Tag Archives: ubi

UBI, a new social contract and citizen identity

We can’t avoid facing up to the issue of citizen identity – the visibility or invisibility of citizens to the state, the impact of the digital transformation on the collection, retention and integration of public data, and the safeguards that need to be built in to prevent its abuse. The private sector has already moved a long way down that path. A thriving sector of data scientists now works on aspects of personal verification: of age (for access to adult content online, for purchases of alcohol, for concessions for pensioners), financial status and probity, confirmation of qualifications and certification of address.

The government has been behind the curve on these developments since the Government Digital Service’s ‘Verify’ proposals ran into resistance six years ago – from Whitehall Departments unwilling and unauthorised to share data, and from Conservative ministers dithering between a private-public partnership and the hope of making a profit from access to public data. That’s leaving significant groups of citizens and residents increasingly excluded, as both government and private sector move online.

Posted in Op-eds | 10 Comments

Basic Income – from party policy to electable manifesto commitment

Embed from Getty Images

Having long campaigned on LDV for Universal Basic Income, it was heartening to see UBI adopted as party policy at Conference. The challenge now is to transform Conference vote into a credible manifesto commitment, and a persuasive electable UBI policy.

Recent LDV articles have advocated UBI on various grounds, including Leyla Moran on precarity, Paul Hindley and Daniel Duggan on social justice, Anton Georgiou on inequality, and Jane Dodds on empowerment. Others including  Malcolm Berwick-Gooding have asked how UBI can be funded. Chris Northwood and George Kendall have proposed income tax, and Darren Martin a transaction micro-tax.

The web site The Case for Basic Income seeks to set out the main arguments for UBI. These are

  • social justice, addressing inequality, including gender inequality
  • welfare system efficiency and effectiveness, avoiding intrusive means-testing
  • economic necessity, acknowledging work reduction through automation, avoiding economic crisis and austerity
  • human flourishing, enabling wider choice of lifestyle
  • environmental responsibility, creating income other than by employment and more output

These are powerful, appealing, and convincing arguments, which we should fully deploy.

We also have to respond to the two main counter-arguments. Many claim that UBI presents a work disincentive. But in fact, it is current welfare benefits which erect a disincentive to work by being withdrawn £ for £ if a recipient finds work, creating an enormous marginal rate of tax, and hence the infamous ‘unemployment trap’. UBI avoids this as it is retained in full if someone starts to work.

Posted in Op-eds | Also tagged | 241 Comments

Selling UBI: making it a good policy that wins us votes

Embed from Getty Images

This is a follow-on post to the one published yesterday.

The real issue with UBI is not economic; it has been shown to provide no disincentive to work and most people are just paying in cash via taxes and getting that cash straight back. It doesn’t really affect most household finances to any significant degree. Instead the problem with UBI is political. How do we make it popular and keep it simple? That’s what my proposal is about.

The elevator pitch is this: “Voters are clear that they want tax dodgers to pay their fair share. That’s why the Liberal Democrats want to use taxes that are hard for the super rich and corporations to avoid and then, to make absolutely sure everyday voters don’t get taxed unfairly, we’re going to send you each a cheque from the proceeds. Think of it as a VAT rebate.”

Voters really are clear that they want higher taxes on the wealthy and corporations. This reframes the discussion in economically populist terms (something Liberal Democrats tend to hate doing but works) but it doesn’t change the policy at all. It remains good economics and it really does allow us to shift towards using taxes the wealthy and corporations find hard to avoid. The Scandinavian countries, for example, make heavy use of goods and services taxes for this reason.

Now I know Lib Dems are going to want to use Land Value Tax. That’s economically sound obviously, but that’s selling two hard things at once. I’d propose this:

We would give a universal basic income of £40/week to everyone in the first year of the parliament, paid for by raising VAT. That would rise by £40/week each year of the parliament until we hit £200/week in the final year. That’s £10,400 in that final year, presumably 2028 so £10,400 will be worth slightly less than now due to inflation. By the time we get to the final couple of years we can use LVT to get up to the full amount. VAT plus a UBI is progressive and the Scandinavians have shown it doesn’t slow economic growth.

Posted in Op-eds | Also tagged | 28 Comments

Which UBI should we support?

Embed from Getty Images

In his recent piece HERE George Kendall asks us which Universal Basic Income proposal we should choose and how can we say if it’s affordable? How should UBI advocates respond?

What I intend to do here is set out how I believe we should assess each UBI proposal that comes our way; however, the first step is to accept the principle of UBI at conference and acknowledge it needs to be a high enough amount to live on. My conclusion will be that an “out of the box” proposal like that from Compass is actually just fine but that Lib Dems should debate several options once we’ve accepted the principle.

