Although we are still in the middle of the COVID-19 crisis, radical political parties like ours should be beginning to think about the brave new world that, hopefully, will emerge from this catastrophe. I offer five policy suggestions, some of them familiar, some of them new, all of them more revolutionary than you think: –
– a citizen’s wage at £2,500 a month;
– a charge for using natural capital;
– ending the triple lock on pensions;
– bridging the divide between the NHS and the care sector; and
– re-empowering local government.
Support for the citizen’s wage is growing now that even the Conservatives have discovered it’s affordable. The idea is very Keynesian, to keep demand in the economy high so that jobs are sustained, and firms encouraged to invest. Moreover, please, can we remember that services form by far the largest part of our economy and consumer demand is key to creating jobs. A straight payment of, say £2,500 a month to everyone whose income is below that amount is a fair and simple replacement for Universal Credit.
The idea of “natural capital” is relatively new on the scene, and it comes from the realisation that we live on a finite planet. So instead of taxing the profits of firms which drill for oil or cut down forests, or use the sea as a dumping ground, we should charge them for using the planet’s resources. It’s a version of the principle “the polluter should pay”, and it could lead to a substantial income indeed for the government.
The triple lock on pensions was conceived in a different age. We now realise that it is the older generation which is better off than, the younger. So why do we have this madness of giving pensioners a 2.5 per cent rise when the young are struggling to find permanent work, to pay off student debt and save for a deposit on their first home.
The COVID-19 crisis has woken us up to the fact that there’s been a crisis in our care homes for years. We should take up Andy Burnham’s idea of a retirement charge to fund a National Care Service. Every citizen would pay 15 per cent of their assets (usually capital released from their homes) into a central fund which would then pay for any care they may need as they get older. Maybe then there would be “parity of esteem” between the hospital and the care home. Hospitals should be used only for acute treatments and care homes for recuperation and chronically sick patients.
My fifth idea is that local councils should be given real taxation and spending powers and not merely act as agents (and scapegoats) for the central government. Britain is a far too centralised state. The various parliaments should confine themselves to laying down basic laws, performing a co-ordinating role and regulating the economy generally. The health and care services, schools and universities, environmental services etc. should be funded and run locally.
Finally, it’s worth considering what must not happen after we come out of the virus lockdown. But the temptations will be high. We must not see the airlines being bailed out or the debts of polluting industries written off. These are partly to blame for the crisis, and we do not want to see them carry on, as the banks after 2008, as if nothing had happened.
* John Knox is a member of Edinburgh South Liberal Democrats, a retired journalist and a recent council candidate.
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25 Comments
Thank you for this. We do indeed need to plan for the future.
My priorities would be about how we can move forward.
The first is finding a way of people jointly making decisions. At present people certainly want to be involved. This is shown in the many campaigns that spring up and people show a willingness to join in. At the moment there is no doubt in my mind that efforts to deal with the virus are lead by the people, with the government getting in the way and stopping rational planning.
It is easy to criticise, but how do we move forward? History has shown that in fact leaders adopt the methods that they grew up with. This happened in Russia of course and inspired George Orwell’s Animal Farm. So how do move away from our elective dictatorship?
Then we need to face the facts about the planet we live on. We are aware of the changes we are making to the environment that we share. We need to find a way of accepting that we do not own the planet but that we have stewardship of it.
We need to remember the saying attributed to a First Nation American –
“Only when the last tree has died, and the last river poisoned and the last fish been caught will we realise that we cannot eat money”.
We cannot sell off our planet.
John,
you can credibly claim that the ides of a citizens income is very Keynesian as this article indicates http://www.inthelongrun.org/articles/article/john-maynard-keynes-on-universal-basic-income/.
