by Josh Martin | Mar 13, 2015 | Opinion
In the run-in to the UK general election in May, discourse has emerged over the Green party’s policies as they have gained increasing support in the polls. Arguably the most discussed policy of theirs has been their support for a citizen’s income (also known as a basic income). Donald Hirsch, writing from the well-respected Joseph Rowntree Foundation, contributed to this debate with a recent policy paper titled “Could a ‘Citizen’s Income’ Work?”.
Hirsch’s paper provides an excellent analysis of the current debate over the logistics of the citizen’s income debate as well as the philosophical reasons to support or reject it. However, his key points concern only the funding a citizen’s income. He argues that “a citizen’s income set at existing safety net levels would require the state to take about half of all earned income above existing tax and NI thresholds” (12). This tax hike would increase further if the citizen’s income absorbed Housing Benefit, which he argues remains a major question mark for any citizen’s income plan, since Housing Benefit’s inclusion in a citizen’s income would require its amount to be doubled. But are tax rates over 50 percent really that horrifying? Until Thatcher was elected the highest income tax rate bounced around 75-98 percent during the previous thirty years.
Regardless, it is unfair to assume that a citizen’s income will be solely paid for using income tax. The Green party explicitly supports a wealth tax, which would certainly go some way toward financing a citizen’s income. The Green party has promised to release a costing plan for their citizen’s income scheme this month, yet Hirsch jumped in to say it was financially ludicrous before seeing their plan.
On another note, Hirsch believes that leaving Housing Benefit separate from a citizen’s income would fail to achieve the simplicity the citizen’s income is supposed to achieve by keeping means-tested benefits in the UK welfare state. However, earlier in this paper Hirsch admits that disability benefits are left out of financing plans by the Citizen’s Income Trust because such means-tested benefits will still be needed to help those who’s cost of living are understandably higher than average. Housing is not much different. Housing Benefit is largely important in the London housing market, and it can be seen as an understandable means-tested benefit to keep. Further, I disagree with his claim that keeping means-tested benefits harms the point of implementing a citizen’s income.
Keeping means-tested benefits like Disability Living Allowance and Housing Benefit does not mean that we should abandon the pursuit of a citizen’s income completely. Implementing a partial citizen’s income—even if it means keeping a means-tested branch of the welfare state—is still worthwhile, as it will incentivize work and establish the importance of unconditional income. Simplicity is not an all or nothing goal.
My last quarrel with Hirsch regards his selective use of empirical examples of partial citizen’s income schemes throughout the world. He highlights the Namibian pilot project, Alaska’s Permanent Fund Dividend, and Iran’s cash benefit in place of subsidies. While Hirsch is correct in saying that none of these are particularly apt comparisons to the UK (the Namibian pilot gave less than $1 per day funded by donors and Alaska and Iran’s programs are funded by resource windfalls) he chose to ignore the more recent Indian pilot projects as well as the negative income tax experiments in the United States and Canada in the 1970s. The latter is a more apt comparison to the UK, since the UK, US, and Canada are all Western developed democracies, and the former proved successful enough that Guy Standing believes that the Indian government will continue to look into cash transfer programs like the citizen’s income.
A citizen’s income in the UK is not as unbelievable as one might think. Conditional cash transfer programs across the Global South have been implemented with success, showing that cash transfer programs (though largely conditional at the moment) have political viability. These programs even finance themselves to an extent since they are commonly adopted as development strategies. Across the world cash transfer programs are gaining momentum, and Switzerland is going to vote on a citizen’s income scheme in 2016.
Hirsch’s article raises many key questions and obstacles for the citizen’s income movement in the UK, but it also neglected to acknowledge the Green party’s forthcoming costing plan, the desirability to implement a citizen’s income alongside Housing Benefit, and legitimate empirical examples of partial citizen’s income schemes. Even if Hirsch disagrees with the citizen’s income as a policy, it has gained enough traction as an idea that he had to write such an article to explain its shortcomings during election season. While I agree that it remains politically difficult to achieve, I do not think he admits just how much progress has been made in the past few years of the movement.
by Karl Widerquist | Jan 7, 2015 | Research
This opinion piece discusses results of the recent Basic Income pilot project in India.
Renana Jhabvala, “No conditions apply.” The Indian Express, December 9, 2014.
The CTs enabled children to go to school, often switching from a non-functional government school to a private one. -The Indian Express
by Josh Martin | Dec 26, 2014 | Research
[Josh Martin]
In this opinion piece in an Indian newspaper, Guy Standing, who was one of the driving architects behind the Indian basic income pilot projects in the past few years, argues for a basic income as a better alternative to the large subsidies in place that are aimed to help those in poverty buy goods at discounted prices. Standing points out the inefficiencies of the subsidy programs and then promotes the three main effects of the basic income: it improves personal and community welfare, stimulates growth, and harbors an emancipatory value that boosts the other two effects.
