“UBI” (Universal Basic income) has staggered and lurched in Lib Dem Land. I believe most of the arguments against it are the prejudices of ignorance or the handicaps of expertise. I shall try to explain why and how UBI and PR must and can work in harness. I shall not here consider the objections to it, but I do hope others will.
UBI is not too expensive – it should be managed by the Inland Revenue, and subject to Income Tax – simply one more thing to add to each taxpayer’s Income Tax total bill. Everyone receiving UBI would pay Income Tax at the rate appropriate to his or her means. Say 10%, perhaps, for those without any other Income at all? Enough for everyone to recognise that everyone getting UBI is a payer of Income Tax – and well aware of the fact.
Clearly that would require much re-arranging of Income Tax rules and rates. But that will happen anyway, since there can be no such change before we have elected the House of Commons by Proportional Representation. That will be all the sooner thanks to Boris’s laying waste to the Conservatives.
The Labour Party has (timorously?) declined to endorse either idea, despite having commissioned a Paper on UBI from the distinguished academic, Prof Guy Standing.
I find myself dealing with another important digression. On 1st. Dec 2017 the Guardian published a letter from Caroline Lucas, The Green Party’s sole MP, urged a change in the way we look at the Economy, replacing (for many purposes) the way we size it up or measure it. We ought, she suggested, to stop worshipping at the shrine of GDP – so loved by the commentators, the wealthy, the MPs – and instead look at it with spectacles that can make out a more human and useful map of the Economy. This alternative perspective of how the nation’s households are prospering – or are not – looks at the National Income, not at the Product, the GDP.
And one very illuminating diagram produced and published by the Office for National Statistics (ONS) shows how money reaches Household purses and pockets, ready for spending, or saving, of course. It’s an eye-opener. It shows three elements: Household-Incomes-plus-Benefits-minus-Taxes, and the consequent new Total.
Back to the central point. The ONS examines and sets out in a simple but startling diagram with this tasty mouthful of a label:
The “Top” (ONS word) quintile of the population receives such a large income, one way and another, that it can be heavily taxed, and STILL be so much better off than even the 4th quintile. Do we LibDems feel that is an excessive imbalance, over-generous to the ONS “Top” Quintile?
That brings me back to UBI. I suggest that we drop that dreary name and adopt a bigger and more truly illuminating label: the NATIONAL INCOME DIVIDEND (NID). The NID will not be enacted until we get Proportional Representation in Parliament. Why? Because PR is such a good and Democratic idea. Perhaps that’s how and why so many European and other nations have overtaken our own dear sad old limping Islands – so retarded , Economics-wise – and FPTP foolish?
Some will see above, perhaps, the ghosts of the correspondence in LibDemVoice a year and a half ago in response to a clarion call for a LibDem ‘Big Idea’. If there is to be anything worthwhile to follow it, we LDs must start now, I believe. Aiming for great things in say 2029, as well as 2024, of course!
* Roger Lake is a member in York, who was a Civil Engineer, but retrained and taught in a Polytechnic Humanities Dept. Retiring at 50, he turned painter, and JP, and LD footslogger.
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27 Comments
seeing reference to the Inland Revenue I thought you must be a kiwi?
Once again another article in favour of UBI with no indication of what the level of payment should actually be.
And if it is being suggested that everyone on UBI (with no other income) should pay income tax, perhaps at 10 per cent, that really does raise the issue of what the actual level of payment should be. At present the tax free personal allowance is £12,570 (sadly frozen since 2020/21 and will be for a few more years). Are we really suggesting that we should start taxing 10 per cent of a person’s income, if it is as low as this? Or are we suggesting the UBI we much higher than £12,570? Advocating a policy, with no detail of how it will work, doesn’t seem to make sense to me – yet that seems the repeated practice of UBI advocates.
Has ANYBODY done research as to what the level of UBI would be .Somebody could start at the level of 12,570 pounds to see if that is too low or high?
REAL arithmetic will have to be done to see how feasible it is.
If we are to be serious about fighting poverty we must look at the whole economy not just the present tax system. We must look at in particular the cost of rents and mortgages. I suggest also a consideration of the companies act and the responsibilities of directors. I welcome a discusión of UBI, but hope this can take place in the context of an analysis of how are society really works.
@Tom Harney
“f we are to be serious about fighting poverty we must look at the whole economy not just the present tax system.”
Is anyone ever looking at the present tax system and the huge number of ways in which the wealthy who can afford expensive accountants to find all the dodges?
https://www.theguardian.com/commentisfree/2023/nov/30/britain-margaret-hodge-commons-tories-economy-labour
And given the ongoing stealth tax problem of frozen tax thresholds the system definitely needs looking at – now!
