Opinion: Universal Basic Income is the way forward for the Liberal Democrats

Following a post by Nick Barlow a couple of weeks ago, a number of Liberal Democrat members have got together in support of the Universal Basic Income. In this post I wanted to outline some of the reasons UBI can and should become the cornerstone of our party’s welfare policy.

Universal Basic Income is a regular unconditional tax-free payment made to every citizen regardless of their situation. Most models have it varying only with age- the under 21s get less, the over 65s get more- and naturally it replaces the large majority of existing benefits including pensions and unemployment benefit.

The advantages of Universal Basic Income and its variants have been argued at length across the spectrum, from left-wing blogs to right-wing talk shows. Here I’d like to concentrate on just a few of them.

The UBI would create a much more flexible and entrepreneurial labour market and drive up employment standards. If people didn’t like a job, they could drop out of it, safe in the knowledge they would be able to support themselves. If they wanted to start a business or improve their skills by training, they could do this relatively easily. Britain’s economy would become more competitive whilst simultaneously raising working standards. (All the evidence from pilot schemes shows unemployment would not significantly increase, as people generally like being active and the UBI would be about the same as existing out-of-work benefits anyway.)

Meanwhile, the present system of workers receiving only miserably small increases in income when they enter work (due to out-of-work benefits being removed) would quickly be consigned to the past. Benefit fraud would be practically abolished. Wealth would be shared more equally. Welfare bureaucracy, a daily hell for hundreds of thousands of Britons, would be enormously reduced. People would be able to fall back on UBI to raise children, do community work, or pursue a creative project. And perhaps most important of all, the UBI would end extreme poverty amongst British citizens so long as it was set above the poverty line for individuals.

Of course, a big question is cost. According to analysis (pdf) from the Citizen’s Income Trust, a group of activists and economists who support a UBI, introducing UBI in Britain would cost approximately £276 billion annually, only £4 billion more than the £272 billion cost of the welfare system in 2012-13. The process suggested by the Trust would require integration of the tax and benefit system and would without doubt be the biggest change to the welfare system since the introduction of state pensions. But the present system doesn’t work. It needs a radical solution. In Universal Basic Income, we have one.

* Robin McGhee is the prospective parliamentary candidate for Kensington.

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  • David Evershed 19th Dec '14 - 10:43am

    Would the UBI incentivise people not to work and be free loaders?

  • @David Evershed
    “Would the UBI incentivise people not to work and be free loaders?”

    I think for those that “are able” to work it would incentive’s them to do so. If they were able to work and keep their citizen income.
    Most people want to have as much money as possible to enjoy better things in life, rather than leading a life full of restrictions.
    Sure you will get a very small minority who do not want to do anything and would be happy with living life with subsistence levels, but then that is always going to be the case regardless of whatever benefit system we have in place, however, I think it is important to recognize that this would be a very small minority.

    In the long run a citizen income would probably save far more than it costs now, It would do away with a lot of bureaucracy, Admin costs, The Hundreds of Millions possibly Billions that are wasted on Private Work Fare providers etc.
    But most of all it would put an end to the stigma and the sections of society that are being constantly vilified and segregated.

  • Simon McGrath 19th Dec '14 - 11:14am

    So just to be clear, people at work would pay higher taxes so those who could work but chose not can sit around watching TV all day.
    How is this fair ?

  • I am in full agreement with this article. The dehumanising effects of our existing welfare system, the mounting cost of administrating it and the whole idea of building an economy dependent on inventing makework nonjobs to replace positions obsoleted by advancing technology so that we can satisfy a conformist work ethic make the case for change.

  • This Guardian article looks at recent research:

    And it finds that people work _more_ when Basic Income is brought in. And that they do so more effectively.

  • Who would be entitled to this basic income? Only UK citizens?

    We assert that people naturally want to work to improve their lot, but is this true of everyone? What do we do about those who don’t?

  • Bill le Breton 19th Dec '14 - 11:48am

    I have been a supporter of citizen’s income for many years.

    I like the word citizens income rather than basic income because it links with the idea of being an active ‘member’ of a community or communities.

    I did put forward an idea to the manifesto group that could have led to a kind of trial scheme. Here it is.

    Suppose a person could ‘sign up’ to a scheme. This scheme provided a citizen’s income of £x in return for the person being willing to earn say £50 a week working for some not-for-profit enterprise that was also ‘signed up’ for the scheme.

    The employer’s contract with the individual includes civilized conditions of employment. In return the citizen would receive the working contribution of the citizen in return for a minimum of £50 for a maximum of say 40 hours work a week.

    If they valued the citizen’s work they could offer more or even offer the same £50 but for fewer hours. This would tend to happen as the citizen became ‘trained up’ by the employer and of more social value to the social enterprise.

    Citizens would be keen to work for the best employer and employers would be keen to get the best citizen. So, employers would be anxious to advertise their opportunities in the ‘market place’, train those workers and retain them. Citizens on their part would be keen to advertise their skills, experience and reputations, using references from previous ’employing social enterprises’.

    First a word about the market place. Ebay would run the market place. Firms would have a site on Ebay to sell their opportunities and members of the scheme would have a page to ‘sell’ their skills, potential and experience. Anyone unable to ‘sell’ their potential by say Friday at 5pm for the coming week would receive the ‘basic’ citizens income which would be close to JSA. Support would be given to those wishing to attend training courses to increase their likelihood of finding a ‘buyer’ on Ebay.

