by Citizens' Income Trust | Feb 17, 2014 | Opinion
It must be exceedingly frustrating for ministers and civil servants that every attempt that the Government makes to simplify the UK’s benefits system results in increasing complexity. Take the example of Universal Credit: One of its aims is to ensure that payments will be permanently accurate because based on real-time information about wages being passed seamlessly from employers to Her Majesty’s Revenue and Customs and then on to the Department for Work and Pensions, thus alleviating claimants of the need to declare changes in earnings. Some unfortunate facts are getting in the way of this plan: that individuals have short-lived and/or multiple employments; that households are far from simple or stable (this is important because the household is the claimant unit for Universal Credit, but the individual is paid wages and pays Income Tax); that computers cannot cope with complexity; and that the relationship between Universal Credit and other benefits is rather complicated, particularly in relation to the new localised Council Tax Support Scheme. A public domain National Audit Office report catalogues a long list of problems:
The Department does not yet know to what extent its new IT systems will support national roll-out. … It is unlikely that Universal Credit will be as simple or cheap to administer as originally intended. Delays to roll-out will reduce the expected benefits of reform … Throughout the programme the Department has lacked a detailed view of how Universal Credit is meant to work. The Department was warned repeatedly about the lack of a detailed ‘blueprint’, ‘architecture’ or ‘target operating model’ for Universal Credit. Over the course of 2011 and the first half of 2012, the Department made some progress but did not address these concerns as expected. By mid-2012, this meant that the Department could not agree what security it needed to protect claimant transactions and was unclear about how Universal Credit would integrate with other programmes. These concerns culminated, in October 2012, in the Cabinet Office rejecting the Department’s proposed IT hardware and networks. 1
A leaked DWP document reported in The Guardian shows that there might be options for rescuing Universal Credit, but that only
25,000 people – just 0.2% of all benefit recipients – will be transferred on to the programme by the next general election, whichever route is taken. … Duncan Smith has repeatedly maintained that [U]niversal [C]redit will be delivered on time and on budget but, according to sources close to the project, senior civil servants have raised concerns in the past few weeks that the 2017 deadline for getting millions of people on to the programme is now unrealistic because IT systems are not working as expected and design flaws are too numerous. 2
An unintended consequence of attempting to simplify means-tested benefits would appear to be an increase complexity.
As research by the Institute for Public Policy Research for the Joseph Rowntree Foundation has found, a particularly important unintended consequence of Universal Credit is that
an enormous number of workless partners (the DWP estimates around 900,000) will find they lose money if they move into work, because of the speed at which the benefits they are claiming under Universal Credit will be withdrawn. 3
The IPPR suggests that
the government should introduce a second earner disregard alongside Universal Credit, which would allow workless partners to keep some of their extra income from work, up to a specified amount. 3
But surely this would add yet another complexity to an already complex system. Means-tested benefits are inherently complicated, and to add new disregards can only make the situation worse, unless of course earnings disregards are 100%: that is, however much an individual or a household earns benefits will not be withdrawn. To apply such a provision only to current means-tested benefit claimants would of course be exceedingly unjust, because they would continue to receive their benefits at the same time as their taxed earnings, and those who had not been receiving benefits would receive only their taxed earnings. The only fair solution to the dilemma would be a nonwithdrawable payment to every individual: a Citizen’s Income. Provided a genuine Citizen’s Income were to be paid, complexity would be impossible, and ministers and civil servants would find their lives to be a great deal easier.
Thirty years ago
In 1984 the Basic Income Research Group, which later became the Citizen’s Income Trust, issued its first publication:
Scrap the earnings rules!
People who claim Supplementary Benefit can only earn up to £4 each week before they lose their benefit pound for pound. Claimants of unemployment benefit can earn up to £2 per day before their benefit starts to be withdrawn. Earnings rules are a disincentive to unemployed people edging their way back into employment. It often is not worth their while to take up part-time jobs in the few areas where they are available. A major advantage of a Basic Income [Citizen’s Income] scheme is that it would abolish all earnings rules. However much you earn, you keep your Basic Income. 4
Readers will notice the similarity.
Will we still be writing the same thirty years from now?