“The climate crisis has revealed the disastrous effects of single-minded growthmanship, and even within the UK, the rise in living standards has stalled over the last decade in the face of stagnant productivity and inflated housing costs. At the same time, the legacy of deindustrialisation and the rise of precarious work means that the need to support low-paid workers and their families is greater than ever. The question is not whether the UK’s post-industrial economic model requires an extensive system of cash benefits for working-age households, but what form it should take. The prevailing model of means-tested, conditional support backed up by benefit sanctions which has developed over the last 30 years – and is now reaching its apogee in Universal Credit – hardly fits with Keynes’ libertarian ethos. If the great man were alive today, he would no doubt be struck by the growing interest in UBI across the British left, including among Labour, Green, and Scottish National Party activists and some rank-and-file trade unionists. Indeed, John McDonnell has set out plans to run basic income pilots in Liverpool, Sheffield, and the Midlands if Labour wins the next election. Eighty years after Wansbrough suggested a basic income scheme to Keynes, it seems fitting that the political debate has come full circle. Whether this is the right moment to bring UBI ‘on to the tapis’ of British politics remains to be seen.”
Your namesake, however,(who led the Scottish reformation) may have balked at the payment of sums that would destroy the protestant work ethic, but those are details to be hammered out.
As to “the idea of “natural capital” is relatively new on the scene” I would beg to differ. Land Value Tax (land includes all natural resources here – land, air, water, oil and minerals, etc) has been a bedrock of Liberal policy for over a century now. This would also obviate the need for abandoning the triple lock as it would being about a generational redistribution between landowners and tenants.
Giving councils the power to levy commercial and residential land value taxes would provide the means for funding adult social care and provide for the acquisition of land for the development of much needed public and affordable housing.
This is the right time to integrate social care into the NHS.
When there was legislation for the NHS in the 1945-1950 parliament, during the Attlee government, thought that better health would be self-financing The health secretary said that he had “stuffed the doctors’ mouths with gold”. There was also a need to build hospitals, bearing in mind that the most dangerous part of a hospital is the lift button.
The late Florence Nightingale was determined to investigate the death rate in a hospital and came to realise that it had been built over a swamp.
The government guaranteed salaries over the short-term capped at £2500/month because that’s roughly the median income – and it replaced people’s salaries, it wasn’t in addition to them.
If you created a UBI that gave everyone the median income you would either land up in an absurd race with hyperinflation or you’d make the median person literally jobless. You’re quite literally picking a fight with maths.
“Support for the citizen’s wage is growing now that even the Conservatives have discovered it’s affordable.”
I think that is a very inaccurate reading of the current situation the government are implementing.
How is the figure £2500 derived? It looks like it is based upon the maximum figure that was set for a scheme that the government believed would be for a smaller proportion of the population than is now claiming.
“a charge for using natural capital”
This seems rather vague, a reasonable number liberals have long held LVT as a sensible policy (this is probably correct, but finer details could be clarified). And pollution taxation (or some kind of state administered cap and trade mechanism) is relatively mainstream in many developed countries. Natural resources are taxed in more ways than simply via corporation tax on extracting companies profits.
What does this new term mean when compared with the much clearer ideas already in existence?
“– a citizen’s wage at £2,500 a month;”
Which is nearly twice my current THP – Though that does take account of a fair whack of pension contribs (which would no longer be necessary)
Can you show anything that suggests this is in anyway economically sustainable. I make it that costs around £1.8 trillion – around 75% of GDP.
Apart from integrating care and NHS, the other stuff is not well thought out. UBI replacing welfare, tax allowance, pension and charity relief, in work benefits, state pension etc works out at £4000 per adult, half that for kids and twice that for pensioners – in old money, post virus it will probably have to be less to get close to balancing the books as well as some hefty increases in taxes (5- 10 percent depending on income)… not a pretty picture but the price of saving lives. The chancellor refuses to comment on future budgets, does not bode well. You also have a coming stock market crash likely to be worse than 1929, possibly a house price crash (bit early but who knows) and who knows what climate change and strange viruses will turn up… all in all, time to get basic living costs slashed right back so that people have a chance of surviving.
Reasonable and imaginative changes like these would have a better chance of success in the egalitarian atmosphere of an independent Scotland where there are better prospects for overcoming Tory resistance to change and Labour negativity.
@Robin in a country where the “progressives” are in power yet still failing to reform the gender recognition laws I enjoy the idea that it’s Conservative England holding the Progressive Scots behind.