    Second, incentives. Workers would be free to keep all of the first £50. For every pound they earn’t over the £50 a proportion of that money would be used to reduce the “basic entry income level” and the citizen would keep the rest. This tapering would carry on until the citizen was earning a certain ‘self-sufficient’ income – i.e at which point s/he was earning and keeping an amount £y and nothing was coming from the state ‘top up’. This would be greater than the living wage.

    If Citizen R wanted to work just one day a week for £50 and could find someone who was willing to pay £50 a day for her or him, that would be their choice. But there would be that minimum requirement to find someone willing to pay £50 for their contribution to a social enterprise. They could enjoy their garden, learn to play the guitar or engage in further education, write a book or do some more training. Whatever they wished. All of these are by definition social goods.

    With this scheme every person who wanted to offer their help to a social enterprise could do so – because their fellow citizens, through, the enabling state, was in effect topping up their income because a) they were part of their social enterprise community, b) they had something valuable to contribute, c) they would be getting better at doing whatever they did, d) no-one need feel excluded e) social capital would be growing and more social good would be being produced.

    Finally, if a person did not wish to take part, then, they could remain on the existing benefit system., which of course would not be as potentially generous.

    I also think that there would be not-for-profits who wished to direct their employment opportunities to people who might have particular problems that presently exclude them from full participation in our society and this system would encourage and support them in these social objectives.

    (I have avoided putting in actual figures because I hope people will look at the scheme and see that the detail could easily be filled in.)

    Sadly, I didn’t even get a reply from the Manifesto team!!!! No doubt the ‘community’ here will tell me why … in no uncertain terms.

    Good luck Robin.

  • @Andrew Ducker
    The research was carried out in poor communities in India, with a subsistence level provision.

    How can you extrapolate from this to the situation in a modern, developed economy, where people already have free education and healthcare and material expectations are vastly different?

    I’m not dismissing the idea out of hand, but the evidence has to stack up and be relevant.

  • A simpler method than Bill’s would be simply to give people the citizen’s income and remove the personal allowance on income tax.

    So you pay tax on everything you earn, but start off with that buffer that stops you starving to death.

    Very simple to administer.

  • Philip Williams 19th Dec '14 - 12:02pm

    For a party concerned with individual freedom Universal Basic Income should offer the opportunity to address the limits on economic freedom for the vast majority of people in a free market system.

    Most people spend a lot of their time at work. In a very dynamic economic environment with constraints on capital limited so that it has every opportunity to “create wealth and jobs” people have very little control over a large part of their own lives unless they are very highly skilled. With the economic power balance made more equitable, through enhanced market pressures, people (workers) would be gain freedom.

    There is a risk that some may choose not to do nothing. A system where there would be no constraint on them engaging in some activity for some social or economic gain is surely likely to minimise this more than the current one.

    However there do seem to be some major potential challenges to the simplicity of the system. Is everyone’s basic income the same regardless of their needs? Would the consequences of everyone receiving the same allowance for accommodation costs be acceptable? Who would be included?

    Fantastically liberating concept though.

  • RC – I wouldn’t take it as read that it would _definitely_ work that well in the UK.
    But I think anything that makes it easier for people to work without having to worry about losing their benefits and filling in lots of forms is a good thing. And getting rid of the benefit trap would be a big step there.

    Canada also carried out an experiment with this in the 70s, and found that the only people who worked less were mothers with young children:

  • What level do we set this income at? And is this the same region by region and city by city, given very different costs of living? If it is a decent level of income and unconditional, doesn’t this mean some (many?) people decide not to work?

    Fundamentally, do we as liberals believe that making everyone a subject of the state, come what may, is a good thing?

  • Love the colour of the PDF

    But I have read the LDV for many months and in this instance see the figures in a spread sheet and assuming the person who used the calculator did the correct figures I give this a general yes! Ok I am surprised at myself and perhaps small modification on amounts but generally ok.

    I can’t see DLA premium
    Not sure about cold weather payments
    Mentioned higher up but who is qualified as a citizen and after what period
    Age young or old travel allowance (bus pass)
    Biggest for me housing allowance will this remove people like me paying other people’s housing cost ie we all get housing cost

    For me add simplicity of tax NIS across the ages And make sure additional payments are hard to get and very time sensitive so that it’s hard to commit fraud. Having watched benefits Britain and the ways immigrants work around the moral value of benefits it’s one thing working in the law but moralatity is very important

    So good work best article I have read on LDV

  • James Sandbach 19th Dec '14 - 12:32pm

    Simon and David’s comments about anybody who falls back on a basic state entitlement for subsistence as freeloaders and people who chose to sit around watching TV etc are disgraceful; it’s been part of the problem with the debate on Welfare that pig-ignorant people who are comfortable stereoptype the lives of those who are not. The stigmatising and stereotyping of social security claimants by the likes of Simon McGrath, George Osborne et all is as bad as racism, homophobia and other forms of unfair blanket prejudice and hatred directed towards particular groups in society – we really shouldn’t tolerate it or let it go unchallenged in our own party which claims to value everyone. It’s commonplace in the Tory Party and those who share such prejudices and misperceptions might be happier there.

    But well done for Robin for raising this – Kelly-Marie Blundell and I put forward a motion on welfare reform at the last conference; someone did submit a Citizens Income amendment but it wasn’t debated and we resisted it being listed for debate as we felt that the proposal really needs a debate of its own. It’s a great idea and a profoundly liberal one that Liberals have been talking about since the 1970s, though when James Meade and other economists first modelled it we were living in a very different age and economy, and I do see problems with it in the current context and climate – it may be that the nearest we can get to the model of basic income is the Universal Credit system which our Party has done much to champion and make the centrepiece of welfare reform, though IDS & DWP have been making a mess of its implementation.