1 www.nao.org.uk/report/universal-credit-early-progress/ pp 7-8
2 ‘Work and pensions secretary Iain Duncan Smith is understood to prefer the plan to improve the existing universal credit system’, The Guardian, Thursday 31st October 2013
3 www.ippr.org/articles/56/11507/to-tackle-in-work-poverty-start-with-second-earners
4 Basic Income Research Group News Sheet, Autumn 1984
by Citizens' Income Trust | Jan 3, 2014 | Opinion
Malcolm Torry, Money for Everyone: Why we need a Citizen’s Income, Policy Press, 2013, xiv + 300 pp, 1 44731 125 6, pbk, £24.99, 1 44731 124 9, hbk, £70
From the book:
The structure of the book
Following some notes on terminology and on graphical representation, chapter 1 sets the scene by asking the reader to imagine themselves trying to solve the financial crisis, to imagine some representative people trying to cope with our tax and benefits system, and to imagine themselves creating a tax and benefits system in a country without one. The second chapter offers a historical sketch, because it is helpful to know where we have been before we set off into the future; and chapter 3 discusses existing schemes similar to a Citizen’s Income and also some Citizen’s Income pilot projects. Chapter 4 discusses the changing labour market and the changing family in order to locate our discussion of benefits reform in its context, and asks whether people would be more or less likely to seek paid employment if they were in receipt of a Citizen’s Income; and chapter 5 establishes a set of criteria for a successful benefits system and judges both the current system and a Citizen’s Income against those criteria. Chapter 6 discusses poverty and inequality and asks whether a Citizen’s Income would tackle them; chapter 7 explores the notion of citizenship in order to decide who should receive a Citizen’s Income; chapter 8 asks whether it would be ethical to pay a Citizen’s Income; and chapter 9 explores a variety of political ideologies’ possible responses to a Citizen’s Income in order to discuss whether a Citizen’s Income is ever likely to happen. Chapter 10 asks whether we can afford a Citizen’s Income and discusses funding mechanisms; chapter 11 discusses a variety of other reform options, and some issues not tackled in the rest of the book; and a brief chapter 12 offers a summary argument for a Citizen’s Income. (p.viii)
A review by Professor Bill Jordan
This is a very important contribution to current debates about tax-benefits systems. In his carefully-argued and comprehensive examination of the case for and against Citizen’s Income, Malcolm Torry presents an updated and extended review of the state of play in the UK and worldwide. Even as some developing countries are experimenting with versions of the idea, ours seems as far from doing so as ever, despite its obvious advantages.
We are living through the most recent of a series of missed opportunities for the principle of state payments to all citizens to be accepted. Whereas the others (such as the introduction of contributory National Insurance benefits and National Assistance after the Second World War, and of Family Income Supplements for low earners in 1973) were innovations in income maintenance systems, the present one combines financial and fiscal crisis with the consolidation of means-testing and coercion through ‘Universal Credits’. As Torry points out at the start of the book, ‘money for everyone’ could have been an alternative approach to both the bail-out of the banks and the Duncan Smith reforms
The early chapters of the book set out the processes through which our present mix of universal, contributory and selective benefits was established, how universality as a principle was accepted in the case of Child Benefits, and how a CI scheme might be implemented (for specific groups first, or at a low initial level). There follow four chapters on criteria for a benefits system, demonstrating that CI scores well for coherence and simplicity, adaptability to changing family patterns, supplying incentives, efficiency and dignity, and appropriateness for a flexible labour market.
He analyses with care the issues of work motivation and the responsibilities of citizens raised by the proposal, acknowledging that prejudice and timidity have influenced political responses to the idea, even in the face of strong evidence. For instance, despite the finding from a CI experiment in a district of Namibia that people engaged more in work and education, the government still expressed fears that a wider introduction of the scheme would make people lazy. Yet even in the face of these barriers, CI has continued to gain wider attention.
Above all, these chapters show how what was originally seen as an outrageous idea, espoused by a handful of outsiders, has gradually come to be accepted by a wide range of philosophers, sociologists, political theorists and members of the social policy community. With impressive scholarship, Torry assembles the arguments and research findings by which scoffers and nay-sayers have been converted (or have converted themselves) over the past 40 years.
Finally, he demonstrates that all the major political traditions support goals that would be served by CI – individual enterprise for the New Right, equality and solidarity for Socialists, inclusion for One Nation Conservatives, personal freedom for Liberals, efficiency with justice for Social Democrats, and modernisation for advocates of the Third Way. It could also be introduced in affordable ways. So why is it still marginal to politics in the UK, USA and almost all of Europe?
Although Torry does not say so, the answer seems to be that – with capital in the ascendant over organised labour, and globalisation extending its strategic options – it is the disciplinary role of the state that all political regimes seek to uphold. Instead of improving incentives for work, enterprise and savings, they scrutinise and sanction those with low earning power; instead of enabling family formation, they police parenting; and instead of promoting equality, they divide and rule.
Malcolm Torry’s book shows that the introduction of a CI could be rational, ethical and efficient, if combined with other measures to promote sustainability and the common good. It could also be afforded under several different taxation regimes. Unfortunately, none of this makes it likely to happen, so long as power over societies is exercised for the benefit of the few.