What makes costing UBI complicated is that normally governments take in tax revenue and spend it in return for some particular thing. For example we might decide to spend another £100 billion on the NHS and we must decide if that thing, i.e. the extra NHS services we get as a result, are worth the cost, the £100 billion. UBI isn’t like that. In UBI the government takes in, say, £500 billion and then hands out that same £500 billion. We don’t get a product or service and most of us get some amount of the cash we paid in back as… well… cash.

If I hand you £100 and you then hand me £100 I’m not £100 worse off am I? If I hand you £100 and you give me £80 I’m not £100 worse off, I’m £20 worse off. That’s very different from spending £100 and then getting a mobile phone. Is the phone worth £100? Can you get a good phone for £100? Those questions don’t make sense with UBI in the way they do with healthcare.

Instead what we are “purchasing” is a guarantee of no poverty for any UK citizen and the cost is not the whole tax bill but instead it is any loss of incentives to work and any inflation that may result. This is where evidence really matters! We are an evidence based party so lets consider the evidence.

Posted in Op-eds | Also tagged | 33 Comments

GDP share; a more timely and effective alternative to Universal Basic Income

That’s your bloody GDP. It is not ours’. Thus a Brexit supporter expressed their detachment from the national economy in 2016.

This proposal addresses both the perception and reality behind this comment. It provides poorer households with a bigger share of GDP, achieving a more deliverable redistribution of income than a Universal Basic Income. It makes more people feel that this is ‘our GDP’. It also steers the national conversation about growth towards ‘net zero’.

UBI and its problems

A conference motion calls for the party to campaign for UBI.

But the practicalities mean we are doomed to deliver a very small and disappointing version of a very big and (somewhat) controversial idea. The UBI promise of a reasonable income for everyone is not achievable. Recent work by sympathetic academics has shown how far we can (and can’t) get. Even if we raise higher rate taxes a lot and get rid of personal allowances (so that for most people there is no net benefit) to fund a UBI, we cannot sustainably pay a UBI of much more than £3000. At this level, many poor people would lose out unless all or most current means-tested benefits stay in place – thus forgoing one of the significant supposed advantages of UBI. And even to get to £3000, we would likely have deployed the money from all of our tax-raising ideas on this one concept cutting out anything else we might want to do.

Posted in Op-eds | Also tagged and | 8 Comments

Leadership candidates could and should set out what they mean by UBI

Embed from Getty Images

Universal Basic Income (UBI) has many attractions as a policy. It is radical, an easy concept to explain and – depending how it is implemented – may be progressive.

Both our leadership candidates are backing it. Neither has been as specific as they could and should be about what they are proposing. There is enough economic analysis available for it to be perfectly feasible for them both to be more specific.

The fundamental question is whether we can afford a level of UBI which is worth having and does not create lots of losers, particularly at the bottom end of the income distribution if means tested benefits are withdrawn or modified.

On the economics, our candidates refer mainly to analysis completed by Compass, a think tank promoting UBI.  This is the most detailed recent economic work that is publicly available on a UBI for the UK.  The work has some gaps (which it acknowledges) but it does us a big service by showing the relationships between costs and benefits, and by considering properly how different income groups are affected.

It is not honest to say blandly that the Compass analysis shows that ‘UBI works’.  But it does show what the constraints are, and means our candidates could say more precisely what they are proposing.

Posted in Op-eds | Also tagged | 58 Comments

How to make a just society – Justice Capitalism then UBI

Embed from Getty Images

UBI (Universal or Unconditional Basic Income) is a brilliant idea. A majority of people support it. Let’s implement it worldwide. But to pay for it, we first must enact Justice Capitalism, that is, Capitalism that is fair, equal, and balanced for everyone.

But how will UBI be funded? The Tax system is broken and cannot be fixed to pay for UBI. Governments have been trying to fix the tax code forever, but it just gets more complicated with more and more loopholes. Corporations, criminals, corrupt politicians, and the 1%, hide money in Tax Havens or they game the tax rules to pay little or no taxes. Actions such as tax increases and eliminating tax havens will contribute to funding UBI but this will not be enough for the long term. Printing money, as is happening now, is also not a good solution to fund UBI as it just creates inflation which has too many negative consequences.

The best way to fund UBI is by Justice Capitalism.

The money should not come from taxation, but a dividend, financed from the returns on all our human capital; a “public” percentage of companies’ profits. Also, we will eliminate tax havens and the estimated $32 trillion hidden there. We will institute a tax on extreme wealth, a speculation tax (i.e HFT High-Frequency Trading), and a robot tax on firms that eliminate jobs by AI/automation. With this start to funding UBI, we will implement it.

Watch economist and former Greek Finance Minister @yanisvaroufakis explain it in a 4-minute video: #JusticeCapThenUBI

Posted in Op-eds | Also tagged | 44 Comments

The social justice argument for a Universal Basic Income

Embed from Getty Images

Recently, there has been much discussion regarding the desirability of a Universal Basic Income. Arguments used to justify it range from providing security, to alleviating poverty, to increasing freedom, to nurturing a sense of social cohesion. However, one of the most persuasive arguments is that based on justice: on each getting what is their due.