My apologies to all responders! I began last night, but was obliged to suspend the attempt. Instead of repeating, I begin again to try penetrating to the core, regretting that too many correspondents have not troubled to read my title:” UBI and PR will work together”.
I am 84, and my wits are going, and I cannot trust my laptop. So please read the title again, and recognise that the crucial word in my title is TOGETHER.
Proportional Representation is approaching, propelled largely by the ludicrously tragic bunglings of Boris and his successors — but also retarded by them. The next General Election is imminent and we know how it will ‘work’. The LDs may perish, their form so dull. (Did you read that letter in the “i” newspaper?) So we must NOW be looking further ahead, and energetically doing all we can to promote PR.
WHY? We know PR will be fairer, with all major beliefs or hobby-horses getting a real potent say in events and developments. The currently hapless Greens will get more seats in the PR House of Commons than we will — has that occurred to us?
PR is coming: soon, we hope. We must harness that opportunity to promote PR and thus
make UBI achievable under its future name: the National Income Dividend. Questions, PLEASE.
PR will help if we get away from our determination to always use the model of the empowers of Rome and decide that a single person will be in charge. If we wanted to investigate this idea it would be easy to try different methods in our own party. How near are we to having a model of democracy which will show how to involve everyone in decision making?
As you know, I must be brief, so may sound rude: forgive me, everyone!
The Labour Party has (timorously?) declined to endorse either idea [UBI and PR] despite having commissioned a Paper on UBI from the very distinguished academic, Prof Guy Standing. And the Guardian published [6th May 2019] a somewhat un-warranted headline about the Professor’s conclusions, declaring “UBI won’t work. Let’s boost the public realm instead” as a title-line over its own careful review of Standing’s Paper by Anna Coote. That rather unfairly twists the truth, in my opinion: what is yours?
And that Profile in the Guardian some weeks ago of our own Leader, so cosy and nice. Was that generous, or . . . . ?
So how do we all stand, confronting the looming PR? Ought we to be considering offering a provisional friendly electoral pact with the Greens, to stand down in a third of our constituencies, in return for reciprocating in our others. Both parties, I believe, would gain seats early next year.
What do you think? (Who knows — perhaps we’re doing that already: I hope so.)
“This alternative perspective of how the nation’s households are prospering – or are not – looks at the National Income, not at the Product, the GDP” ???
So how is National Income different from GDP?
National Income is = C + G + I + X + F – D
Where C=total consumption, G = Govt spending, I= Private Investment, X = Net Exports,
F = National Resident’s Foreign Production, D = Non-National Resident’s Domestic Production
The first three terms constitute GDP
So we have National Income = GDP +F – D
So, even if NI isn’t quite the same as GDP it’s not going to be that much different in practice. The difference between F and D is going to be relatively small.
Or do you mean something else?
https://www.wallstreetmojo.com/national-income-formula/
The level of UBI. Clearly this will need to be set initially at the threshold for paying the basic rate of tax, i.e. at £12,570 – or rather at whatever the threshold is at the time that UBI is introduced. One of the few concrete achievements of the 2010-2015 Coalition was to create the threshold below which all income is untaxed, an achievement which LibDems should be trumpeting out loud – for it has proved so sensible and popular that even the Conservatives (and other Parties like Labour) have not only retained it, but have felt compelled to kept raising it in line with inflation. While we’re about it, the UK state pension should also be brought in line with this level of income, which would be an administrative saving.
I do mean something! I believe I have already drafted, checked, and sent a reply to this question. So I wonder where that is now.
Briefly, I tried to explain that though the figures are as Peter describes, they are very different when you look beyond the numbers and consider what they represent in, shall we say, real live human content. The one tots up the material money: the other shows what it means in People terms: how many are rich, and how many are poor. It talks of “households” , in five “quintiles” : the Poor, the Hard-Up, the Getting By, the Doing Nicely and the Very Rich. [my coinings? And I think they show well how our national wealth is shared out. And pose the question, what do Lib Dems think of the way things are, now they can see it displayed?
Roger Lake,
It’s a valid point to make that our total National Income or our Gross Domestic Product needs to be more equitably distributed but it really doesn’t matter whether we consider this to be in terms of income or production, which are almost equal, and are only slightly different because of the way we’ve chosen to define the two terms.
In a closed economy, such as the global economy itself, the two are exactly equal. We don’t have any, or at least none that we know about, extra terrestrial residents nor any extra terrestrial production!
