Only problem with Basic Income is an unwillingness to move to consensus on reform..

Chris makes an important point regarding Natalie Bennett’s apparent inability to explain the Green Party’s basic national income policy (which has been policy for almost a generation) in her interview with Andrew Neil…

He’s clearly disturbed by Bennett’s lack of clarity (as the Greens emerge blinking into the light of Westminster scrutiny after many years of being studiously ignored), but also by Neil’s reliance on Westminster shibboleths about what’s possible/desirable in government:

Mr Neil’s implication that a BI of £71pw is inferior to a personal allowance of £10,000 for the low paid is also wrong.

Take for example, someone earning £14,000 a year. She currently pays £800 in tax, giving a net income of £13,200. Under a basic income, she’d have to pay tax on all this £14,000. That’s £2800. But she gets £3692 in BI. That gives a net income of £14,892. She’s better off. BI, then, is better for the low-paid than the current £10,000 tax allowance.

This is even more true when we remember that low-paid work is often insecure. A BI is better for those who shift from work to unemployment and back again, as it ensures a continuous income with no threat of benefit delays.

In these senses, the interview was a car crash on both sides: Neil posing questions that are easily answered, and Bennett failing to answer even these.

And Neil is by far at the upper end of policy able broadcast political journalists. The trouble (apart from having no modern equivalent of Weekend World or the Money Programme) is that the penny has still to drop on the need for a broader debate (and public engagement) on the shape of such reform proposals and how they might fit into the broader picture.

After giving a broadly positive assay to the Green’s Basic Income idea, he lodges two significant problems…

BI does create some losers. Anyone earning over £18,460 is worse off with a BI of £71pw than under a £10,000 personal allowance. This is a big problem. It suggests that a BI can only be popular if accompanied by more redistribution – higher taxes on the rich to pay for a lower tax rate on lower earnings and/or a higher BI.

Secondly, there’s the question: is there the state capacity to effect such change? Everyone knows the shift to Universal Credit has been a mess. I’d like to think this because of Iain Duncan Smith’s personal inadequacies. But it might also be that the state apparatus lacks the ability for reform. One of BI’s great virtues – its simplicity and low administrative cost – also creates a big constituency in Whitehall opposed to it.

I suspect – hope – that there are solutions to this. A BI should not be introduced by the fiat of a single government. Instead, we need a new Beveridge report which would publicize its merits and ensure that it benefited as many people as possible. Only when it has such mass support should it be implemented.

The sort of tinkering that Gordon Brown often indulged in assumed broad trust and buy in for the current system. The financial crisis and the boom/bust prosperity/austerity periods which bookended it, mean that that consensus can no longer be taken for granted…

, ,

  • Reader

    A basic income as described above would disadvantage me personally, along with anyone earning anything near the median income, but that isn’t a big problem, as it would make life a hell of a lot better for the unemployed and at lower incomes. Especially if it sidestepped the JSA hell-hole. I have no interest in forcing people to try to get jobs when there are quite enough people who actually want to earn a bit of extra money. Cutting out a load of bureaucracy would be a massive bonus – especially for casual workers and zero-hours workers (is there a difference?)
    But it’s nowhere near a complete solution, is it? Is there a similar simplification proposed for housing benefit or child benefit?

  • barnshee

    Er what about National Insurance Contributions another 13% on income over £6000(approx)? Who would pay these BI`s

  • SeaanUiNeill

    Basic Income or citizen’s income always seems to attract endless questions about how it might function. This site’s FAQ page is pretty informative:

    One of the strongest arguments for me is that the very expensive state intrusion that the current benefit system requires could be scrapped. And with no Puritan requirement to prove need through absolute poverty, “enterprise” amongst those recipients now permitted to earn extra would be stimulated.

  • SeaanUiNeill

    How very extraordinary! Mick posts a really intelligent attempt to air those issues around the one idea that genuinely offers some answer to the intractable problems of the poverty trap and the revitalisation of a grass roots economy, and only three comments! In the meanwhile, Gerry Kelly’s wee dig at Dodds gets 206 last count, and still rising. Priorities, priorities!!! I despair……