  • David Faggiani 19th Dec '14 - 12:33pm

    I have just been discussing this policy with my work colleagues and it’s led to some interesting conversations! I love policies that actually provoke debate and might be politically possible. Good article.

  • Moderator’s note:

    James: Simon and David (Evershed) did not say “anybody who falls back on a basic state entitlement for subsistence as freeloaders and people who chose to sit around watching TV etc” or anything of the sort. Please address yourself to the points people make rather imputing straw man positions.

  • Simon McGrath 19th Dec ’14 – 11:14am
    Simon, knowing your support for the Liberal Democrat appraoch of ‘evidence based policy’, can you tell us what evidence you have that anybody choses to sit around watching TV all day ?

    I assume you have some evidence and have not just thrown random saloon bar prejudice into the discussion?

  • Any evidence on *either* side of that point would, of course, be welcome….

  • Gwyn Williams 19th Dec '14 - 1:52pm

    When we dropped the policy after the 92 General Election, one of the reasons given was that it would mean an increase in the basic rate of tax to 70% and it would take 50 years of economic growth before the policy was affordable. The basic income principle is sound. Today we first need to answer the question is the £276 billion of welfare spending as outlined in the pdf affordable when we are running an annual deficit of £90 billion.

  • Graham Martin-Royle 19th Dec '14 - 1:53pm

    Unless I’m mistaken, the £272billion paid out in welfare benefits at the moment includes things like child benefit etc. The assumption appears to be that this will all be absorbed into the new payments total of £276billion. So what happens to all the additional benefits being paid out? Or has this not been taken into consideration and the actual cost will be much higher?

  • Much as its an interesting academic concept, UBI or ‘Citizens Income’ as it was called when I was doing my degree back in nineties is just never going to gain traction with the electorate, ever. People won’t get over the ‘something for nothing’ aspect of it.

    I do think you could modify the idea though, where anyone in the country can get their ‘UBI’ by doing a small number of hours a week through a government scheme. The government becomes ‘the employer of last resort’. I know people will shout ‘Workfare’ at this and point to recent failures, but this has been a result of poor design of the scheme – the goal of it shouldn’t be to save money or stop ‘scroungers’, it should be to allow those who are willing to work but cant find work an opportunity to top up their meager unemployment benefit.

    – Everyone should get paid the minimum wage
    – Its not a full time position that stops people looking for work or replaces a full time job
    – So we’re talking about 10 hours a week for £70-80 a week, which goes *ON TOP* of any benefits that are being claimed at the time

    As someone who has been unemployed, I’ve seen how simply not working can destroy your confidence and outlook, slowly as the weeks pass by. Getting people contributing and out of the depression of having nothing to do all week is the key.

  • James Sandbach 19th Dec '14 - 2:29pm

    Ok my apologies for over-reacting – but the words free loaders and those who could work but chose not can sit around watching TV all day, did appear actually in the above posts.

    My of point of course is that we need to sensitive in the language we use around welfare, as Sarah Teather has powerfully argued in the Commons, or we risk stigmatising people and distorting the debate – the political discourse led by both Tories and Labour is taking us back to distinctions between the ‘deserving and underserving’ poor, which shouldn’t to my mind find a home in our party without being challenged. We do hear a lot of it though, not just from the Daily Mail but also filtering into liberal circles – even our dear Leader found himself pulled in that direction with his “Alarm Clock Britain” thing, a rehetorical device he thankfully abandoned! Tabloid whipping up hatred towards claimants, stereotped depictions of benfits culture, George Osborne talking about ‘closed curtains’ in his budget speeches etc are part of problem we have with any sensible debate about welfare. The language we use reveals much about the attitudes which underpin the debate.

    If the argument against a Univeral Income is that it would be a boon to workshy/freloaders or other negatively dipicted groups (using negative language) in the lower socio-economic quintiles, that’s a generalisation about human behaviour, unevidenced and really not a very good argument!

  • RC asks for evidence — So here is some evidence , The Labour Force Survey 2014 data suggests that the vast majority of people do not sit at home and watch the TV all day.
    Employment was 30.19 million for November 2013 to January 2014.
    Unemployment was 2.33 million.

  • Robin McGhee 19th Dec '14 - 2:38pm

    It’s presumably pretty obvious that if I thought UBI would lead to a gigantic increase in unemployment, I wouldn’t support it.

    There is, in fact, no evidence I know of that it would lead to a spike in unemployment.

    An important reason for this is most models of UBI put it really rather low- about £60 a week or less for someone of working age. Very few people would be willing to tolerate that level of poverty for long, though of course millions are forced to. People would therefore continue to seek work as before.

  • Bill le Breton 19th Dec '14 - 2:49pm

    I realise my posting above at 11.48 this morning was long but it completely counters the freeloaders argument and the something for nothing criticism, it transforms the budget on employment based benefits and disability benefits into the creation of social capital, social goods and individual life chances/opportunities.

    It would be bureaucrat lite and administratively efficient. Thousands of people including many who presently receive benefits use Ebay for trading purposes, so the private sector is already providing the infrastructure. that makes this possible.

    It provides a staircase our of dependency and the depressive illness that follow. Even those with severe disabilities would be able to be involved if they wanted to.

    Please consider reading it. And help to build it as an idea.