Currently working people do not pay income tax or national insurance on the first £12,570 that they earn. If these were abolished a person would need a UBI of £4022.40 a year to be no worse off (or £77.35 a week). This was the figure that the party was talking about when it put UBI to Conference earlier this year. It was stated that the government would need to raise further £30 billion of income to finance the UBI at this level.
If Roger Lake is proposing taking a further £20,000 off the top fifth of people in society this would fund a UBI of about £7,150 a year assuming working people pay income tax and national insurance on every pound they earn. For each extra £1000 taken from this top fifth the UBI can be increased by £157.50 a year.
It’s been said about UBI that to be at a level that you could afford to live on it would be unaffordable, and to be affordable, you could not afford to live on it. So to get back to the underlying problem we are trying to fix – too many people, both in and out of work, on incomes that they cannot afford to live on. The answer to the former is to pay people properly where we have had flat or barely rising real incomes for far too long (whilst incomes at the top soar). The answer to the latter is a benefits system that is set at realistic levels – a major shake up of Universal Credit.
These are a lot more achievable and affordable than UBI. It is also a perhaps unpalatable fact that many of the population do see UBI as ‘something for nothing’, even more so than benefits. Politically it won’t fly.
@ Robin Stafford,
“… many of the population do see UBI as ‘something for nothing’, even more so than benefits. Politically it won’t fly.”
Exactly right. Even supporting a more generous benefits system isn’t going to politically popular.
I don’t know if those who support the idea of a UBI have ever sounded out popular opinion on its merits. I would suggest they give it a try. No policy will be of any use if the electorate won’t vote for it.
This is not to say that popular opinion wants everything left to market forces with wages forced down to their absolute minimum. If anyone is putting in a shift and doing their best, the consensus of opinion will be that they shouldn’t be well above the poverty line, and that they deserve a fair share of what is produced nationally. I don’t believe there is a huge difference, although there will be some, in attitudes between Labour, Lib Dem and Tory voters.
Building on this consensus by ensuring that there is a decent well paid job for anyone who is prepared to work is the only viable way to tackle the poverty issue. We shouldn’t be quite so quick to write off anyone with a disability. Many people with Down’s syndrome, for example, wish to work and are quite capable of doing so.
https://www.bbc.co.uk/news/blogs-ouch-32613957
This is — or ought to be!– amazing! And alarming. So far there are 12 reasoned responses to my title, most of them finding fault with my recommended proposals for solving the UBI riddle. As they stand, most of them have their points, no doubt. But not one of them attempts to tackle the puzzle I posed. The term “UBI” appears 14 times. The term “PR” does not appear at all !
Why is that? I posed a three-dimensional puzzle; and sage and erudite experts offer solutions in 2 ! Remember the advice for O-Levels, do we? “DO READ THE QUESTION!”
PR is coming. ” When, then? ” comes the question. It leapt forward, of course, with PM Boris’s help, and I believe the answer is “SOON!”. I gave a clue or pointer at the outset, when I mentioned “the prejudice of ignorance” and ” the handicap of expertise”. Those were hints well known to every fifth-former about to sit an O-Level: “READ THE QUESTION !”
So please, dear LDs, just ignore my nearly senile cheek, and go straight back to my Title!
Perhaps first read the Guardian’s somewhat dishonest review of the Paper produced for the Labour Party by Professor Guy Standing, on 6th of May, 2019. Two well-known Party Leaders oppose PR : Conservative and Labour.
Good morning. It occurs to me that I ought to try to say more about PR. I think we`’ve alll been startled by the pickle the Dutch have sudddenly found themselves in. We must learn that lesson and avoid it. I am no student of the matter, and urge all LDs to start thnking hard, now, about HOW it is to be done once the scale tips and we dump FPTP.
“How?” is indeed the Big Question, when we find that the two currently biggest Parties don’t want Democracy in the United Kingdom, for the very good reason that they now legally but illegitimately prefer our Buggins’s Turn .
And in this weird humbug even the LDs are not blameless. Why is it that the Greens are not now represented in the House of Commons, despite promoting Ideas which are real and urgent? Is it not partly because WE Lib Dems are standing in their way, as the least implausible alternative to the pair of Big Boy Spoil-Sports . . . . ?
Try this: We offer a Deal to the Greens: we will put up no candidate in one third of our putative constituencies, and will encourage our supporters there to vote Green, if they will reciprocate by urging their supporters to vote Lib Dem. Will not both of our parties in this way get more VOTES than seems likely at present, and perhaps more SEATS? We might even suggest half-and-half? We have all, I hope, now seen the brief letter just over a week ago, in the “i” newsaper?