Nationalist exceptionalism is ugly and misplaced, no matter where it comes from – bigotry knows no nationality and respects no border.
@ James Belchamber ” the “progressives” are in power yet still failing to reform the gender recognition laws I enjoy the idea that it’s Conservative England holding the Progressive Scots behind”…… You must have blinked and missed it, James. It’s on the web
PUBLICATION – CONSULTATION PAPER : Gender Recognition Reform (Scotland) Bill: consultation Published: 17 Dec 2019 Directorate: Justice Directorate Part of: Law and order IISBN: 9781839604331….. ‘The draft Bill reforms the process by which trans people gain legal recognition of their lived gender through a gender recognition certificate’.
You might also have missed the historical bit : ‘The Young Scots’ was a radical pressure group within the Scottish Liberal Federation campaigning for Home Rule when there was a U.K. Liberal Government…. but many got disillusioned by how right wing the Liberal Party was back in those days.
As a Yorkie living in Scotland for the last fifteen years, I have experienced a lot more ‘Nationalist exceptionalism’ Down South than I have up here. Take the EU for example.
@ Richard Underhill 15th Apr ’20 – 1:28pm “This is the right time to integrate social care into the NHS”
@ James Belchamber Please note : “Health and Social Care integration: progress review – gov.scotwww.gov.scot › publications › ministerial-strategic-group-health-com…
4 Feb 2019 – Since 2016, work has been underway across Scotland to integrate health and social care services ….”
”A straight payment of, say £2,500 a month to everyone whose income is below that amount”
Do that and I’ll immediately quit my job. Why work for money when people who don’t work get more than me? Have you thought through the practical implications of this at all?
A correction to the main article it’s not the old that benefit from the triple lock but the young.
Not the triple-lock nonsense again. The current basic state pension is currently £134.25 per week. +2.5% = a whopping £3.10 a week.
If you think all pensioners are property millionaires, let me take you for a virtual walk round the South Wales Valleys.
It’s tough enough for those of in insecure jobs that the pension age has been pushed up from 60 to 67. Now you want to ensure that when/if we DO finally get there, that pitiful £134 has been eroded by inflation?
Three cheers for Cassie.
Believe it or not, defending the triple lock was one of the very few Lib Dem successes during the Coalition. Yet, whilst the Reds might not be hiding under the beds, the Torylites are still lurking off stage somewhere in the pale blue yonder.
I know it’s a nick pick but why not call it a citizens income?
Wages are a weekly payment for service rendered, but this is a income provided as a right. Plus the term “citizen’s income” was paddy Ashdown’s term for such a policy.
Aslo £2500 a month per citizen is a extraordinary expense. The state could suspend every function it currently does to pay for it, and still only finance half of it. Even MMT people might bulk at the idea printing close to £ 2 trillion worth of currency a year, would not produce high inflation.
Cassie, David Raw:
Easing the triple lock by getting rid of the minimum 2.5% increase per year would still leave an annual increase equal to either inflation or earnings growth, whichever was highest.
So there’d still be no danger of pensions being ravaged by inflation.
Splendid name, John; redolent of Scots history at its core. I hope, like me, people used to buy you whisky when they first heard youR name? I recall meeting aUS Congressman who introduced himself to me “My name is Tom Sawyer. Do you get as much grief for your name as I do?’ To which I replied that my name had never given me grief until that dreadful Braveheart film came out.
A straight payment of, say £2,500 a month to everyone whose income is below that amount is a fair and simple replacement for Universal Credit.
“A straight payment of, say £2,500 a month to everyone whose income is below that amount is a fair and simple replacement for Universal Credit” ????
I’ve often been accused of reckless economics for suggesting that the Govt doesn’t have to exactly balance its spending with its income. But I don’t think I’d ever suggest anything like this!
Sure we’d all like an unconditional £30k annual income. But why would anyone want to get out of bed early in the morning to drive buses, trains, empty the bins etc unless they were going to at least double their income? I don’t think even the LibDems are suggesting that shopworkers should be on £60k pa.
The sensible thing to do would be to just earn a bit extra on the side on a cash-in-hand basis.
This suggestion is just crazy economics.