  • matt (Bristol) 19th Dec '14 - 2:50pm

    The problem with Gareth Wilson’s more nuanced proposal – whilst sane – is that you then need a way to prove ‘unfitness to work’ and we are back at the highly charged arguments about how to assess disability / infirmity and their impact.

  • Bill le Breton 19th Dec '14 - 3:04pm

    matt (Bristol) , in my scheme you don’t have to prove unfitness to work. You opt in and become employable because of the contribution (through tax) of the whole society. There are very few people who could not provide a useful service to society, however restricted they are. It is the price of their labour that is the difficulty. Here we all chip in to help remove this obstacle.

    Gareth’s thoughts require a state provider – mine would encourage social enterprises to take up the talents, again assisted by the contributions of all of us.

    Another disadvantage of Gareth’s suggestion is that there is no ‘them and us to it’, no stigma. And by improving ones attractiveness to employing social enterprises over time one slowly increases ones potential income until one either works in the 3rd sector for the maximum income or then takes the next step into employment elsewhere.

  • I’m not against this idea, but the ability to finance it on a sustainable and continuous basis must be rooted in reality, and the lack of conditionality removes this.

    If I had my way I’d ensure we were able to reinforce the link between education and employment and basing the size of payments from any fund are relative to the level of state investment made in that individuals education.

    Call it a Truant’s Tax.

  • Richard Dean 19th Dec '14 - 5:10pm

    The big problem with UBI is that it’s about as far from liberal and democratic as you can get, and about as damaging to people’s motivations as a benefits system can be, particularly for those on low incomes.

    The first reason given in this article is that it alters the wage-bargaining negotiation in a way that favours the employee. In fact, it means that a person does not need to do anything at all in exchange for a wage provided by society. This flies in the face of the idea that society is for the benefit of all, and therefore that all should contribute according to their ability.

    The second reason is that someone is then free to drop out of work if they don’t like it. In this country it’s actually possible to live on half or a third of the minimum wage. I know people who’ve done it for many years. It’s hardly a good living but for some it’s preferable to work. By providing a low UBI for no work at all, you provide an attraction for some people to simply stop working – that will be the poorest sections of society who will be attracted most, since the poorest sections probably do he least enjoyable jobs.

    And of course it’s likely to be a total electoral disaster. If working people are to support people who are out of work, then working people need to know that there are systems in place to encourage employers to hire and employees to be hired. By taking out the second of these, you remove the support that had working people will give for this proposal, and so for this party.

    The idea of free money has been around for a long time. Most of the people who support it seem to be the ones who are most likely to want something for nothing. That’s not what most of the rest of society might think as “fair”.

  • Ed Shepherd 19th Dec '14 - 5:23pm

    Some kind of citizen’s income is a good idea. It does away with much of the wasteful bureaucracy of the benefits system, gets rid of most benefits traps and removes the majority of humiliating “means tests”. Best of all, it would take away fear. The fear that if you lose your job you will have to go back into the labyrinth of inadequate benefits and the fear that you will be stigmatised as a “benefits scrounger”. It would not demotivate citizens. It would free and motivate citizens. People would be freer to change jobs without the risk that a new job would not work out and they are back begging for benefits again. Free to try running their own business or going back into education or trying to make a living from a hobby or art or passion. Sure, some people might decide to live off the citizens income and never try to earn anything extra but they will pay some of it back throught the numerous indirect taxes. Perhaps such people aren’t in the workplace anyway because who would employ such a person? I suspect many of the critics of this idea can conceive of work only as some kind of fulfilling, well-paid career because they have nice careers themselves. For the majority of people in often dreary, insecure and badly paid jobs, a citizens income would give them a freedom to take chances in life, to do something fulfilling and not to live in fear of “the dole”.

  • Richard Dean 19th Dec '14 - 5:37pm

    This proposal is also a one-size-fits-all one, in a context where there are possibly very wide differences between the needs of different individuals. Don’t the LibDems believe in diversity, difference, individuality? The present benefits system may not be perfect, but at least it does recognize differences, and tries to match benefits to needs.

  • Jenny Barnes 19th Dec '14 - 5:49pm

    I was the “someone” who proposed an amendment about citizen’s income. One of my reasons for doing so was that I see no possibility of UC ever being successfully implemented. The objective (as stated) of UC is that people should always be better off in work. But it relies on real time updating of income data by people who may not be computer competent or have access to th internet etc. and several databases being effectively integrated. Wishing for IT to solve one’s policy problems is common outside goverenment too, but usually someone with an eye to the bottom line calls a halt before many millions are spent on a hopeless project.
    Citizen’s income, by contrast, is implementable , and achieves the objective without expecting magical abilities from IT. As for th freeloader problem – I’m sure there are some now withe the current system. I wouldn’t expect that to increase much with a citizen’s income. Maybe a pilot rollout in competition with UC would give us some evidence.

  • Will Millinship 19th Dec '14 - 6:36pm

    I’m all for a basic income provided a) it’s set at JSA levels to begin with and 2) other related benefits remain available e.g. housing benefit. My argument would be that low paid jobs remain so because the only competition is the dole. UBI would still be a safety net, not a desire. Also, productivity in low paid jobs is dragged down by people moaning about how bad things are; I’ve been doing just that for two years.

  • You’d be a winner if you are subsisting on Jobseekers’ Allowance., or if you are a underemployed or low-earning self-employed worker.

    But if you are a full-timer on a low wage, removing the personal allowance will mean you’d lose almost as much in extra tax as you’d gain in minimum income, no? So this wouldn’t do anything to help with much working poverty.

  • I first met this idea a long time ago, and it seems to be a brilliant idea, but one that might take some explaining.

