April 1st Reply to Iain Duncan Smith

I refer Iain Duncan Smith to the 2009 report Dynamic Benefits he commissioned
The first part is a thorough, devastating critique of means testing, which creates a strong work disincentive at low incomes. There are two directions in which this malign effect can be removed: reduce or abolish benefits, or give benefit equivalent to everyone. Before readers dismiss this second  option, I refer you to a number of graphs in Dynamic Benefits, notably on pages 88 and 162, which explicitly demonstrate that the withdrawal of means tested benefits is  a tax so far as the recipient losing them is concerned. This tax equivalent is paid now, by everyone who has too high an income to qualify for benefits. What the more perceptive readers will already have grasped is that this tax is massive on small incomes, but negligible on high incomes.
Of course, a Think Tank set up by IDS was not looking for logical, fair solutions, just ones which a future (in 2009) Conservative government might want to consider. Dynamic Benefits simply answered the question “What is the least we must do to remove the work disincentive?”. It makes a creditable fist of hiding the logical, fair solution, which would be to move that tax equivalent from the backs of the low paid, on whom it is onerous, and ask the better off, for whom it would be a much smaller burden, to bear it. In other words a Basic, or Citizens’ Income (CI). There is already a movement for this:
In passing, the Citizens’ Income is also to be found in the small print of the Green Party’s policies.
But instead, Dynamic Benefits has cleverly, and until now deplorably successfully obfuscated that conclusion. The Universal Credit to be introduced is more niggardly than the one proposed by Dynamic Benefits, but even so it is a step in the direction of a CI. But instead of the vision of a society where the work incentive is restored, and there is no need for compulsion , especially whenever jobs are scarce, as now, this is combined with a swathe of benefit removals. It is an April 1st lunatic return to an attempt to identify the undeserving poor. As long as there is means testing, you must either pay people who don’t need help , deprive people who are already desperately short (including the disabled), or fall between two stools and do both.

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