Guy Standing, “Cash transfers can work better than subsidies”, The Hindu, 6 December 2014.
necessary?“The Public Distribution System acts as a deterrent to local food production.” Picture shows a woman showing her ration card to purchase subsidised rice in Rayagada, Odisha.— Photo: AP (Source: The Hindu)
by Josh Martin | Dec 20, 2014 | Research
[Josh Martin]
Utilizing the momentum against payday loan lenders generated by HBO’s John Oliver, Santens takes the opportunity to highlight the basic income’s impact on indebtedness. Using results from the basic income pilot projects in India and Namibia, Santens shows how effective the unconditional transfer is at combating indebtedness. There are a lot of quick payday loans you can apply for if you are looking for some extra money or quick cash during a financial emergency. If you’re looking to apply for a loan or just see what rates you could be looking at, start looking into payday loans and see how they could bide you over until payday.
However, for those with a low income this can be a slippery slope that leads to what seems to be inescapable debt. Someone who has a steady income can easily pay back a payday loan within a month or 2 of them getting it. They simply use the extra money to pay for whatever it was needed for and then have no issue paying it back within the necessary time.
However, it isn’t this easy for those with the lower or unstable incomes. If they take out a payday loan then they may not have the money they need to pay the loan company back which leads to late-payment fees or higher rates; pushing them even further into debt. Luckily, they can look for a payday loan consolidation service for them to help get them out of the poisonous cycle.
Scott Santens, “Payday Loan Lenders Are Unstoppable. . . Or Are They?”, Medium, 16 August 2014.
by Citizens' Income Trust | Sep 15, 2014 | News
Conference report: 63 people attended the conference, held by invitation of the British Library at its conference centre.
Anne Miller, Chair of the trustees, welcomed everyone to the conference, offered a brief history of the recent Citizen’s Income debate in the UK, and explained that an important aim of the conference was to help the Citizen’s Income Trust’s trustees to develop a strategy for the next few years. Jude England, Head of Research Engagement at the British Library, then introduced the British Library and its many research and educational facilities. Malcolm Torry, Director of the Citizen’s Income Trust, explained a few terminological matters: that a Citizen’s Income is an unconditional, nonwithdrawable income paid to every individual as a right of citizenship; that different rates can be paid for people of different ages; that a Basic Income is the same thing as a Citizen’s Income (as is a Universal Benefit or a Social Dividend); and that in the UK the words ‘minimum’ and ‘guarantee’ are tainted by association with means-testing and so should be avoided. Child Benefit would be a Citizen’s Income for children if it were paid at the same rate for every child. Debate ensued on the definition of a Citizen’s Income, and on the meaning of citizenship.
Guy Standing, Professor of Development Studies, SOAS, University of London, spoke on ‘Citizen’s Income: an income floor for the Precariat, and the means of global development’. He explained that we are in the midst of a painful transition. More flexible labour markets are leading to the breakdown of social insurance methods for sustaining income and to a resultant increase in means-testing, which in turn leads to categorising people as deserving and undeserving poor. Means-testing reduces incentives to seek employment so coercion, sanctions and ‘workfare’ are the result. The precarity trap (the fact that it is irrational to take short-term low-paid employment if that means frequent benefits applications) might now be as significant as the poverty trap. Professor Standing described some of the results of the recent Citizen’s Income pilot projects in Namibia and India, and offered four justifications for a Citizen’s Income:
- Justice: our wealth is due to the efforts of our forebears, so we all deserve a social dividend.
- Rawlsian: a policy is only justifiable if it improves the position of the poorest member of society. A Citizen’s Income can pass this test
- A policy must pass the paternalism test: that is, no policy is just if it imposes tests on some groups that are not imposed on others. A Citizen’s Income passes this test, too.
- The ‘rights not charity’ principle. Due process was an important provision in the Magna Carta. Means-tested benefits allow discretion to State officials, thus bypassing due process.
John McDonnell MP introduced Tony Benn’s theory of political change: that new policies are thought ‘bad’ and then ‘mad’ before everyone claims to have thought of the idea. Thomas Kuhn’s research on scientific change suggested that current theory becomes problematic, new possibilities emerge, and suddenly a paradigm shift occurs. Iain Duncan Smith’s Universal Credit and other changes are revealing the problematic nature of the current benefits system, but there is a vacuum in terms of new ideas. A Citizen’s Income brings together debates about citizenship and poverty, and provides the necessary new paradigm: but obtaining agreement on the implementation of a Citizen’s Income won’t be easy. For the Labour Party, Ed Miliband will only move when it is safe to do so (as he has, for instance, over energy bills). When he does move, then he gathers support. We therefore need to make a Citizen’s Income safe for politicians. We need to lead so that the leaders can follow. The Labour Party is bereft of policies designed to tackle poverty and precarity, so the Trust needs to work with think tanks to provide the required package, and it needs:
- A seriousness of intent
- A professional approach
- Confidence
- Excitement and enthusiasm
Natalie Bennett (Leader of the Green Party) suggested that the outcome of a successful campaign would be that she would be able to say ‘Basic Income’ on Newsnight and everybody would know what she meant. People do ‘get it’ when the idea is explained to them, because the welfare safety net has fallen apart and they want to be able to feed their children without going to food banks. Public education is essential. Biological evolution is punctuated evolution: that is, alternating periods of stability and change. A Citizen’s Income constitutes the next major change because it would change everything, and in particular would provide both economic security and ecological sustainability. The Trust’s task is to educate people about a Citizen’s Income and its effects.