    There are details to tweak — but in essence it would be simpler than the present system and avoid some of the nasty traps that accidentally create barriers to people getting off benefits. It needs a relatively modest tweak to the tax system to mean that one recovers the Universal Basic Income from people earning more than that.

    The downsides I can see are (1) it might get flack from those who are judgemental about people on benefits, and (2) it might need some care to mesh with systems in other EU countries to avoid being done in a way that accidentally creates a barrier to the free movement of people. Neither of these are insurmountable.

    In political terms, this idea has been around for ages, but if we proposed it, it would be something of the radical centre — it would be good in itself, and a welcome change to the right-v-left dialogue.

  • I’m a supporter of a basic income because the idea that we must work to, well, survive is an unnatural aberration that’s basically an artefact of the human race’s economic thinking – both capitalist and socialist – over the past few hundred years. There’s nothing compassionate or liberal about forcing people to do soul-destroying work because the alternative is not eating.

  • Richard Dean 19th Dec '14 - 9:39pm

    In a world without a society, we must all work to survive. We must all, individually, till the ground and hunt the rabbit. Working to survive a wholly natural thing to be required to do.

  • I don’t really see the benefit over a sensible system of tapered benefits. What’s the big win here?

    Against that you set the inability of a basic income to fit the necessary circumstances of individuals. I’d need a lot more money to live in London than I do to live in Leicester and less still to live in Yorkshire so where are you going to set the level? Are you going to provide additional support for the disabled? How? At what level? And so on.

  • So multi millionaires get a hand out, the same amount as the poor who for whatever reason really need support from the state?

    And this support will be enough to live on? So nobody will need to work in McDonald’s and do crap jobs if they don’t want too? Why anyone would work in s crap job when they didn’t have to is beyond me… If it’s not enough to live on is it really a substitute for a welfare state?

  • I quite like the idea of running citizens’ income using a negative income tax band, which guarantees an income but then pulls back the initial basic payment from the extremely wealthy in the same sort of way that our current system erodes the tax-free allowance more the further in excess of the £100k mark you go. It answers one part of Mr Wallace’s point.

    The other issue, of why anyone would do an unpleasant job, overlooks the way that we are increasingly automating truly unpleasant jobs out of our economy. Also, since no citizens’ income proposal I’ve ever met tries to make us all rich, there’s plenty of scope for simply paying up for the really tough work. Without the threat of destitution hovering overhead, labour providers have a much stronger negotiating position.

  • Mr Wallace 19th Dec ’14 – 11:47pm
    “……Why anyone would work in a crap job when they didn’t have to is beyond me… ”
    This is a very good question and yet it is happening all around us now. Contrary to the myth that everyone wants to sit at home and watch TV people do indeed go out and do crap jobs.
    They do crap jobs even when they would have a better quality of life by insulating their homes, fitting solar panels and getting an allotment.
    Doing a crap job to earn money so that you can pay VAT on an inflated electricity bill to keep the energy giants in business whilst the heating the air around your house is illogical.
    Buying more food than you need at inflated prices with a ton of packaging to keep Mr Tesco and Lord Sainsbury in millionaire’s row is also illogical.
    Suffering from obesity because of the crap food that these supermarkets have sold you is also not a good idea, but people do it all the time.
    I am amazed that people do crap jobs in order to earn money to spend it on crap like cigarettes which will kill them and those around them, but people do.

    Could it be something to do with the social and economic system that peoblinder conditioned to blindly accept when they would be better off opting out of that system?
    Isn’t this the so-called “free market” system that even here in LDV some fanatics promote with zeal?

    This also begs the question — “..Why does the state subsidise crap employers to pay crap wages to people in crap jobs?”, which is the system at the moment. That is what governments have actively encouraged for at the last forty years.

  • @ John Tilley

    “This also begs the question — “..Why does the state subsidise crap employers to pay crap wages to people in crap jobs?”, which is the system at the moment. That is what governments have actively encouraged for at the last forty years”.

    With unemployment falling fast perhaps we are rapidly approaching the time when we should have a step increase in the national minimum wage and reduce the deficit by reducing the subsidy the state pays for low wages [through tax credits].

  • Robin McGhee 20th Dec '14 - 9:53am

    Still no evidence has been presented to show these proposals would discourage people from working in any significant way. Also, people seem to forget the state already gives out lots of free things. Does the NHS provide a disincentive for people to keep themselves healthy? Well yes, slightly, but the other benefits enormously outweigh this and the argument we should abolish the NHS because of this looks faintly ridiculous.

  • Richard Dean 20th Dec '14 - 10:14am

    The NHS is wholly different because working people get things in return for the taxes we pay to support it. We get a form of healthcare, an ability to see a doctor if we or our children are ill, operations if needed, etc. We get help in our existing quest to remain healthy.

    With free money, there’s no reason at all for any working person to receive anything in return for the taxes we pay to support it. Quite the opposite. It looks too much like someone else is getting help for not working, and that we’re the muggins who’s going to have to pay.

    The idea that a person needs to contribute to society – by working – in order to gain the rewards of being part of society, that idea needs to be taught to children so that they don’t expect free handouts when they grow up. Free, no-strings attached, handouts is not something that a grown up political party should be proposing,

  • Robin McGhee 20th Dec '14 - 10:31am

    “Free, no-strings attached, handouts is not something that a grown up political party should be proposing,”

    Driven on a road recently?

  • Sarah Whitebread 20th Dec '14 - 10:49am

    This is such a good debate, thank you for starting it Robin!

