Tag Archives: basic income

How we could abolish relative poverty in five years

Do we want to abolish relative poverty in five years? Here’s one way we could do it.

In December the Joseph Rowntree Foundation published its report UK Poverty 2017

The report states:

14 million people live in poverty in the UK – over one in five of the population. This is made up of eight million working-age adults, four million children and 1.9 million pensioners. 8 million live in families where at least one person is in work.

The question for Liberal Democrats is how can we eliminate relative poverty over the course of a five year Parliament.

The JRF report defines relative poverty as “when a family has an income of less
than 60% of median income for their family type, after housing costs”. They set out levels of income (after Income Tax, National Insurance and housing cost have been deducted) needed for different types of family units:

Family type £ per week, equivalised,

2015/16 prices

Couple with no children 248
Single with no children 144
Couple with two children aged 5 and 14 401
Single with two children aged 5 and 14 297

Source: Households Below Average Income 2015/16, table 2.2db

It is depressing to recognise that poverty among pensioners is increasing (from 13% in 2011/12 to 16% in 2015/16). In 2015/16 the Pension guarantee was set to £151.20 for single people and £230.85 for couples while the pension rates were only £115.95 (single) and £185.45 (couples). To eliminate poverty for couples we could increase the couple rate by 1.5% above the normal increase for 5 years (totally 7.73% compared to a shortfall of 7.43%)

Posted in Op-eds | Also tagged | 37 Comments

Why Basic Income Should Be Lib Dem Policy

Over the last 70 years, an inexorable long-term structural change has taken place in the economy.

Source: ONS, defining ‘labour income’= wages + self-employed earnings

 

It’s very clear that aggregate ‘labour income’ (=wages + self-employed earnings) has declined compared to consumer expenditure, with a turning point in 1995, such that

  1. From 1948 to 1995, labour income exceeded consumer expenditure.
  2. From 1995 to 2016, consumer expenditure now increasingly exceeds labour income.

By 2016, labour income only funded 86% of consumer expenditure. 14% of consumer expenditure was funded by unearned income. This trend is structural, …

Posted in Op-eds | Also tagged | 47 Comments

Latest Social Liberal Forum publication: Universal Basic Income as a tool for tax and benefit reform

At the recent SLF Annual Conference in July, a well-attended fringe session discussed the benefits and drawbacks of Basic Income.

My contention, as Chair of this session, was that we now need to be looking more closely at Basic Income, given increasing robotisation and technological change that will massively shake up conventional work, and given that our welfare system is creaking and needs modernisation. Basic Income is a policy that seems fundamentally socially liberal, and so it seems to naturally deserve attention from the SLF and all who are socially liberal.

Therefore the SLF is very pleased …

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A Liberal Path Towards a Basic Income

Is the Basic Income an idea whose time has come?” asked Caron, back in February and it seems now that two-thirds of the British public agree.

The advantages seem to speak for themselves: a universal cash payment from the government, means that no one needs to starve, no one is trapped in a bad work situation, and perhaps most important from a Liberal point of view, puts the choices in the hands of the recipient not leaving them beholden to the generosity of the government.

Posted in Op-eds | Also tagged | 47 Comments

What’s wrong with the Chancellor’s Autumn Statement?

There are three huge defects in the Chancellor’s autumn statement

1 Technical

The Chancellor fundamentally believes that the government budget can and should be balanced, or even run in surplus. This basic accounting assumption drives his whole thinking. But facts prove him, and the traditional thinking of the whole financial establishment, wrong on this. He has been unable to eliminate the deficit. He will not be able to eliminate it. In modern high technology, high productivity economies, deficit is inevitable, and manageable.

There’s a huge problem in thinking here. The Chancellor approaches economic policy like an accountant, rather than as an economist. Books should balance. He talks about what we can afford, purely in financial terms. But it’s not money which gives value to the real economy, but rather it’s real economic activity which gives money its value. Economic activity creates financial value, and not the other way round. What we can afford has to be measured in real resources of people, skills, natural resources, technology and capital assets. A thought experiment demonstrates this. If it were possible to plug a machine into the earth to produce the whole GDP without labour and therefore without wages, then the money vouchers the government would have to allocate would all be a total financial deficit each year. Money does not have to be backed either by gold, or by the sale of government bonds, but only by output GDP. Deficits are here to stay. Facts support this hypothesis.

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Recent Comments

  • User AvatarJoe Bourke 18th Dec - 11:43pm
    Peter Martin, yes I do realise that trying to balance the budget is counter-productive. A big part of the problem is the way government does...
  • User AvatarJayne Mansfield 18th Dec - 11:17pm
    @ Mick Taylor, If you vote for a motion of no confidence in the government knowing it is unlikely to pass, ( which it is),...
  • User AvatarPeter Martin 18th Dec - 11:06pm
    @ Frankie, “The Euro will fail, trust me I’m an economist” The euro doesn't have to fail. If the US$ can work so can the...
  • User AvatarPeter Martin 18th Dec - 10:48pm
    @ JoeB, 'The 2017 Conservative Party manifesto pledged to eliminate the deficit by the “middle of the next decade”' Presumably it means the Govt budget...
  • User AvatarAlex Macfie 18th Dec - 10:44pm
    I wouldn't have expected to be in agreement with Paul and David either, but there you go. Just to finish the bit that fell victim...
  • User AvatarDavid Evans 18th Dec - 10:26pm
    Joe, on this matter Alex MacFie and Paul Holmes are spot on. Your option, I'm sad to say, is pretending we are a powerful player,...