by Ian Orton | Apr 7, 2014 | Opinion
The increasing use of conditional cash transfers (CCTs) has perhaps been one of the most significant additions to the social development agenda of late. CCTs are now key components of many governments’ poverty elimination programmes and feature centrally in the UN’s current Social Protection Floor initiative.1 The mainstream media has also taken note and lent support in favour of their adoption.2
CCTs have delivered some impressive results in terms of reducing poverty and inequality, and are credited with numerous other positive human development outcomes. However, opinions on the status of CCT conditionalities in terms of human rights remain mixed. Some argue that CCTs are contradictory in nature (imposing obligations on rights) and therefore obstructive to the human rights agenda, while others stress the importance of obligations complementing those rights. The paradox is that CCTs may be positive along one dimension (reducing poverty) but not others (compromising human rights).
Moreover, there is no conclusive evidence to show that the conditional mechanism has anything to do with the aforementioned positive effects of CCTs; rather, conditionality is much more to do with politics and improving their acceptability. Perhaps conditionality is just a convenient mechanism by which to placate the paternalist twitch3 (that is to say, they provide sufficient behavioural controls to quench the demands of those social classes that finance social transfers)? In this sense, conditionality ensures continued political support and represents a ‘necessary evil’ to realize human rights through a non-prefigurative approach (that is, one in which the means are not consonant with the ends). One wonders if the conditional question ultimately boils down to a question of faith in human nature (or a lack of it), and whether the poor need to be “nudged” in the “right” direction or given the resourced freedom to develop in ways that they individually deem fit. If true, this poses the question: why not dispense with the conditional dimension rather than risk rights violation? A question I will return to later.
The first position, that CCTs violate human rights is straightforward: human rights are unconditional, universal and indissoluble in character, their fulfilment cannot be based on supposed “deservingness”. In this sense, CCTs are clearly detrimental to securing human rights… End of story! And since income security is the main delivery mechanism employed in advanced societies for realizing the human right to social security it is therefore unacceptable to deny a person (parent or child) that fundamental right; a right that might be violated through the imposition and enforcement of conditionalities. Concerns are further compounded by the fact that the fulfilment of the conditions may not entirely depend on the beneficiaries, but also on the availability and quality of the basic social services. How can individuals fulfil conditions if the requisite services do not exist, are inadequate or their distant location makes the opportunity cost of access prohibitive? Remote, difficult-to-reach or deprived areas where vulnerability is high, are typically characterised by the absence of such services. In such places, the high opportunity costs of meeting conditions of CCTs may penalize the most vulnerable who are least able to meet conditions. Responsibility for protection is therefore shifted from the state on to the individual.
Using conditionalities to promote human rights?
While seemingly counter-intuitive to the preceding argument, conditionalities can also be advocated from a rights-based perspective. They have been invoked as a way to promote a combination of rights and as a means to facilitate their materialization. This represents an important shift, as, although universal in principle, in practice rights have remained unfulfilled for many if not most of the poor (as per the looming post-MDG deficit). In other words, CCTs may represent a concrete way to bridge the gap between the legal basis of rights and their practical fulfilment. It is argued that this can be achieved because it is recognized that the situational knowledge of beneficiaries, and their behaviour, are key factors for the materialization of rights. In addition, CCTs can also positively influence the behaviour of non-beneficiaries who may wish to gain access to participation. More broadly, it is argued that conditionalities bind not only the beneficiaries, but also the public authorities to create the necessary conditions (for example, basic services availability) for their fulfilment. This is why CCTs are now presented as a vehicle for co-responsibility.
Continuing in this vein, rather than impede human rights, CCTs may have an important recursive function that permits further enhancement of service delivery and therefore maximizes opportunities for rights realization: lack of compliance with conditions does not have to trigger a punitive approach leading to the exclusion of the beneficiary. Instead, non-fulfilment can also be understood as having a revealing function, highlighting the vulnerability of individuals. This sheds light on the balance—or the lack of it—between the solutions provided and the needs of the beneficiary. Thus, non-fulfilment could kicks-start a positive feedback loop signalling to the authorities that perhaps the delivery of essential health and education services is lacking, or that there is a need for other services (for example, counselling, job training). Consequently, further inquiry leads to progressively improved solutions.