Gotta go now — back later.
In 2010 we conceeded our support base in the university based seats to the Greens. They have yet to take any new ones as a result and will probably loose their only existing one to Labour. At some point we have to take that back and that means fighting them to regain second place before going on to win them. Policy-wise a good place to start would be UBI. Students would be one of the biggest groups of winners (mature students would do particularly well).
Though I support both policies they are in different policy areas. If Labour win I think they will do as much as they can to reverse the calimitous reductions in our safety net. Where we can offer something different is to establish PR as the single most effective way to improve our country with positive results in most other policy areas including funding public services.
@RogerLake. The reason why we don’t stand down for the Greens is that they are not Liberals. Yes, we share some policies with them, but on a whole raft more they are nowhere near us at all. Anyway, your point is mute because with a few notable local council exceptions the Greens would never stand back or urge their supporters to back us. On a separate point, standing down assumes that we (or they) can get their supporters to vote Lib Dem or Green and the evidence on that is dubious. Furthermore, your proposal is an insult to the electorate who have shown that they can switch their votes and vote tactically if they see a point to it. Standing down denies the opportunity to those who support us to cast a vote for the Lib Dems if they wish. Again there is little real evidence that if we don’t stand that our supporter turn out at all of for another party.
We are the party who values liberty and denying choice to people is an infringement of that liberty.
So, sorry mate, your point is a non starter.
Dear Mr Taylor, thank you [ 4 Dec, 10.40 pm].
I find it difficult to organise a reply, because you seem to assume that all LDs are part of a single ‘us’. Have you read the very short letter in the “i” newspaper on Saturday 25th or 18th Nov?, outlining an analysis of our LibDem party currently? Please do read it — I believe you may enjoy it. Rather ruefully, though.
And I now feel we have spent too much time on UBI, and must move on to the (almost) unmentioned “P.R.” of Proportional Representation.
I believe every Lib Dem understands what PR means, as a word. And also as one of those
political adjustments that is truly revolutionary. I shall try to sketch out one or two scenarios depicting a world UTTERLY DIFFERENT from our own (in the last few centuries).
School ‘O-Level’ Physics. Was it Newton — him of the falling Apple ? He said, and no-one can now disagree, that if you mix together the beautiful colours of Seven beautiful lamps — ROYGBIV he called them, I think — you can get the glorious White of, say, Snow; or the very best of Clouds, or . . . .
Jump to the mixture of political colours today in the United Kingdom: the true-blue Tories, the Red Flag Labourites. the Greens, the . . . you get my drift.
Less than half of us in the British Isles desire an eternity of burnt-out bulbs, taking it in turns to shine the sickly signal of distress, Red-Blue-Red-Blue till kingdom come. So why does it go like that?
It need not. The Lib Dems, and the greater part of their compatriots, desire a better world, in which all spectrum’s hues play their equal part. Not permanently; not even steadily, but with every neck-tie contributing to a continuously evolving consensus .
And now, thanks to the horrors that permitted and then overthrew the last ten or thirty years, we must be on the brink of major remedial change: OUT with FPTP, and in, at last, with PROPORTIONAL REPRESENTATION. But PR must be careful– consider the Dutch this year.
And there will be transitional pain. Some parties will fade as others prosper. It is up to all,
including us, the Liberal Democrats. My guess is something like ten parties in the new Commons: perhaps two Blue, two Red, Two Orange, one big Green — tackling both climate and food? — and some Celts. And ALL very welcome and vital.
And to quote a well loved broadcaster a year or two ago : ” . . . if you have been: Thanks for listening”.
Mr Lake. Whether PR or UBI or both are coming or not remains to be seen. The major problem that I see and which neither you not any of the commenters properly address is that neither PR or UBI exist as such. There are infinite varieties of PR. List systems, STV, MMP etc. All of the above with or without threshholds and a variety of other bells and whistles. I don’t know enough about UBI to be sure but I suspect the same to be true of that. Therefore you cannot propose just either PR or UBI. You have to propose a particular version of each and then persuade the public to accept it. To anticipate one objection to the above you could persuade the government to implement a “citizens assembly” to come up with a proposal on either PR or UBI. But you would still have to get it through Parliament.
Which brings me on to another problem. I detect no great enthusiasm for either PR or UBI amongst my friends and acquaintances. At least neither ever seems to come up in conversations I have; unless I bring it up myself.