Tony Fitzpatrick (Reader, University of Nottingham) entitled his paper ‘Schemes and Dreams’. The welfare state established after the Second World War was the closest that we’ve ever got to achieving both security and freedom. We must now ask how we should achieve that combination today. Dr. Fitzpatrick discussed four moral contexts: productivism, distributivism, the deliberative, and the regenerative. A post-productivist settlement is needed if we are to conserve the world’s resources. A Citizen’s Income could contribute to that happening, and it could conform to all four moral contexts.
After discussion, and then lunch, three working groups met and then presented their findings at a plenary session:
Brief reports from the working groups
- Funding options: If the level of the Citizen’s Income is too low then it might not be politically inspiring. A variety of funding methods were discussed, but because policymakers are cautious, in the short term it might be important to concentrate attention on the Citizen’s Income itself rather than on possible funding mechanisms: so initially a Citizen’s Income would need to be funded by reducing existing tax allowances and benefits, with other mechanisms being considered later.
- Political feasibility: We need to avoid current vocabulary in order to avoid stale current debates; we need to offer a clear message of hope through visual representations; we need both a core message and variants to appeal to different audiences; we need a group of sponsors to raise the debate’s profile; and we need to relate to MPs, MEPs, NGOs, and other groups, so that they can promote the idea. A Citizen’s Income is the route to emancipation and freedom, and to the exercise of a variety of rights, and rights language could be useful. A Citizen’s Income enables people to care for others, so care language could also be helpful. Pilot projects will be important.
- The research required: Qualitative research is needed to test the acceptability of different ways of expressing a Citizen’s Income. The level at which a Citizen’s Income would be paid would also affect the idea’s acceptability. We need to show that people would wish to work in order to demolish the myth that there would be numerous free-riders. We need to show that a Citizen’s Income would act as an economic stabiliser in the context of a gap between wages and productivity; and we need to show how a Citizen’s Income would impact on health and other outcomes.
Panel discussion
Natalie Bennett (Leader of the Green Party) asked the Citizen’s Income Trust to provide both a wide variety of material and a clear and simple message; Kat Wall (New Economics Foundation) asked the Trust to be clear how work and social participation would be affected by a Citizen’s Income; and Neal Lawson (Compass) said that the time is right for a Citizen’s Income so we need to grasp the opportunity. A moral argument is required, and not just the figures. We need the courage to be utopian. Whilst a Citizen’s Income isn’t about everything, it is about security. Such central connections need to be clearly represented in new ways. Bert Schouwenburg (of the GMB Trade Union) discussed the fact that no trade union has a position on Citizen’s Income, and that that needs to change. Trades unions are wage brokers, and it needs to be made clear that a Citizen’s Income would complement that activity. Chris Goulden (Joseph Rowntree Foundation) explained that researchers are meant to be sceptical. A Citizen’s Income is dignified and simple and it avoids stigma, but such questions as who gains and who loses are important. ‘Something for something’ remains a significant public attitude, and lifecourse redistribution is acceptable, but not redistribution across income groups. A Citizen’s Income campaign needs to take account of such attitudes.
Further discussion followed; and then Professor Hartley Dean (London School of Economics), who had chaired the panel discussion, summed up the conference:
Citizen’s Income is a technology, or policy mechanism, which can serve a variety of ends. We must ensure that it serves social justice. We need to say how it would work, and the detail matters. Citizen’s Income is also a philosophical proposition. It is elegant, and it challenges prevailing understandings, for instance, of work, of human livelihood, of relationships of care, and of rights. ‘Unconditional’ is a stumbling block when applied to people of working age: but ‘working age’ is socially constructed. Work is diverse, and not just what happens within a wage relationship. A Citizen’s Income would support a variety of forms of work. Social insurance is risk-sharing, and a Citizen’s Income would also constitute risk-sharing. It deals with risk now in ways that social insurance did sixty years ago.
A global Citizen’s Income is a distant prospect, but borders are breaking down and citizenship is changing. We need to keep alive a big vision.