Far from undermining rights fulfilment, the existence of conditionalities might strengthen the bargaining power of some household members thereby facilitating the fulfilment of their rights and promoting their status within the household. This aspect can be particularly important for women and children. However, this point also illuminates the inherent gender bias of CCTs whereby fulfilment of conditions is a responsibility often bestowed on women, and therefore gender inequality is reproduced by anchoring women in existing roles, for example reinforcing the idea that caring is a maternal duty and simultaneously infantilizing men as potential carers.
But is conditionality morally acceptable or even effective?
For others, conditionality represents a form of paternalistic social engineering writ large4 where the design of CCTs is at best guided by a benevolent paternalism (saving us from ourselves), and at worst, by a mean-spirited cynicism, showing little faith in the poor to know what is best for themselves and their families, and reinforcing the belief that recipients are somehow social misfits wholly responsible for their condition. In this cynical sense, conditionality offers social policy makers a means to limit the adverse effects of decision making that may be inconsistent with human development goals or, arguably, with the best interests of household members. For instance, CCTs obligate the ‘poor’ to prove that they are not ‘lazy’. The morality of this approach is dubious and resonates frighteningly with Bentham’s project of creating an ‘architecture of choice’, and with ‘nudge-esque’ social policy.It also fulfils Foucault’s prediction that society will tend increasingly toward the panopticization of human behaviour. As a result, conditionality not only poses a threat to human rights; it chips away at freedom and personal responsibility, depriving humans of agency and the opportunity to consider and select forms of life which are both satisfying and rational.
As intimated early, much of the discussion thus far is underpinned by the presupposition that the conditional mechanism is pivotal in producing positive social outcomes. However, the efficiency of conditions has rarely been studied separately from the programmes that include them; therefore some argue that there is almost no evidence that conditions make any major difference.5 More study is clearly needed to disaggregate the effects of the conditional mechanism and the actual cash payment. Perhaps there is a need to recognize that the presumed effectiveness of conditions has attained something of the doxa status, or a kind of Emperor’s Clothes: an idea we think with and through, but not about. We should be cautious of such seemingly self-evident truths, whose employment really is more a matter of faith than anything based on scientific rigour. CCTs continue to be an increasingly popular means for reducing poverty. However, that CCTs should remain conditional is clearly not universally agreed. If the conditional mechanism is not the pivotal factor, then why not dispense with it and behavioural conditionalities? Perhaps a movement toward unconditionality could offer a way forward. While unconditional cash transfers (UCTs) are not automatic fulfillers of human rights, arguably they reduce the risk of human rights violations when it comes to the right to social security, with the bonus of being freedom enhancing. However, when it comes to other rights (such as education, basic health care), like CCTs, UCTs must be embedded in a wider social policy framework of adequate social services and monitoring, in order to facilitate rights maximization and materialization. Elsewhere it has been argued that cash transfers do not need to be made conditional on school attendance to impact on children’s education.6 Even the (unconditional) old-age pensions in Brazil have helped to increase school attendance, and there is evidence that the cash paid through the Namibian pension scheme has ultimately been spent on children’s education in spite of the absence of conditions. The recent pilot studies on UCTs in India, which have exhibited many similar positive results, also support this view.7
This debate is unlikely to be settled in the foreseeable future, but unconditionality can reduce the risk of human rights violation ex ante receipt of benefit, whilst continuing to reduce poverty.
FOOTNOTES
1 In 2012, Recommendation 202 on social protection floors was adopted as a new international labour standard at the International Labour Conference.
2 See: The Economist. 2013. “Cash to the poor, pennies from heaven: Giving money directly to poor people works surprisingly well. But it cannot deal with the deeper causes of poverty.” The Economist, October 26.
3 Standing, G. 2002. Beyond the New Paternalism: Basic Security as Equality. London: Verso.
4 Standing, G. 2011. The Precariat: The New Dangerous Class. London and New York: Bloomsbury Academic.
5 Hanlon, Joseph. Armando Barrientos. David Hulme. 2010. Just Give Money to the Poor: The Development Revolution from the Global South. Sterling VA: Kumarian Press.
