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 Yannick Vanderborght | Dec 30, 2013 | Opinion
To briefly outline what is going on in Ukraine, I would say “we have had enough, we want change.” Although I will have to disappoint all those who expect that basic income is a topic for the current Euromaidan protets in Ukraine, this article is about how basic income could help solve the conflict in Ukraine. First I will state my view based on my experience, and then I will suggest how to solve the conflict and how basic income could be a part of this solution.
How it started
Most media all over the world report about the events in Ukraine. They call it a pro-European protest and say it is connected with an association agreement between the European Union and Ukraine. In my opinion, this is not the whole truth because I think it is less about an agreement with the European Union but more about Ukrainians’ desire to be accepted as part of Europe and its community of shared (European) values.
Yes, the protests begun after the Ukrainian president announced a few days before a meeting in Vilnius that he would not sign the mentioned agreement even if the negotiations lasted for years. It is important to know that this agreement also contained a Deep and Comprehensive Free Trade Agreement (DCFTA), and the president said the Ukrainian economy would rather suffer than profit from the DCFTA.
Police tried to disperse protesters (11 December 2013).
A few days after the growing protests, in the early morning of 30 November 2013, special riot police troops used violence to disperse a small group of protesters. Videos of the operation were circulated all over the Internet. As a result, the protests swelled even more and after further clashes with police (in front of the parliament where even reporters were attacked) the main demand of the protesters changed into the resignation of the president and the government because the people had lost all trust in them.
This reaction can be understood as a breach of an unwritten social contract: the people in power can be corrupt, can enrich themselves and can rule with arbitrariness as long as they let others live their lives. But by using force against protesters they crossed the red line. People were afraid this could be the beginning of a police state.
All this, the failed agreement with the EU and the police attack that followed, was the final straw that broke the camel’s back because people were not satisfied with the situation in Ukraine.
New Year Tree in Kiev (December 2013).
The current situation
There are three main levels that help understand the current situation: a political, an economic and a social one. Of course, all these levels influence each other, and can be divided into several sublevels including the different versions of Ukrainian history.
Political situation
There is a huge chasm between the population and the political elite. That is why people do not trust institutions or parties. They are not politically apathetic, rather they have the feeling that the political elite does not rule for the population, which has no influence on this.
On the domestic political level, “families” (oligarchs) pull strings in their interests. Politics is often understood as a business in which investments must pay off. Thus, politics is closely tied to economic interests and is seldom connected to people’s will.
It seems to me that on the global political level various powers are trying to pull Ukraine in different directions. Here geostrategic, historical or economic considerations could play a role, but they are seldom consideration for the Ukrainian population.
Economic situation
No exaggeration, the state is facing a default. The IMF offered a program on the condition that the government increases natural gas prices for households. The government refused to fulfil these conditions because this would have also led to protests.
The unemployment rate is difficult to estimate because in some regions of the country a subsistence economy exists. And official salaries do not show the real income situation because people avoid taxes as they do not trust the state and its expenses. This makes it difficult to estimate the real economic potential of Ukraine.
In western and central Ukraine the main economy is agriculture; in eastern Ukraine the iron and steel industries dominate. Some companies are still part of the production chains that were established in the USSR, and their industrial facilities are often outdated and ailing.
Social situation
Barricade on a way to Maidan (17 December 2013).
Corruption is a huge problem and it is, as I call it, “institutionalised.” I mean, on the one hand, if you want to get a lucrative position (e.g. as a border official), you need to pay money to get there; on the other hand, bribes are distributed (e.g. a traffic policeman stops a car and gets a bribe and he pays a part to his boss who pays again to his boss and so on).
In the education sector, marks can be “bought,” and in the medical sector, which is free according to the constitution, you often have to give a bribe to get medical treatment. A similar situation exists in the judicial system and in courts.
Pensions are low, and the social safety net is weak. It’s hard to survive without the support of family members or friends.
Experience of the Orange Revolution (2004)
Foreign media often report that the country is deeply divided and that there is a risk of civil war. This is attributed to different languages in the regions. I doubt that this is true because even Ukrainians whose native language is Russian feel that they are Ukrainian citizens. After the Orange Revolution of 2004 there have been attempts to unite the nation around a common language. In my opinion, this does not work. Rather a nation-building process should be based on common values.
Another experience I had during the Orange Revolution: people were ready for change and there was an atmosphere of departure. But the longer they had the feeling that nothing changed for them, the more they got back into their old rut and their “revolution-energy” fizzled out.
Nevertheless, the society has changed over the years. Gradually, a fragile middle class has developed. However, during the rule of the incumbent president the middle class feels more and more threatened.