@ John Knox,
Maybe I got hold of the wrong end of the stick with my last comment?
I was thinking you meant that someone who earned £2501 per month from their job would get nothing. But that someone who earned nothing would get a monthly cheque for £2500. This means you’d be expecting the worker to still put in a full month’s work for the princely sum of £1.00. This would no doubt turn negative after he’d paid his bus fares.
So can you please explain what I’ve missed?
I believe this is unnecessarily complicated, both in the very conception, and in the proposed execution. Why are we so unwilling to return to basics and consider the problem from scratch? Why do we prefer instead to look at where we are, and then elaborate a cumbersome scheme of tweaks and twitches to shift everything at the pace of Continental Drift?
First, then, the problem. Many believe that there is far too wide a divergence between the low disposable income of the many, and the very large incomes of the few. The question of deserving the one or the other hardly arises because the gap is so gross as to offend most people.
The basic solution is obvious: I will simplify my argument by pretending there are three groups of roughly equal size: the Poor, the OK, and the Rich. I also ignore wealth, though it features invisibly, as one of the sources of the incomes of the Rich. The problem reduces to this: most people agree that the Poor have too little to spend, the OK are ok, and the Rich have much more to spend than they need or merit.
In this simple world, the answer is obvious to everyone — and to some extent it is indeed practised: Income Tax is taken from the Rich and given to the Poor! Job done! What the Poor are given we call Benefits — and why not? [continues below]
[Continued from above]
The ‘why not’ is that these Benefits are grudgingly handed out to those of the Poor that surrender to strictures from Rich and OK in concert, who insist that the Poor get on their knees before holding out their hands. Humiliating the Poor does no-one any good.
What would do Everyone some good, would be to GIVE the Benefits, freely, to all who need them — and with a generosity (which is not to say copiously, but simply open-handedly) to the Poor. Let us all, as a Society or Nation, agree that the poor need Benefits, and club together in our Income Taxes to provide them.
Too simple? Of course. There will be a wide range of individual notions about the portion of the National Income Taxes that should be distributed. The individual notions will congeal into Party notions, and our democratic party system (PR, of course, not FPTP!)will enable Parties to contend for electoral support. In old fashioned terms, a “Right” wing party might argue for smaller Benefits than a “Left” wing party would; and a General Election would settle the money for, say, five years.
Nothing much would appear to have changed, to those who see only the colour of money. Those with colour vision would see a world transformed. The gap in Spending Money would have been narrowed; and Benefits paid for by re-structured Income Taxes would rightly be renamed the National Income Dividend paid to the Poor, the OK, and the Rich alike. The annual Budget would determine and declare the percentage rate for the coming year. All would get their NID, pay Income Tax on it, and be better off; the OK would pay more IT on it, and would be not much better off; and the Rich would get it, but would be actually worse off, because of the IT. The gap between Rich and Poor would have been narrowed, as we intended. But (or and) the Rich would of course retain their golden perches , the Joneses would still rule their income-status roosts. ( That is, of course, the main motive to get Rich.) What’s not to like?
NOW is the ideal time to do it, as we emerge from the Big Bungle of the Virus.
Just to anwer the points about the Citizen’s Wage or Basic Income. James Belchamber, FS People and William Francis have misunderstood. The £2,500 a month would only be paid to those who’s income falls below that amount (it would be a top-up in some cases). The Chancellor’s current scheme is costing £40bn, so is managable. And as to the Kit Ingoldly and Peter Martin’s point about lazy citizens. After a while they would I think become bored and start new businesses or become artists or sportsmen or go volunteering and so add to society in that way.
@ John Knox
” And as to the Kit Ingoldly and Peter Martin’s point about lazy citizens.”
Neither of us said this. This is a deliberate misrepresentation.
What we are saying is that we should be paid more for getting up in the morning to do whatever jobs we do to keep society functioning. It’s simply not realistic to expect someone to put in extra effort for little or zero extra reward.
Of course, if you feel differently, please get in touch. I can find you plenty to do! I don’t suppose you will. Not necessarily because you’re lazy but because, deep down, you don’t see it any differently from the rest of us.