6 Department for International Development (DFID). 2005. Social transfers and chronic poverty: Emerging evidence and the challenge ahead, A DFID Practice Paper.
7 Standing, G. 2012. Cash transfers: A review of the issues in India. Social Policy Working Paper Series – 1. UNICEF India.
by Citizens' Income Trust | Mar 3, 2014 | Opinion
This essay begins and ends with a genuine question: Given the proven desirability and financial feasibility of a Citizen’s Income, why does a Citizen’s Income not appear to be politically feasible?
Briefly in the Citizen’s Income Trust’s introductory booklet, 1 and at greater length in Money for Everyone, 2 the case is made for the desirability of a Citizen’s Income’s desirability. Because it would not be withdrawn as earned income rose, a Citizen’s Income would reduce marginal deduction rates for any household currently on means-tested benefits (including ‘tax credits’) and would make it more worthwhile for every one of those households to seek new or additional employment. Everyone of the same age would receive a Citizen’s Income of the same amount every week, and this would create social cohesion in place of the social division currently created by our means-tested and contributory benefits systems. Because a Citizen’s Income would be paid at the same rate whatever someone’s employment status, it would enable individuals to seek the labour market involvement that their circumstances required and it would provide a more flexible labour market for both employers and employees. Since neither the Citizen’s Income nor the higher Citizen’s Pension would be reduced as savings rose, they would not discourage savings as means-tested pensions and other benefits do now. A Citizen’s Income would be extremely simple to administer and it would reduce drastically the cost of benefits administration and would eliminate fraud and payments errors. Computerisation would be easy.
Both the introductory booklet 1 and Money for Everyone 2 (along with its website appendices 3 ) show that a Citizen’s Income could be paid for by reducing existing benefits and tax allowances and in such a way that no additional public expenditure would be required. Further, few households would suffer appreciable losses at the point of implementation, and that those households that do experience losses could easily recover their economic position by seeking relatively small amounts of additional earned income because that extra earned income would not result in the Citizen’s Income being withdrawn.
Unfortunately, arguments and evidence do not necessarily add up to political feasibility. Pilot projects in Namibia 4 and India 5 have exhibited significant improvements in labour market activity and in a variety of other social and economic indicators: but however persuasive the evidence might be, politicians have found it hard a) to recognise that this is the case, and b) to commit themselves to the policy that generated that evidence. In India, initial political enthusiasm for the pilot projects, for the evidence generated, and for unconditional cash transfers, has given way to a re-emphasis on the distribution of subsidised food to the poor: a process that provides plenty of opportunity for corruption, waste, and all of the usual problems that afflict means-tested benefits. In Namibia, a press release issued by the Namibian Basic Income Grant Coalition represents the problem:
Despite the positive results, the Namibian government has still not committed itself to the introduction of a BIG [Basic Income Grant: Citizen’s Income] in Namibia. Instead, senior government leaders have raised concerns that the grant would make people lazy and dependent on hand-outs. Such perceptions are rooted in prejudices rather than being based on the evidence provided by Otjivero! We wish to point out that the BIG Coalition arranged for many Namibians, including Members of Parliament (MPs), to visit Otjivero and to witness the developments there first-hand. The honourable MPs were free to assess the impact of the BIG themselves and they were impressed with the results achieved in Otjivero. However, they preferred to express their views in private instead of speaking out publicly in support of a national BIG. 6
A Negative Income Tax would be administratively different from a Citizen’s Income, but in other respects it would be similar: and Negative Income Tax experiments in the USA between 1968 and 1980 exhibited the same problem as that suffered by the Namibian and Indian Citizen’s Income pilot projects. In this case, discussion of initial positive results in relation to poverty reduction and labour market engagement was submerged by heated debate about what appeared to be a rise in the number of divorces: and even though it was shown that there had in fact been no rise in the divorce rate discussion of a Negative Income Tax did not resume. 7
In the UK, politicians and those who advise them have sometimes studied the evidence and come to the conclusion that social security reform in the direction of a Citizen’s Income would be worthwhile.