Professor Bill Jordan, Plymouth University
by Citizens' Income Trust | Dec 27, 2013 | Opinion
Danny Dorling, The No-Nonsense Guide to Equality, New Internationalist, 2012, 176 pp, pbk, 1 78026 071 6, £7.99
Dorling’s egalitarian tract is, as Richard Wilkinson suggests in his foreword, ‘multi-faceted and rich in insights’ (p.7). Throughout the book, countries in which inequality is greatest are compared with those exhibiting greater equality ( – Dorling is, after all, a geographer), and by the end of the book the deluge of facts and graphs has delivered the same message as Wilkinson’s and Pickett’s The Spirit Level: that inequality is bad for us, and as bad for the rich as for the poor. But there are some major differences between The Spirit Level and this book. Wilkinson and Pickett attempt to show by statistical methods that income inequality causes other kinds of inequality, and their passion lies under the surface of cool statistical description. There is little attempt at prescription. Dorling’s book, on the other hand, is a passionate denunciation of inequality in all of its forms, a somewhat utopian desire for greater equality, and a clear prescription of what is required.
It is of the nature of such committed essays that argument is cumulative rather than linear, and that is the case here. We are treated to a ‘multi-faceted’ approach, and what we might call a holdall of a book. We are told that we are going to experience a positive exposition of equality rather than a polemic against inequality, but in fact we are treated to frequent oscillation between the disbenefits of inequality and the benefits of equality. On a single page (for instance, p.53) we find wide sweeps of history, the evolution of public schools, and how religions evolve, and such diversity of material is far from unusual. This all makes for an unnerving ride, but it isn’t without its excitement. The book is divided into chapters: ‘Why equality matters’, ‘What is equality?’ ‘Winning greater equality – and losing it’, ‘When we are more equal’, ‘Where equality can be found’, and ‘How we win greater equality’. But each chapter is in fact a somewhat random selection of inequalities and what’s wrong with them, and of more equal countries and what’s right with them – including the final chapter, which contains a clear prescription preceded and followed by yet more material on inequalities and the need for equality.
None of this is a criticism. The book is a compelling read, and you finish it utterly convinced of the damage done by inequality, and of the necessity for greater equality – for equality defined broadly as ‘being afforded the same rights, dignity and freedoms as other people’ (p.41).
The prescription? The book contains numerous carefully researched and argued denunciations of the damage done by educational segregation ( – including a devastatingly cool description of how wealthier and more privately educated Bristol gets a lower proportion of its children into higher education than does poorer and less privately educated Sheffield), so we expect the final chapter to suggest that the abolition of private education, or at least the removal of its charitable status, would contribute to greater equality in the UK. But we don’t. Instead we find several pages of advocacy for a Citizen’s Income. (Dorling is right to suggest that children in the UK receive such a universal benefit, but mistaken to suggest that elderly people receive one – they don’t: they receive National Insurance and means-tested benefits, though they will receive something closer to a Citizen’s Pension if the recent Department for Work and Pensions consultation gives rise to legislation for a single tier state pension.) Dorling has previously been somewhat less convinced about the usefulness of a Citizen’s Income, but his passionate exploration of inequality, his longing for greater equality, and his reading of Callinicos, have persuaded him of both the desirability and the feasibility of an unconditional, nonwithdrawable income for every individual as a right of citizenship – though he remains well aware of the political obstacles in the path of its implementation.
I’ve called The No-Nonsense Guide to Equality a book. Yes, in some ways it is a book, but it might be better to call it sustained, well-argued and passionate journalism. Whether or not you find yourself sympathetic to the political stance represented by The New Internationalist, the publisher, if you are concerned about growing inequality and would like to see greater equality then you will enjoy this book and will find it an inspiration.
The publisher is to be commended on the price.
by Citizens' Income Trust | Dec 20, 2013 | Opinion
Alberto Minujin and Shailen Nandy (eds), Global Child Poverty and Well-Being: Measurement, concepts, policy and action, Policy Press, 2012, xxxii + 591 pp, pbk, 1 847 42481 5, £28.99, hbk, 1 847 42482 2, £70
In 2006, the United Nations General Assembly adopted the first internationally agreed definition of child poverty:
Children living in poverty are deprived of nutrition, water and sanitation facilities, access to basic health-care services, shelter, education, participation and protection, and … while a severe lack of goods and services hurts every human being, it is most threatening and harmful to children, leaving them unable to enjoy their rights, to reach their full potential and to participate as full members of society (quoted on p.3)
In 2007, UNICEF stated that
measuring child poverty can no longer be lumped together with general poverty assessments which often focus solely on income levels, but must take into consideration access to basic social services, especially nutrition, water, sanitation, shelter, education and information (also quoted on p.3)
In 2008, a conference, ‘Rethinking poverty: making policies work for children’, gave birth to a revived academic interest in the measurement and causes of child poverty. In 2009, Peter Townsend died. His early work on child poverty and his constant commitment to poverty’s measurement and abolition have been an inspiration to academics, policy-makers and practitioners, and to the authors of the papers published in this tribute volume.