    I think the Citizens Income is a great idea. I’ve not seen anything in this thread yet to dissuade me of that. I find it really interesting that people immediately assume it would lead to higher unemployment without any evidence to back it up!

    What it might well do is encourage people to work fewer hours, and that would be excellent. The new economics foundation have done lots of good work on the idea of reducing the hours of the standard working week. We work far too much as a society, actually. For many people work life balance is a sort of mythical concept. This would help to redress that in a big way.

    Let’s bring a motion to our next autumn conference!

  • Richard Dean 20th Dec '14 - 11:15am

    Yes, spoiled children make all sorts of remarks about how their parents are unfair when they don’t let them get what they want! Somehow the parents have to teach the children that the world doesn’t work that way.

  • Jenny Barnes 20th Dec '14 - 11:38am

    Talking of freeloaders. How about those with large amounts of inherited wealth? Are they freeloaders? Or is that ok because their ancestors came over with the Normans and violently expropriated the land from the inhabitants? How about those who turned their peasants (under the feudal system, people belonged to the land) off in order not to pay the parish poor rate? Those who enclosed the commons? And that’s not to mention more recent freeloader candidates, like the financiers/ bankers, Fred Goodwin, etc.

  • Robin McGhee 20th Dec ’14 – 9:53am
    ” Still no evidence has been presented to show these proposals would discourage people from working in any significant way. “.

    Indeed! The slur that people sit at home and watch TV all day if they are not working is not born out by daytime TV viewing figures. Apparently the average daytime TV viewer is a woman in her sixties.

    Thank you for the original article Robin and thank you for the excellent response – ” Driven on a road recently? ”
    Five words which punctured a false argument instantly. Brilliant.

  • Richard Dean 20th Dec '14 - 12:44pm

    Five words which make no sense!

  • Richard Dean 20th Dec '14 - 12:53pm

    Free petrol? Free cars? Bank of Mum and Dad? Drive on the right if you want?

    It’s just that us workers have to make the roads, we have to maintain them, we have to clean them, and we have to police them. We also have to make the cars, extract the oil and convert it to petrol, clean the air, ,,, mop up the mess when the children do doings ….

  • Ken Palmerton 20th Dec '14 - 1:23pm

    My heartfelt thanks to Robin for restarting this discussion amongst Liberals about the Citizens income.

    Its like stepping back to the 1940s when the Womens Liberal Federation seriously addressed the issue, and met all the objections and negativism that has cropped up again here in this debate. Both the “freeloader” slur, AND the funding debate. And as they found then you have few options if you continue to confine the thinking within current accepted economic theory. Radical ideas, like the citizens income, cannot thrive whilst it is seen as yet another fruitless tweak to an already over complex tax and benifits system. Given free rein it is much more than that, it is a means to set the scene for a shift to a world of true Liberty, indeed towards a Liberal society, where ALL citizens can benifit from the fruits of their production. Liberals long ago recognised that employment, as the sole means of distributing income, wether wages salaries, or dividends, was deficient, The work of Keynes. and that unless we were willing to join the Luddites and smash the machines, this deficiency would get worse. It was also realised that taking from one, in taxation, to give to another would not close the gap either, and would only provoke further nasty “dog in the manger” atetudes to boot. The idea was raised that we needed a system that could create and issue enough revenue to buy up and consume all possible production in any time frame, and that the best way of assuring that this revenue got spent was to pay it direct into the pockets of the consumers, a group that included ALL of us. Hence the idea of the Citizens income. How much depended upon the current level of production. It was realised that this calculation was a task that only the State could undertake. No group of private money creators had the incentive or the resources to do this. This is where Beverages comment about the “Socialisation of demand ” came in. There is much to be said on this subject, but trying to confine it within the old , failed theories of the authoritarians will have us sqabbling for yet another generation, and we return to the miseries of the poor laws.


  • The incentivisation Richard Dean speaks of has two sides.

    One is the incentive to work in order to improve one’s situation. Systems like our present one with its welfare traps remove this incentive in certain cases, where working would result in a reduced grant and thus being worse off. This, combined with the paternalistic testing, assessing and judging makes for a poor system. Preserving the incentive of greater rewards for more work is important, culturally and economically. Not all proposals for a univeral citizens’ income do this well, so we need to be careful.

    The other incentive though is the one to escape destitution and starvation. In my view, society is at the core a tool that helps us all collectively avoid destitution more effectively than we could if we all tried to survive on our own labour and skills. Is it right that our cultural mores regarding work ethic and contribution to society use the threat of hunger, homelessness and, frankly, death by poverty as the stick to enforce conformity?

    The tool I mentioned earlier, the negative income tax, is I think the most elegant and politically feasible version of the basic income because it doesn’t automatically create welfare traps, nor does is require a complex system of means-testing or compliance confirmation or whatever. Doesn’t hurt that it fits in with our recent income tax threshold raising enthusiasm, either.

    This being done, we would then be free to shift the burden of taxation onto progressive taxation of consumption and hoarding rather than leaving it resting on income and effort. That said, I’m not wedded permanently to the idea of doing it that way and only that way. A guaranteed basic income is one of the best examples of a liberal policy available and we should be keen to get a workable version of it onto our manifesto as soon as possible.

  • Richard Dean 20th Dec '14 - 4:54pm

    The tool that we do presently try to use, to avoid starvation and destitution, does partly consist of free money, but this money does have some strings attached and it’s not given to everyone, only to those who need it.