Indeed I myself have reservations about both. On UBI I find myself more in agreement with Peter Martin than you. On PR I think that list based systems are worse than FPTP and would therefore vote against any proposal to implement such a list system.
To Andrew Tompion @7.38 on 6th Dec.
Dear Mr Tompion, many thanks for yours. You have reminded me, with your breadth of scope, that I must cover my complaint that no-one has really covered UBI’s “other half”, the collaborative PR: PROPORTIONAL REPRESENTATION.
I’ll focus on the core of your piece, confessing that you know much more than I do, about PR. My title, you will recall, asserts that “UBI and PR will work together.” : and that PR barely got a mention in LDV responses.
I’ve said enough about UBI (almost). Every adult will get it — and then pay Income Tax on it, simply as part of his or her Taxable Income.
Now the hinge or the pivot. That can only be set up if we can overcome the allied refusal of the two biggest Parties, Red and Blue, sworn enemies disgracefully allied in opposing Democracy in general, as well as in our subject here and now. It is not simply an unholy alliance . . . well, yes it is. Tories and Labourites are determined to rule the roost for ever, taking turns.
So, as you well state, Andrew, “Therefore you cannot propose just either PR or UBI. You have to propose a particular version of each; and then persuade the public to accept it . . . but you would still have to get it through Parliament.”
Exactly. So, having (let’s say) got the UBI — all to get it, remember! –“[we] would still have to get it through Parliament.”
And that, I believe, means replacing FPTP by something more suitable: a well chosen PR, adapting or adopting the best of the systems now in use virtually everywhere in Europe and further afield. Get the PR, and UBI can be installed.
I believe that you, Andrew, know more about PR than I do, so I hope you will continue to advise us on how to avoid errors like the Dutch one!
PS: Let us change UBI’s name, and call it what it will be: the NATIONAL INCOME DIVIDEND, to be decided on annually in the House of Commons by the House, and not by some ‘Chancellor’ establishing a Reputation!
There is only one form of PR that been this party’s policy for as long as any of us can remember and that is STV. It doesn’t have thresholds but parties do need a significant level of support (of the order of thirty thousand votes) in at least one large constituency.
There are many versions of UBI advanced as end goals by party members but we were almost all happy to support, as a first step, the proposal to convert income tax and national insurance allowances into a UBI while keeping the existing universal credit system as a top-up.
On the name of UBI, National Income Dividend is the most philosophically satisfying as it provides a moral justification to counter the Moral Hazard argument. However, I think the one that would play best with the electorate is Negative Income Tax. The idea that the poor should be able to claim back the value of their personal allowances if they don’t earn enough to use them sounds more reasonable to more people than giving everyone free money and taking it back in tax.
I should like to reply to Peter Davies, but am in trouble. I hope to get out of it, but believe I am compelled to use an old computer, the new one off its rocker. And I regret that I must now pause all, for family and Christmas.
But we must keep moving, recalling our purpose of combining NID (aka UBI) and PR. The latter bodes ill for us. And of course almost everyone interested in Elections is staring at ‘pretty soon!’ . May I suggest that we do what must be done, for the imminent contest, but apply our thoughts to Proportional Representation, trying not to judge Labour and its Leader too harshly. Tricky, that.
We’ll do what we can, very soon or not long after — and might even come third?! But I believe all our political thinking from now on should concentrate on PR, in all its aspects.
I know disgracefully little about it, beyond knowing that it will free us from the Tories, and the bungling Labour party. They will get their say, of course — but it will not count for much, judging from where we all are now.
Please all consider, over the next six weeks or so, what PR will bring us. My simple-minded world is made up of about ten parties: 2 Right, 2 Middle, 2 Left. 1 big Green, and three others. Shoot that down with some post-festive common sense and knowledge and imagination.
Mrs Lake calls, and I must go! A very Happy Christmas and a Busy New year, to all LDs!
Good Morning on 1/1/2024 — and A Happy New Year to everyone, especially Lib Dems.
I dare say there are other readers of LDV who follow this excellent forum, some with genuine supporting interest — and some, perhaps, with mischievous intent.
My intention, now, is two-fold: first, to get the wheels turning again, with everyone pedalling towards the goal of securing Proportional Representation in our national Parliament:
and second to encourage discussion of how it could and shall work to the nations’ [ three or four of them!] advantage. Remember the title of this month old thread? We all, I hope find the prospect” interesting” at least. UBI and PR will work together.
This does not mean that a NATIONAL INCOME DIVIDEND and
SORRY: INTERRUPTION BACK SOON