybody who thinks their existence is worthless is wrong, does it? Some of them are probably right. And, contrariwise, some of those who think their existence is worthwhile are probably wrong and actually they are utterly worthless — like the would-be musicians who actually have nothing that makes them better than the tens of millions of other would-be musicians out there.
A basic income policy that doesn’t discriminate between those who are actually worthwhile and actually worthless is not going to get support, nor should it.
We don’t have an NHS policy that refuses medical care to the “worthless” (and I can’t describe just how distasteful I find that concept). I see no reason why this should be different.
Well, it clearly won’t get any support from you.
Addressing everyone else, though, the point about basic income is that, as our economy is currently structured, we can produce everything that we have demand for and we still have 7-10 million working-age adults who are either not working at all, or doing something utterly pointless in order to keep their eligibility to benefits that they’ll get kicked out of after six months because they might get a pay rise, and it’s cheaper to bring in another sucker.
Given that a large number of people are not required to work for our economy to function, why are we trying to force people to work, rather than leaving the limited supply of work available to those who want to do it? Put into Mail language: “why are we encouraging the unemployed to steal our jobs?”.
If we take those who don’t particularly want to work out of the labour market then that market improves; those that do want to find it easier to get a job, and easier to get a satisfying and interesting job. Again in Mail language “Make jobs better for the deserving by kicking out the undeserving”.
Some of those people will just give up and live quietly on their modest BI. Others might try to take up some sort of artistic endeavour, or perhaps (their risk being limited by the certainty of BI to fall back upon) start a business. Many will fail, fall back on BI and quietly rot their lives away. Is that any worse than quietly rotting their lives away on benefits? But some few will succeed. This is Andrew’s point about pop stars (etc). 95% of the people who sat on the dole trying to become pop stars for 20 years never made any kind of an income from it. Most of them gave up – some got a “real” job, others just sat on the dole. But a few did make it. And the result was that there was far more of our creative professions – writers, actors, musicians (not just in pop), TV and radio presenters, comedians, etc, etc, from poorer backgrounds. That diversity of backgrounds brought something of value to our culture. And as for the idea that you should be earning something from a creative profession by the time you’re 30 – are you kidding? The average age at which someone sells their first novel is somewhere between 35 and 42 depending on the survey you choose. To actually be making a living, you’re probably talking about three or four novels in print, and few writers can write more than two novels a year. And, of course, if the average is 40-ish, then there are as many older than that as younger. Obviously pop music is different – but there are plenty of creative professions that are dominated by the middle-aged, not by the young.
We used to have something pretty close in effect to a BI – the “old” dole, where all you had to do was sign a form once every two weeks saying you were available for work. As long as you did that, you got a Giro once a fortnight. Now, you have to work nearly full-time at getting a job to keep your JSA. Has this change reduced unemployment? No, because the problem wasn’t that people weren’t trying hard enough to get a job; it’s because there weren’t – and aren’t – enough jobs for everyone. And that’s because labour in the modern economy is too efficient; we can do everything that people are prepared to pay for with barely half the working-age population actually working.