    The two aspects – strings and need – are important if the people who work to provide the money to pay for these things are to accept that they should indeed pay. Remove one of them and you’ll not get people supporting that system, in my opinion, and the result of lack of support is that votes go elsewhere and you get a different party’s idea of what a benefits system should be.

    Money, however, is only a small part of a solution to starvation and destitution. People who are falling to that low level generally need different kinds of help. Some will be depressed, some will be confused or ignorant about the processes of finding solutions, many will be un-skilled, some will have run up debts they have no hope of paying. UBI won’t solve any of that.

  • This is a marvellous debate because the Lib Dems are finally looking at radical alternatives to the present benefits system. I think it’s unrealistic to expect UBI to solve all potential problems on its initial airing but it does seem like an excellent starting point. My preference is for a system along the lines of Bill le Bretons Idea so that people are contributing to society in return for a basic income and I see no reason why those with disability shouldn’t receive a top up. Long term and structural unemployment could also be addressed through training schemes.

    The present system is full of inconsistencies and unfairness. For example I see no reason why I and my husband receive a winter fuel allowance when we can afford to heat and eat so we give it away each year. The free bus pass for pensioners is also ridiculous . Why should people who are fit and healthy and who go on several foreign holidays each year get free transport?

    Please can we avoid getting hung up on means testing? It’s nearly a hundred years ago since the intrusive visits by social workers to see if people were cohabiting led to this hated epithet. When supermarkets keep all sorts ofdata about our spending habits it must be possible for a new Income Tax system to provide a unified tax benefits system without all the delays which people are suffering from.

    So a decent guaranteed income, help with doing a job, a tax system which enables those in need to receive benefit without paying money to the wealthy sounds like a good place to start working on an innovative idea.

  • Jane Ann Liston 20th Dec '14 - 8:05pm

    One anomaly a basic income for everybody would solve is the fact that while income tax is based on the individual’s income, benefits are awarded (or not!) to the household. So when I was working, I paid my own tax on my earnings, regardless of what my other half earned, but now that I am unemployed I get nothing except my NI credits (and that only after jumping through all the hoops!) because of my husband’s income. Assumptions are made by the system that an earning member of a household will support a non-earner but that doesn’t always happen. Not to mention the fact that it is most unpleasant having to ask someone for money all the time; yet another humiliation heaped upon the less well-off. So if a basic/universal/citizens/ income addresses that discrepancy, I’m all for it. Incidentally, it was the Tories who abolished the concept of a wife’s income being treated as her husband’s, back in 1988. Surely we can cap that?

  • For those against the idea of a Universal Basic Income, I have one question for you.

    What’s your plan to deal with the inevitable automation of jobs causing massive unemployment over the coming decades?

  • Richard Dean 21st Dec '14 - 12:42pm

    @Mark S
    The plan will likely include re-training, so that people whose skills are no longer needed would be trained up in skills that remain needed or in new skills. Also, the plan would likely involve changes to the length of the working week, so that the work that remained could be distributed more evenly..

  • Chris Manners 21st Dec '14 - 2:56pm

    Not convinced by this at all. To have the income at a liveable level, it’ll cost a lot more than £4bn extra. And that (presumably) doesn’t include housing and disability benefits which have to be extra.

    I do though miss the Lib Dems of old, putting forward ideas like this. Sadly, your leader has well and truly shut that down, with his appeal for “serious” votes.

  • Dean Crofts 21st Dec '14 - 4:05pm

    How is it liberal for an individual to expect and rely on the state?

    How benefits system is broken but this is not the answer

    Education, Skills, Support and individuals using their rights and responsibilities to create a fair society must be the answer.

    This includes employers paying a wage individuals can support their families on and the state not taking income as tax. Tax on consumption must also be the way forward.

  • Dean Crofts 21st Dec '14 - 4:07pm

    Sorry mis-spell How is meant to be Our.

  • Suzanne fletcher 21st Dec '14 - 6:53pm

    Not saying a lot as on “Sick leave” right now, but will say
    Thanks for starting the debate again.
    A lot of what I would call “proper questions” asked here, and suggest next way forward is to set up some sort of group to enable discussion, with an event at autumn conference,, something like a consultation session, well chaired, to thrash out some of the ideas put forward, and answer questions. Then work on a motion for one of the 2016 conferences.It is liberal and radical, so let’s go for making real progress on it, but not spend energy needed for the May elections.
    Ps. I’ve seen many people from the “hard working families ” group who through no fault of their own are suddenly without any income at all. A basic income would be invaluable for such.
    Pps. Having been around when daytime TV on recently it is full of things those watching will want to buy, that could not be afforded on a citizens income. Incentive to go and earn more,

  • Bill le Breton 21st Dec '14 - 8:01pm

    Thanks Sue S – Dec 20th 5.57pm. I was beginning to think that no one apart from Andrew Ducker had bothered to look at a system which I outlined and which I believe answers every objection made by those concerned with free-loading, questions on administration costs and apparent unaffordability.

    For those who didn’t see it as they entered this thread, it was posted 19th Dec ’14 – 11:48am. It just a sketch of an idea but the brains trust that looks in here could surely develop it.

  • @Richard Dean

    Retrain to do what though? Some estimates claim that upto 45% of workers will lose their jobs to automation in the next 20 years. Retraining and working less hours are short term solutions. Currently, only about 60% of people aged 16+ are working. 25 years from now, that will be closer to around 30% according to the above estimates. Some people claim that new job markets will open up and they probably will, butt why would those jobs go to people instead of the far more efficient machines?