Christopher Monckton, who worked in Margaret Thatcher’s policy unit from 1982 to 1986, recommended a Citizen’s Income because it would meet basic needs, reduce employment disincentives, reduce administrative costs, encourage family cohesion, redistribute from rich to poor ‘but only mildly’, be revenue neutral (or involve only a small increase in the basic rate of Income Tax), stimulate many beneficial secondary effects, and be ‘politically neutral’: that is, it would both require and generate a political consensus. The problem that Monckton encountered was that the Treasury counts benefits as public expenditure but does not count tax allowances in the same way. If a tax allowance is turned into a cash payment of the same value, then public expenditure looks as if it has increased even though it hasn’t. As Monckton puts it:
Does all this matter? Yes it does, vitally, because national accounts prepared using this daft accounting principle are useless as a starting-point for policy formation. In particular, unless the Treasury is forced to mend its ways, it will always block the consideration of any universal benefit scheme, erroneously believing it to be in all circumstances unaffordable. 8
During the 1980s there were ‘One Nation Conservatives’ who advocated a Citizen’s Income because it was
about changing attitudes all the way down the income distribution instead of just at the top. For there is no reason to suppose that people on low incomes react differently to increased economic incentives than people who are rich. (Brandon Rhys Williams MP) 9
A little later, and a little further to the left, the Labour Party’s Social Justice Commission argued that
the case for Citizen’s Income is partly moral and partly economic. The moral case rests on the principle of social citizenship … civil and political rights must go hand in hand with economic and social rights. And just as civil and political rights belong unconditionally to all citizens as individuals, irrespective of need or desert, so all citizens have a right to a share in the social and national product sufficient to make it possible for them to participate fully in the common of society … the state is no more entitled to say which citizens have a right to a sufficient share in the common stock to participate fully in the life of the society than to say which citizens have a right to vote or to a fair trial. And in modern conditions that principle can be realised more simply and more completely by a Citizen’s Income than by any other mechanism. The economic case rests upon the falling demand for unskilled labour. … a Citizen’s Income … enables those without saleable skills to take low-paid or casual jobs of some kind, while at the same time receiving an income large enough to enfranchise them, without the stigma of a means test.’ 10
To the left of the political spectrum, and in response to what he believed to be an unnecessarily non-committal Social Justice Commission report, Meghnad Desai, a Labour peer and Professor Emeritus of Economics at the London School of Economics, recommended a Citizen’s Income simply because it would ‘reduce poverty and allow for greater flexibility in labour markets’, and because it would be possible to fund it by reducing tax allowances and other benefits. 11
Somewhere on the political map lie the Liberal Democrats. Paddy Ashdown, who was leader of the party from 1988 to 1999, was a firm advocate of a Citizen’s Income because it would be non-stigmatising, it would encourage work and saving, it would provide the labour market flexibility required by a modern economy, it would be
well targeted because people with higher earnings automatically pay back more than the value of the [Citizen’s Income] through tax
and it would
provide a basis that people could use to gain education and training, and to retrain during their working lives. 12
These political voices suggest that a Citizen’s Income is in principle politically feasible. All it would take would be for MPs, and particularly party leaders, to study the arguments and the evidence, to draw the obvious conclusion, to reach all-party consensus, to pass legislation, and then to implement the policy.
Instead, a constellation of ideas appears to be firmly lodged in the minds of politicians across a variety of cultures, including ours: that universal benefits make people lazy, even though the opposite has been shown to be the case, both in theory and in practice; that it is essential to means-test benefits, even though means-testing is known to be expensive, inefficient, and prone to error and fraud; that those on benefits need to be treated as households rather than as individuals, even though household claimant units generate complexity, expense, error, and fraud; and that as people on benefits increase their earnings their benefits should be taken away from them, even though such withdrawal of benefits is known to disincentivise labour market activity. A classic expression of the current political mindset can be found in a speech that the leader of the Labour Party made on 6th June 2013:
It doesn’t make sense to continue sending a cheque every year for Winter Fuel Allowance to the richest pensioners in the country. … When it comes to the decisions of the next Labour government it won’t be our biggest priority to overturn the decisions this government has made on taking child benefit away from families earning over £50,000 a year. 13
Ed Miliband offered no argument or evidence, and in the speech we find no consideration of the substantial administrative cost of sending the Winter Fuel Allowance to some pensioners and not to others as opposed to the very small administrative cost of sending it to everyone in receipt of a state pension; nor do we find any recognition of the fact that the wealthy pensioners about whom he was speaking are paying far more in Income Tax than they receive in Winter Fuel Allowance. On top of this, wealthy pensioners may be more likely to contributing financially to plans such as a pre-paid funeral, meaning they have less money free to spend on essentials like winter heating. Even if they are using a website like Discountcaskets.com to keep costs low, a funeral still remains very expensive and could put a strain on their finances.