The first part of the book finds that children’s human rights are frequently violated, and that economic growth is far from being a sufficient condition for the elimination of child poverty. The second part discusses a variety of methods for measuring child poverty, and finds that the multidimensional nature of poverty means that cash-defined poverty lines are inadequate on their own. The third part relates case studies on the development of multidimensional poverty indices; and the fourth part studies the causes of child poverty and a number of methods for eradicating it. Of particular interest to readers of this Newsletter will be chapter 18, ‘Utopia calling: eradicating child poverty in the United Kingdom and beyond’. Ruth Levitas tells the story of the UK’s Family Allowance, which evolved into Child Benefit, and shows how other rather different policies intended to reduce child poverty reduce the level of absolute poverty but do little or nothing to reduce relative poverty. She laments the proposal to means-test Child Benefit, shows how social polarisation is at the root of child poverty, and suggests that to increase the level of Child Benefit and establish a Citizen’s Income would provide a good basis on which to tackle the many aspects of child poverty. The fourth part of the book shows that economic growth is not a sufficient condition for abolishing child poverty, that tackling one deprivation at a time (for instance, sanitation) can make a real difference to levels of child poverty, and that a global study in fifty countries effectively combines quantitative and qualitative methods to provide a deep description of child poverty. The final chapter, by Peter Townsend, calls for an international financial transactions tax to pay for a global Child Benefit. This is classic Townsend: well researched, big ideas, and quietly passionate.
I have only one quibble: that an editor might have removed duplication, such as the similar discussions of the flawed ‘under $1 a day’ poverty definition in adjacent chapters: but such duplication is hardly unusual in a volume which started life as conference papers.
This is a brilliant book, and a most fitting tribute to Peter Townsend’s lifelong campaign to measure and eradicate child poverty. Now that we have some more adequate methods of measuring global child poverty, all we need to do is abolish child poverty, and then measure it again to see if we’ve succeeded.
by Citizens' Income Trust | Dec 13, 2013 | Opinion
Gaby Ramia, Kevin Farnsworth and Zöe Irving (eds), Social Policy Review 25: Analysis and debate in social policy, 2013, Policy Press, 2013, xii + 324 pp, hbk, 1 44731 274 1, £70
As Gaby Ramia’s introduction to this twenty-fifth annual collection suggests, the choice of papers is evidence of an increasing internationalisation of the Social Policy Association (SPA). The contributions are from Germany, Denmark, the USA, South Korea, Australia, Israel, and the UK. The first part of the volume tackles some particular policy issues faced by the UK’s coalition government, chapters in the second part are papers delivered at the 2012 SPA conference, and the third part is on the theme ‘work, employment and insecurity’.
All of the chapters address important questions: Is it possible to reconcile policy designed to address fuel poverty with policy designed to address climate change? Does marketisation make the NHS less of a universal public service? Will marketisation of pensions, social care and housing for elderly people breed greater inequality? Does the ‘social cohesion’ agenda mean that we no longer notice racial disadvantage? Can social policy initiatives generate corporate interconnectedness and therefore corporate power? What kind of welfare states are Israel, China, Japan and South Korea developing? Does unemployment have personal or structural roots? Do current EU regulations sufficiently address the two-tier labour market? How do labour market activation policies affect social citizenship? Is subsidised childcare a route out of the unemployment and fertility traps? Can female employment make up for public spending cuts that hit low income families the hardest?
Two chapters will of particular interest to readers of this Newsletter. Jeroslow asks whether the US’s Earned Income Tax Credit is palliative or cure, and concludes that quality childcare, improved education and training, improved community services, and more family friendly employment practices are required if the next generation is to escape poverty and the US is not to become an even more unequal society. Equality of opportunity requires a bit more equality of outcomes if it is to work.
Even more relevant is Paul Spicker’s evaluation of Universal Credit. Because it is means-tested, and its administration is complex, it will go the way of all other means-tested benefits. It will adapt to the conditions in which it is applied and will become more complex; old rules will be recycled into the new benefit; and for those sections of the population for whom the benefit works least well the system will be separately managed, thus recreating yet another mosaic of benefits.
Even if Universal Credit fails spectacularly, it will lumber on. (p.19)
Sadly, Spicker does not suggest a solution. He could have done.