    Universal Basic Income is the only realistic solution to this inevitable upcoming crisis.

  • Richard Dean 22nd Dec '14 - 1:36am

    Re-train to control the machines!

  • Robin McGhee 22nd Dec '14 - 1:22pm

    Interesting a few people have said these proposals would increase people’s control by the state. It would in fact massively reduce it by eliminating a great deal of means-testing and bureaucracy. Whereas now the state (so to speak) can basically decide whether to starve you to death by refusing benefits, under this system that would be impossible as everyone would be entitled to the basic income.

  • A Social Liberal 22nd Dec '14 - 2:37pm

    Richard Dean said “Retrain to control the machines”

    100 workers are replaced by 50 robots, those robots are controlled by 5 workers. 95 workers are out of a job.

    An over simplification but demonstrates how things go.

  • Richard Dean 22nd Dec '14 - 3:13pm

    Luddites ahoy?

    Here’s an old joke …

    The factory of the future will be run by a man and a dog.

    The man’s job will be to feed the dog.

    The dog’s job will be to make sure the man don’t mess with the machines!

    Happy Christmas. The New Year is always better than the Old (Old English Proverb)

  • One aspect of a Universal Basic Income not mentioned is that it would help alleviate pressure on cities by allowing those that wish to do so, to live a simpler life in a part of the country with low employment, wages and thus low cost of living. These people might supplement their basic income with low paid work in local service provision.

    Those who wish to pursue a more varied, hectic and luxurious life would head to the cities with the necessary skills to seek the work they wish to participate in.

    Note my phrasing, work they wish to participate in. A UBI would allow more people to participate in work they are passionate about and that will lead to better productivity.

  • A Social Liberal 23rd Dec '14 - 12:26pm

    Richard Dean

    A little misunderstanding here. I was not defending the view, just pointing out that retraining to service the machines only employs a fraction of the workforce replaced by those machines, which nulllifies your post.

  • Dean Crofts 23rd Dec '14 - 7:29pm

    @eric libertarianism is to be free from government .. i make my first point not sure giving everyone a UBI would do this, who pays for it if not the individual?

  • @Richard Dean

    A Luddite would want policies to maintain the status quo by restricting the implementation of automation, not policies that allow automation. to occur without devastating society in process.

  • Tsar Nicolas 26th Dec '14 - 8:48am

    Back in 1979/1980 there was a series on the telly called The Mighty Micro. It was all about how the silicon chip was going to liberate us from the necessity of work – by 2005, it was predicted, we would need to work no more than 5 hours per week on average.

    Back about ten years ago I came across the paperback in my attic and re-read this prediction, and wondered what had happened.

    Then I pondered the fact that in work I was then receiving about 100 emails per day – mostly on pointless topics, mostly by virtue of being cc’d into everything.

    In fact, much of my working day was being spent on dealing with these pointless mandacities – none of them made any more palatable by being urged on the bottom to save the environment by not printing them out (and thus completely ignoring the environmental cost of the electricity consumed by billions upon billions of similarly useless acts of communication across the planet).

    My point is this – isn’t much, if not most, “work” nowadays of this completely trivial, unnecessary nature?

  • A non-monetary front-loaded poverty-level basic income (Negative Income Tax) for citizens aged 16-64 contained within a balanced budget (with negative deficits) may enhance the ‘wealth effect’. This may be a sustainable asset growth alternative to temporary Quantitative Easing (based on increasing national debt and interest expense) to provide a minimum liquidity flow in the economy as a minimum income stream. It may be a viable and economically liberal idea that favors entrepreneurship, citizens and the free market.

    The idea has the implication of raising the value of the currency to increase consumer purchasing power, encouraging trade policy over monetary policy and domestic policy over foreign policy. This allows foreign currencies to also float uptheir consumer purchasing power to stimulate the wealth effect (at their discretion) or perhaps suffer carry trade losses which may financially benefit the nation either way depending on FDI in the local currency.

    As a social side effect, it helps remove the welfare trap. Varying levels of support for this political plank may be found in conservative, liberal, labor, green and perhaps even tory constituencies, etc. I believe ukip already favors a version of this and the notion may be politically attractive (and savvy) for ballot box returns.

    Complement it with a flat tax above the poverty line to increase the social and economic effect. Pair it with a ‘Dennis Milner’ national social credit/debit to citizens which synchronizes currency and capital(goods & services) liquidity flows in a rules-based monetary system to complete the circle. Inflate it or deflate it to heat up or cool down the economy.

    Rhys-Williams, Friedman and others are not around to dust off and trot out the NIT idea(name still bugs me) nor Rothbard to insist on a balanced budget (if he agreed with the idea at all). Do a Bastiat check for yourself to see if this may increase the wealth of the nation of if something is unseen or broken. Examine it at every angle. I do not believe Keynes would object to non-deficit government spending to stimulate the economy to increase a first-order imputational (Menger) Keynesian aggregate demand to increase GDP or have fault with an Hayekian first-order minimum income.

    In the states, $1 Trillion is spent on welfare[1]. Of roughly 60 million[2] below the poverty line and an individual poverty line of near to $12 Thousand[3], the approximate cost is $720 Billion.
    [1] CRS Report: Welfare Spending The Largest Item In The Federal Budget | Jeff Sessions
    [2] Over $60,000 in Welfare Spent Per Household in Poverty |OCT 26, 2012 | DANIEL HALPER
    [3] 2014 Poverty Guidelines | US Department of Health and Human Services

    NOTE: It is human nature to want more and time has shown people are willing to work in order to acquire more.

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