When I explain a Citizen’s Income to a group of people, the normal experience is for the penny to drop for most members of the group – and you can sometimes watch it happen as furrowed browns turn to affirmative concentration – but for some members it never does. They simply cannot see that it would be both feasible and desirable to turn both tax allowances and means-tested benefits into unconditional payments, and by those means to pay to every citizen an unconditional and nonwithdrawable income. Means-testing is so securely lodged in their minds that no alternative proposition is able to dislodge it. Means-testing appears to be similarly lodged in the minds of Members of Parliament, except that in each generation there is a handful for whom the penny has dropped (of whom the late Malcolm Wicks was one). What appears to be happening is that Members of Parliament, and particularly ministers, are not doing their own reasoning. They are seeking evidence for public opinion in the print and other media, and they are finding articles and programmes in favour of paying more to poor people than to those less poor (‘because they need it more’), in favour of extracting benefits as quickly as possible as people’s earnings rise (‘because they don’t need it’), and in favour of imposing conditions on the receipt of benefits (to ensure that benefits recipients ‘deserve’ their benefits). Such articles and programmes may be a fair representation of public opinion because the vast majority of the public have not experienced an educational opportunity that might enable the penny to drop.
De Wispelaere and Noguera suggest that ‘psychological feasibility’ is prior to ‘strategic feasibility’ and that both are required for political feasibility. By this they mean that the public needs to be persuaded of the rightness of a new course of action before policy makers can be persuaded of it, and that both the public and policy makers need to be persuaded of the rightness of a new policy before it can be implemented. 14 There are of course counterexamples. Equalities legislation has often led public opinion, and the new behaviour generated by the legislation has helped to form new public opinion on a variety of equalities. Legislation to ban smoking in public places was ahead of the public mood in terms of its stringency, but public opinion soon followed. However, these counterexamples might not be relevant to the present case.
Starting with equal pay for men and women, and then moving on to other equalities legislation, most members of the public would have been clear about what the proposed legislation would achieve, and would have had some understanding of the reasons given for equalities legislation, even if they disagreed with it. Similarly, most members of the public would have been clear about what legislation to ban smoking in public places would achieve and would have had some understanding of the arguments for banning smoking in public places.
There were many people, particularly smokers, who were very against banning smoking in public areas. But once the legislation came in, public opinion started to change. It almost definitely led to people turning to things like Shiro tobacco-free pouches instead and quitting smoking altogether. Slowly, people realised that perhaps the legislation was a good thing. It has also led to vaping, which has become a popular alternative for smokers. It is a lot less damaging to our health as a vaporizer contains a small amount of nicotine compared to cigarettes. Not to mention, you avoid the by-products of smoking such as tar and carcinogens. They aren’t that hard to get hold of either, as a lot of stores have now been set up around the world, as well as websites such as Gourmet E Liquid.
These are both examples of what we might call ‘prohibitive’ legislation, because they prohibit part-icular easily identifiable types of behaviour. Legis-lation to establish a Citizen’s Income would be very different. It would be ‘positively innovative’, and would involve a transition from a current complex system to a future somewhat less complex one, rather than the easily understood prohibition of a single behaviour. Whilst the Citizen’s Income would be simple enough in its operation, transition from the current system to one based on a universal benefit could be far from simple. Members of Parliament would not find it easy to explain to their constituents either the proposal or its effects. The penny might not have dropped for them; and, if it had, then they might still find it difficult to enable it to do so for others.