Historically, liberals have tended to be most familiar with, and sympathetic to, John Locke’s justification of property ownership. For Locke, the world initially belonged to everyone, but by individuals mixing their labour with land they came to own it (the possibility that such individuals should simply lose their labour seems not to have occurred to Locke). As long as those who do not possess land, including their descendants, are better off than they would have otherwise been (those who, for example, own no land and work the land of others have, Lockeans would suggest, avoided the ‘tragedy of the commons’ and are thus better off) then the distribution of property, including to later generations via inheritance or sale, is justified.

However, another liberal tradition, one we might call a ‘left-libertarian’ one, and including Henry George, a proponent of a Land Valuation Tax, takes a different view. The world was, and remains, commonly owned; we are all joint heirs to the world. For the left-libertarian, those who claimed ownership of land deprived the community of its assets and, as a result, those who benefit from land ownership today, whether by inheritance or sale, may be likened to the recipients of stolen goods; the passage of time does not turn a wrong into a right. As the Victorian thinker Herbert Spencer wrote in 1851, “The original deeds were written with the sword, rather than with the pen: not lawyers, but soldiers, were the conveyancers: blows were the current coin given in payment; and for seals, blood was used in preference to wax” (Spencer would later adopt a much more conservative attitude towards land ownership; some time ago I purchased a letter by Spencer in which he made clear his refusal to permit the republication of the above and other similarly offending passages). Essentially, for such left-libertarians, much wealth today rests on illegitimate grounds.

Posted in Op-eds | Also tagged | 13 Comments

In debating UBI, we need to be clear what we’re talking about

Embed from Getty Images

In Stephen O’Brien’s recent post on this website entitled “Why we shouldn’t just jump on the UBI bandwagon”, he makes a series of points in opposition to a Universal Basic Income (UBI). The difficulty with his criticisms is that he argues against a version of UBI almost nobody is proposing. If we are to have a constructive discussion about UBI as a party, we need to make sure that both supporters and detractors are talking about the same thing.

First, the £830-a-month proposal Stephen critiques appears to be plucked out of nowhere. There has been no substantive proposal along these lines made. If we were to agree on the principle of UBI, we would of course need to work out precisely how it would work and the exact level it would be set at. In order to be a “basic” income, however, it is likely that it would need to be higher than this, neutralising any objection that Universal Credit currently provides more than UBI would.

Stephen also makes an assumption that UBI would totally replace all existing welfare benefits full stop. So, in the example he sets up to criticise UBI, he implies that it would abolish all disability benefits. This is a proposal I have never heard being made by anyone who supports the policy. Almost all its major supporters agree that there would have to be uplifts for those with disabilities, and in other categories. Nobody would lose out.

In general, it should be noted that the primary point of UBI is to eradicate economic insecurity. A key cause of economic insecurity is the waiting period for welfare payments, inherent in our current system: the Trussell Trust views it as the reason for a significant proportion of food bank usage, for example. This delay is an in-built feature of the current welfare system, and other programmes like a negative income tax (NIT). UBI abolishes it entirely by giving all people unconditional payments. Under it, nobody ever has to wait to be assessed and processed when they suddenly fall on hard times.

Posted in Op-eds | Also tagged | 57 Comments

Jane Dodds writes: Why UBI is the only way forward

Over the past few weeks, we’ve seen the spread of Corona Virus continue at a frightening pace. Countries around the world are taking increasingly more authoritarian steps to try and contain the spread before it is too late to stop it.

A consequence of this has been millions of people left in limbo, unsure of what they’re going to do as the lockdown increases. Across the UK schools have closed and many businesses are slowly shutting down due to concerns over staff/customer safety and lack of custom.

But as the UK grinds to a halt, people’s lives simply do not stop. People still have bills coming in, they still have a mortgage/rent to pay and they still need to be able to put food on their table. However, for many even funding these bare essentials will be difficult.

Many small and independent shops are having to lay off staff or close outright, this means for many thousands of people their source of income and livelihood disappears overnight. I welcome the recent moves by the UK, Scottish and Welsh Governments to support small businesses, but they simply haven’t gone far enough to support people themselves.

So, what happens if you lose your job due to Covid-19? You’re either forced to try and find a new job very quickly (almost impossible given the economic standstill) or apply for Universal Credit.

Universal Credit is an abhorrent system, one which lacks any compassion or grounding in reality. How is someone supposed to go five weeks without any support? How are they supposed to feed their families and keep up with their bills on just £80 a week?

Posted in Op-eds | Also tagged | 100 Comments
Advert



Recent Comments

    No recent comment found.