Impressions of the Euromaidan’s daily life
Maidan means “place” in Persian. It is the main place in Kiev, which is also known as Independence Square, and it is where the protests are taking place. Some public buildings (e.g. the Town Hall and the Trade Unions House) have been occupied and are being used for “the management of the revolution.”
Tents have been pitched to give people from all over Ukraine additional space to sleep. Even people from all over the world are present or support the people on the Maidan.
The atmosphere is peaceful and full of solidarity. The Maidan is mostly self-organized – partly by veterans with their experience in wars. People share and donate food, clothes and money. Cafes, bars and restaurants are open to everyone who needs to warm up and take a break from the “revolution.”
Webcam picture of Maidan in Kiev (29 December 2013).
The barricades, which the protesters built to protect them from possible police attacks, seem to be archaic. There is a stage, where bands play and other events take place (e.g. Euromaidan University), including programs. The place creates a surreal impression.
Webcams have been installed and an Internet station sends reports from journalists on the spot, with background information, rumours and interviews with experts. The “revolution” is broadcast live on the Internet.
However, when asked what they think about the future, people become silent because they are aware of the problems.
A way out
Ukraine would not be facing a default, if people were paying their taxes and those in power were not using public funds for their own needs. It is about honesty and transparency in the tax system. And the often quoted “gas-question” affects mostly the industry because Ukraine has enough own natural gas for the population. Hence, Ukraine has no real economic problem. If one takes into account the grain harvest and other commodities, Ukraine is a rich country.
In the political sphere there are proposals to change the constitution from a presidential democracy to a parliamentary one. Of course, this step could help change the technical aspects of the young democracy, but it would not have any noticeable influence on the daily life of the people.
In my opinion and from my experience in Ukraine, the most important thing for the country now is to keep this “spirit of revolution” alive by a vision. People have to see and feel improvements.
The big question is how to create such a vision and who should be responsible for its realisation? An answer to the last question could be found in the demands of the people on the Maidan: resignation of the president and government and new elections. And an answer to the first question could be found in Ukraine’s prospect of becoming an EU member. However, taking into account the situation in some EU member states (e.g. Rumania, Italy, Spain, France… where recently protests have also been taking place), I doubt that it is the best vision.
In my opinion, Ukraine should make an inventory of the problems, how they are seen by the people from all regions of the country, including ideas as to how they can be solved. Additionally, there should be an inventory of the economy, in order to understand what works, what is ineffective and what is needed.
Georgia and Poland are good examples of how one can fight corruption. And the experience of other countries could help Ukraine deal with its problems in almost any area. Ukrainians are clever enough to solve their problems, if they are allowed to.
And what about basic income?
I spoke with people in Ukraine about basic income, and the reactions were different.
A taxi driver who drove me once to the border spoke about the difference between Soviet times and now. “In Soviet times we had empty shelves in the stores but money; today, we have full shelves, but not enough money to buy what is offered,” he said.
Left wing groups did not like the idea because they felt people would become dependent on the state and would not rebel against it, if they did not agree with its decisions. But they affirmed the idea of an egalitarian society, in which people should have equal opportunities. I also heard the usual objections (e.g. who would work if there received regular payments), as they are known in discussions all over the world.
When Marina Weisband from the German Pirate Party (she is of Ukrainian origin) visited the Ukrainian Pirate Party in Ukraine, basic income was also a topic. However, the participants in the meeting said that before considering such an option Ukraine had to solve other problems.
Once I had the opportunity to speak with the local director of the World Bank in Ukraine, and to my surprise he knew about basic income. But he rejected the idea because he could see no way in which it could work in practice.
I also spoke with the Brazilian ambassador in Kiev when we wanted to invite him to speak at a symposium about the Brazilian law on basic income. Unfortunately, he had no time to come, but he told us that sooner or later basic income would have to be introduced.
Some time ago, I found out that in Soviet time, seemingly as a reaction to the civil rights movement in the USA, basic income was discussed under the name of a “guaranteed minimum.” Thus, basic income is not an entirely new idea here.
I also know a Ukrainian philosopher who supports the idea. He invited us several times to his radio show on basic income (I made an interview with him, which I later published in my blog).
I also had the opportunity to talk with the top-managers of international companies and they were not against the idea. They said it was politicians, rather than them, who should deal with such issues. They also said that politicians would reject the idea for fear of losing power.
Based on this experience, I think, basic income could be a part of the mentioned vision. And, unlike communism, it is a concrete and practical idea. Some materials on basic income have already been translated into Ukrainian and Russian.
And what about the interfering powers?