Having said that, if a genuine Citizen’s Income were to be established, the benefits would be clear – as they were in the Namibian and India pilot projects. At that stage psychological feasibility would no longer be an issue. The problem is now. If psychological feasibility has to precede strategic feasibility, and if both are required before political feasibility becomes a possibility, then there really is a problem. However clear the benefits of a transition to a Citizen’s Income are to those for whom the penny has dropped, the penny has not dropped for the vast majority of the public, and there is little likelihood that it will do so in the near future for three reasons. Firstly, an educational process is required which begins with gaining an understanding of our current benefits system, moves on to an understanding of how a Citizen’s Income is different and better, and then moves to seeing how the transition could occur. Secondly, a Citizen’s Income is counter-intuitive because our intuition has for so long been formed by a benefits system characterised by means-testing. Thirdly, a transition that the public does know about – to Universal Credit – has so far been a disaster. Universal Credit is not universal, but members of the public might perceive the truly universal Citizen’s Income to be a kind of Universal Credit, and therefore decide that it must have all of the problems associated with Universal Credit.
Let us suppose for the sake of argument that public education has occurred, and has been of sufficient quality and depth to enable the majority of the British public to understand a Citizen’s Income and its benefits. Let us further suppose that ministers now find themselves carefully considering establishing a Citizen’s Income. Then another obstacle will appear.
Amongst proposed reforms of the UK’s tax and benefits systems that have failed to be implemented are the tax credit proposals 15 of the early 1970s, Brandon Rhys Williams’ proposal 16 for a Citizen’s Income in 1982, and his mother Juliet Rhys Williams’ similar idea 17 during the Second World War. Amongst proposed reforms that have been implemented are Family Allowance and then Child Benefit; 18 and amongst those about to be implemented is something like a Citizen’s Pension. 19 Three patterns emerge:
- The patterns that have changed the system, or that are likely to do so, have been for identifiable groups of people
- Those proposals that have changed the system have benefited from longstanding and widespread debate and a reasonable level of public understanding of what was intended
- Those proposals that have become Acts of Parliament are those that have not reduced the number of civil servants, and those that have not become Acts of Parliament would have done so. 20
The first pattern suggests that a Citizen’s Income ought to be implemented one demographic group at a time. Child Benefit is currently paid at a different rate for the first child, and equalising the rate for all children would give us a Citizen’s Income for children. Removing the link between the proposed Single Tier State Pension and National Insurance records would give us a Citizen’s Pension. Next could come a Citizen’s Income for young adults ( –this would facilitate university and other education). Then a Citizen’s Income for the over 55s (to ease the transition into retirement); and finally a Citizen’s Income for other working-age adults. 21
The second pattern requires a sustained and deep educational exercise by all possible means, of Members of Parliament, of others with an influence on the policy-making process, and of the general public. This will be a far from easy task.
The third pattern commits us to a significantly difficult task. The reason for the pattern is obvious. Civil servants brief ministers. If a proposed policy would increase the size of a department then a departmental head would be likely to brief in its favour, whereas a policy that might reduce the size of a department might generate negative or neutral briefings. A Citizen’s Income of almost any size would mean fewer households on means-tested benefits and therefore fewer benefits administrators; and the largest Citizen’s Income that could be financed by reducing tax allowances and means-tested and other benefits might significantly reduce the number of civil servants. We can therefore see that ministers thinking of exploring the feasibility and desirability of a Citizen’s Income might find their civil servants either advising against the proposal or amending it and therefore establishing something other than a Citizen’s Income. Anything more complex than an unconditional and non-withdrawable income for every individual would require additional civil servants to manage its regulations and yet more civil servants to administer it.
We have arrived at an understanding of the conditions that might make implementation of a Citizen’s Income possible: a substantial educational effort to enable the general public to see that a Citizen’s Income would be both desirable and feasible; a similar educational effort to enable ministers and Members of Parliament to develop the same view; a Citizen’s Income implemented one demographic group at a time; and ministers sufficiently convinced of the rightness of implementing a Citizen’s Income that they were able to listen to and then ignore any biased civil service briefings against a Citizen’s Income.
The conditions for implementation are perhaps both ‘additive’ and ‘conjunctive’: additive, like a tug of war team, because the strength of each element of the feasibility mix will enhance feasibility overall; and conjunctive, like a relay team, because the strength of the weakest element will determine whether implementation occurs. 22
We are asking a lot of the policy process: we are asking that a substantial and deep educational effort should succeed in changing millions of minds for which means-testing is intuitive; that Members of Parliament and ministers should give both time and sustained attention to a highly complex policy field; that policy makers will understand that the Citizen’s Income concept is non-negotiable and non-revisable: that is, that it is an unconditional and nonwithdrawable income paid to every individual; that ministers would be able to question negative briefings and maintain a steady course in the face of civil service attempts to complicate the proposal; and that interest and energy should be sustained as the different demographic groups receive their Citizen’s Incomes.
This really is asking a lot, and it is highly unlikely that it will happen. This means that however desirable and however financially feasible a Citizen’s Income might be, we might never see one implemented.
There is, of course, another possibility, and that is that policy-making does not always happen according to the logic that we have carefully constructed. We have looked back and found some patterns, and we have assumed that we can read off from them the future trajectory of tax and benefits policy. A brief look at one of the policies not implemented will help us to see that other possibilities might present themselves. The Heath Government’s tax credit plans of the early 1970s would have been implemented if a General Election had not intervened. It is true that the proposal was somewhat complex and would not have reduced the number of civil servants, but it would have represented a major change in the way in which Income Tax and social security benefits were understood. It was a political accident that meant that Tax Credits were not implemented and that means-tested in-work benefits have been normative for the past forty years.
Political circumstances could equally well generate a very different outcome, and, somewhat surprisingly, Iran might provide a useful lesson. When the Iranian Government decided to withdraw subsidies on food and petrol, and to compensate poor households for their additional costs by establishing a means-tested benefit, the administrative system collapsed and the only way to ensure that poor families had sufficient income to pay for the now more expensive essential commodities was to pay the benefit at the same rate to every individual. Iran had arrived at a Citizen’s Income by accident. 23 It is not beyond the bounds of possibility for the complexly computerised administrative systems for Universal Credit to collapse and for the only solution to be to pay a Citizen’s Income. Whilst a rapidly implemented universal benefit, paid for by abolishing means-tested benefits and tax allowances, would be likely to generate immediate losses for some households, these would not necessarily be large in comparison to losses sustained by large numbers of households in relation to recent cuts in benefit levels and entitlements.
The abolition of means-tested benefits, or the drastic reduction of households receiving them, would reduce the number of civil servants, but, in this age of austerity, we should no longer assume that the pattern discovered by surveying attempts at benefits reform during the last century will apply to this one. The implementation of the ‘small state’ is a permanent UK government project, even if more in theory than in practice, and the implementation of a Citizen’s Income could easily be justified on that basis as well as on the basis that there would be substantial administrative savings: a policy aspect always popular with Treasury ministers. Equally, a Citizen’s Income could be argued to be a step on the same road down which Universal Credit was already taking us, thus turning the exit from Universal Credit into a PR success.
Nobody can predict that such a scenario will occur, because accidents are precisely that: accidents, and therefore unpredictable. However, the scenario is a possible one; and there might be other possible scenarios that would require a government to react quickly on tax and benefits policy. Contingency planning is never unhelpful, and it might be that contingency planning in the direction of a Citizen’s Income is already in place, perhaps in preparation for the next financial crisis, so that quantitative easing can be paid out via a Citizen’s Income, thus increasing the consumption of goods and services as well as increasing the money supply. But if contingency planning is not in place then it ought to be. A useful mechanism would be a Royal Commission on income maintenance: a policy instrument that we ought to have seen considered before. Where a policy field is complex, where a long-term plan is needed, where an all-party approach is therefore required, and where multiple and changing factors need to be taken into account, a Royal Commission is a tried and tested means of considering the policy options available, of drawing together the necessary evidence, and of coming to a considered decision as to the best options. Little use has been made of Royal Commissions during recent history, but that is no reason for not considering the possibility in today’s particular circumstances. Whether a Citizen’s Income would be the best option for the reform of the tax and benefits system would be for the Royal Commission to decide. Whatever the outcome of the Commission’s research and discussions, a Citizen’s Income, and the ways in which it might be implemented, will at least have been carefully considered. A Citizen’s Income would in this way become a practical option; and, if one were to be needed in the midst of a crisis, then its implementation will already be a known quantity.