All these “families” should be aware that their wealth is based on the prosperity of the population, too. From my experience, I think, Ukrainians do not begrudge others their wealth, if they are allowed to live their own lives (cf. the above mentioned “unwritten social contract”).
And regarding all these foreign powers, it has to be said that Ukraine is actually a sovereign state. It could go its own way and act as a bridge from Europe. What is happening now on the Euromaidan is the question of values, such as justice, equality and freedom. And in my opinion, the European Union, which triggered all these events, should also remember these values. If this happens, the Euromaidan will really earn its name – the European Maidan of Independence.
For further reading on the Ukrainian revolution:
Understanding the Outrage in Ukraine
https://knowledge.wharton.upenn.edu/article/understanding-outrage-ukraine/
Opinion: Birth of a nation:
https://www.kyivpost.com/opinion/op-ed/birth-of-a-nation-333459.html
Sociologists have published the portrait of Euromaidan:
https://maidan.in.ua/sociologists-have-published-the-portrait-of-euromaidan/
by Karl Widerquist | Dec 13, 2013 | News
Rob Rainer of the BIG Push Campaign
A new poll conducted by the Environics Institute for Survey Research found that support in Canada for a “guaranteed annual income” (GAI), a form of Basic Income Guarantee (BIG), leads opposition by a margin of 46 to 42 percent. An additional 6 percent of Canadians answering the poll said that their support for GAI would depend on how the policy was implemented. The remaining 5 percent had no answer or no opinion. Adding the people willing to support BIG under at least some circumstances increases the margin of support to 52-42.
This was the first national poll ever conducted in Canada on basic income guarantee. Of those surveyed, 19 percent answered that they strongly favor the policy; 27 percent somewhat favor; 17 percent somewhat oppose; and 25 percent strongly oppose the policy. Karl Widerquist, co-chair of the Basic Income Earth Network said, “This is extremely important result. It is to my knowledge the first national poll showing more support for than opposition to a full-sized Basic Income Guarantee.”
Support was strongest in Quebec where an outright majority, 55 percent, of respondents favored GAI.
Conservative Senator Hugh Segal is one of the few legislators who has come out in support of a guaranteed annual income. -PETER BREGG / CP, the Toronto Star
The poll was somewhat ambiguous about which form of BIG was being queried. The two major variants of BIG are basic income (BI) and negative income tax (NIT). BI gives a grant to everyone regardless of other income; NIT gives a grant only to those with low income and phases it out as income rises. One question in the poll asked whether economic assistance programs should be equally available to all or only to those most in need, and 65 percent of respondents favored universal availability.
However the exact wording of the question on GAI was, “Some people believe the best way to help economically disadvantaged people is to provide them with something called a ‘guaranteed annual income.’ Would you favour or oppose a guaranteed annual income policy for Canadians, to replace the current economic assistance programs?” The survey further explained, “This would involve every Canadian receiving a specific amount of money from the government each year, which would then be ‘clawed back’ with every dollar of income people earn. Such a program is intended to ensure everyone has enough money for the basic necessities, and would replace other forms of economic assistance, like welfare and unemployment insurance.” If the grant is “clawed back” through taxes on income, while people still receive the grant, it is a basic income, but if it is “clawed back” by actually reducing the grant, it is a negative income tax.” Probably different respondents had different ideas about whether the GAI would fallow a BI or an NIT model.
The poll was a telephone survey of 1,501 adult Canadians. It was conducted between September 17 and October 13, 2013. The so-called “margin of error” of the poll was plus or minus 2.5 percentage points, meaning that 19 times out of 20, a poll conducted in this manner would be within 2.5 percentage points of actual national opinion (assuming sampling is unbiased).
Bob Hepburn, the Toronto Star
There is a new national movement for BIG in Canada, called the BIG Push Campaign, and led be Rob Rainer. Canada will also be the site of the 2013 Basic Income Earth Network conference: “15th International Congress of the Basic Income Earth Network: Re-democratizing the Economy,” Friday June 27th to Sunday June 29th, 2014. McGill Faculty of Law, Montreal, Quebec. Thursday June 26th, 2014, NABIG Preconference Workshop Day. https://biencanada.ca/congress/
The survey report is online:
Environics, “Responsible Citizenship A National Survey of Canadians,” EvironicsInstitute.org, October 31, 2013. www.environicsinstitute.org/uploads/news/tf%202013%20survey%20backgrounder%20-%20responsible%20citizenship%20-%20oct%2031-2013%20eng.pdf
A report on the poll in the Toronto Star is also online:
Bob Hepburn, “New poll shows surprising support for anti-poverty plan,” the Toronto Star, December 12, 2013.
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.