Good government requires nothing less.
Notes
1 Citizen’s Income: A brief introduction, Citizen’s Income Trust, 2013
2 Malcolm Torry, Money for Everyone: Why we need a Citizen’s Income, Policy Press, 2013
3 www.citizensincome.org/MoneyForEveryone.htm
6 Malcolm Torry, ‘Can unconditional cash transfers work? They can’, Citizen’s Income Newsletter, issue 2 for 2009
5 Guy Standing, ‘Can Basic Income cash transfers transform India’, Citizen’s Income Newsletter, issue 2 for 2013
6 Press release, ‘The Basic Income Grant (BIG) is Government’s responsibility’, Basic Income Grant Coalition, Namibia, 1st March 2012, https://bignam.org/Publications/Press_release_March_2012_to_Government.pdf
7 Robert A. Levine, Harold Watts, Robinson Hollister, Walter Williams, Alice O’Connor, and Karl Widerquist, ‘A retrospective on the Negative Income Tax experiments: Looking back at the most innovate field studies in social policy’, pp 95-106 in Karl Widerquist, Michael Anthony Lewis and Steven Pressman, The Ethics and Economics of the Basic Income Guarantee, Ashgate, 2005
8 Christopher Monckton, ‘Universal Benefit’, pp 3-6 in Citizen’s Income Bulletin, issue 16, July 1993, Citizen’s Income Trust
9 Brandon Rhys Williams, Stepping Stones to Independence, edited by Hermione Parker, foreword by David Howells MP, Aberdeen University Press for the One Nation Group of Conservative MPs, 1989, pp 35-6
10 Commission on Social Justice, Social Justice: Strategies for national renewal, London, Vintage, 1994, pp 261-2
11 Meghnad Desai, ‘Borrie is no Beveridge. Citizen’s Income now’, pp 7-8 in Citizen’s Income Bulletin, issue 19, February 1995, Citizen’s Income Trust, p 8
12 Paddy Ashdown, ‘Breaking the poverty trap: A Basic Income’, pp 5-6 in BIRG Bulletin, no 10, 1989, p 6
13 www.labour.org.uk/one-nation-social-security-reform-miliband-speech#
14 Jürgen De Wispelaere and José Antonio Noguera, ‘On the political feasibility of Universal Basic Income: An analytic framework’, pp.17-38 in Richard Caputo (ed.), Basic Income Guarantee: International experiences and perspectives on the viability of Income Guarantee, Palgrave Macmillan, 2012
15 Her Majesty’s Government, Proposals for a tax-credit system, Cmnd 5116, Stationery Office, 1972
16 House of Commons Treasury and Civil Service Committee Sub-Committee, The structure of personal income taxation and income support: Minutes of evidence, HCC 331-ix, Stationery Office, 1982, p.423
17 Juliet Rhys Williams, Something to look forward to, MacDonald and Co., 1943
18 Malcolm Torry, Money for Everyone: Why we need a Citizen’s Income, Policy Press, 2013, pp 22-7
19 Department for Work and Pensions, A state pension for the 21st century, Cm 8053, The Stationery Office, 2011
20 Malcolm Torry, Money for Everyone: Why we need a Citizen’s Income, Policy Press, 2013, pp 43-5
21 Malcolm Torry, Money for Everyone: Why we need a Citizen’s Income, Policy Press, 2013, pp 49-50
22 Ivan D. Steiner, Group Process and Productivity, Academic Press, 1972, pp 17-18
23 Hamid Tabatabai, ‘From Price Subsidies to Basic Income: The Iran Model and its Lessons’, pp 17-32 in Karl Widerquist and Michael W. Howard (eds) Exporting the Alaska Model: Adapting the Permanent Fund Dividend for Reform around the World, Palgrave Macmillan, 2012; Malcolm Torry, Money for Everyone: Why we need a Citizen’s Income, Policy Press, 2013, pp 67-9