Last Sunday Natalie Bennett was on Radio 4, the Westminster Hour, on welfare benefits. First, I must say how impressive Natalie is under fire. This was Carolyn Quinn’s opening salvo:
“The Green Party website says you would pay a benefit called the Citizens’ Income to every citizen regardless of whether they are in work. It says:
“with no jobcentre to hound them they could be more choosy about the work they do. If they have a guaranteed safety net and no compulsion they will be less likely to settle for low wages in unpleasant jobs.”
It seem that the Green Party is saying if you don’t want to work we will give you an income anyway and you can stay in bed most mornings.”
Natalie was ready for this with a creditable ‘damage limitation’ strategy. She deftly sidestepped what should be central to the debate as ‘a long term aspiration’. She then gave as effective a reply as was possible without using the Citizens’ Income.
Here is what Natalie could have said:
“George Osborne thinks all claimants are doing that now. The Citizens’ Income works on the principle that persuasion is better than force. It creates a work incentive. Let me draw your attention to Dynamic Benefits, the report commissioned by Iain Duncan Smith and published in 2009. It forms the basis for his so-called welfare reforms. Its main proposal is the Universal Credit, which is an emaciated version of a Citizens’ Income. Dynamic Benefits begins with a devastating critique of means testing. It explains, giving numerous detailed examples, that the withdrawal of means tested benefits is exactly the same as a tax for the person losing a benefit. This creates a massive work disincentive for anyone on a small income. On pages 88 and 162 there are graphs showing that due to benefit withdrawal, single parents in part time work for example lose a larger part of their income clawed back in tax or tax equivalent than bankers on bonuses.
Carolyn Quinn [actually said]:
So you don’t think the welfare budget needs to be cut?
There is a strong body of evidence that the austerity strategy is counter-productive, but the deficit is a separate issue from the need to correct this serious flaw in the welfare system. The first part of ‘Dynamic Benefits’ could be cut and pasted under the heading ‘The Case for a Citizens’ Income’. It would be fiscally neutral, neither cutting nor adding to the real tax bill.
CQ [actually said the first sentence]:
63% of people in a YouGov poll in the Sunday Times today said that the benefits system was not strict enough and too open to fraud. I don’t see how your Citizens’ Income addresses that concern.
Surprisingly, there are only a few hundred families who have reacted to means testing in the way the public thinks large numbers have, and Osborne says has happened, but it is a perverse incentive. A Citizens’ Income creates a work incentive even when jobs are scarce. Because the Universal Credit is woefully inadequate, it has to be combined with compulsory workfare which is not just unnecessarily harsh, it is absolutely barmy with 50 or more applicants for every job in some areas.
CQ [actually said]:
That wouldn’t bring you in tune with the public. In the last few decades there has been a steep fall in support for more spending on benefits. Even in recent years when unemployment has risen, the British Social Attitudes Survey shows this on a wide range of issues. It is striking that support for extra spending on Unemployment Benefit remains remarkably low despite unemployment having reached its highest level since the question was first asked in1998. So you are putting forward a policy which is opposed by most people.
The main problem is that means testing has been an unrecognized, serious flaw ever since the Beveridge Report was implemented in 1945. That does need putting right, and Iain Duncan Smith claims to be doing that. Dynamic Benefits is not a Green Party publication, it is the basis of the government’s strategy. But they have been allowed to get away with a clever obfuscation of what is really needed in response to the problem the report reveals. Instead, we have the sheer cruelty of this attack on the most vulnerable. The Labour opposition have slavishly accepted the government’s agenda of combining a debt crisis caused by rich people with an excuse to cut benefits to the poor, and sections of the press are helping the government to get away with it.
Carolyn Quinn would no doubt stop Natalie at this point, but the foregoing would have been a useful start. Further points could be made as the opportunity arose. A possible exchange could have gone like this:
If the Citizens’ Income is such a good idea, and the problem has existed as you say for 60 years, how come it has never been suggested before? I can think of one good reason – it would entail a massive increase in taxation. Are there any costings available?
As I have just explained, a massive disguised tax is being paid now by the lowest paid – the least able to bear it. All the Citizens’ Income does is shift this burden upwards. It has been put forward before. Lady Rhys Williams, a member of the Beveridge Commission wrote a minority report recommending a Basic Income in 1944, having identified in advance what Dynamic Benefits now describes in detail. There are Citizens’, or Basic Income movements in Britain, Europe, and world wide: BIEN, and an intriguingly similar scheme exists in, of all places, Alaska – the Permanent Dividend Fund. All these can be Googled. Costings can come once the principle is understood. The immediate need here and now is to expose Iain Duncan Smith’s answer to means testing as crass and wrong headed.
For the record, here are the links to the sources just mentioned.
When Natalie is given the opportunity for a more in-depth interview, two major points which she can make are on disability and the Bedroom Tax. The work disincentive caused by means testing creates a ’knock-on’ incentive to claim to be disabled, so they too must be compelled to join the 50 able bodied already desperately competing for every job. The Bedroom Tax is the straightforward dishonest abolition of a benefit – it will only work because there is nowhere to downsize to. The Citizens’ Income will give everyone a standard accommodation allowance. Whether your home is a cardboard box or a castle, you get the same. In time, market forces would eventually adjust to this without putting landlords in the driving seat. This would lead naturally to the question of costings.
But the cost of that would be gigantic! Is the Green Party mad?
No, this is just one of the more extreme consequences of means testing. The first thing that needs to happen is for the general public to grasp the sheer enormity of the hidden tax paid by those whose Housing Benefit has just been withdrawn, I don’t think a fair minded public will defend such an injustice.
[More typical derision]
Look, I’ll meet you head on, but don’t interrupt till I say you can, OK? The absolute minimum Citizens’ Income will consist as follows: £71 per week JobSeekers Allowance, Rent (may have to be different locally), say £74p.w., and a further £25 per week if the £9,440 Personal Tax Allowance is shared fairly. At present it benefits the highest tax bracket far more than the low paid it is supposed to help. So that comes to £170p.w. If you then have a flat tax at 50% – let’s keep it simple -, the break even point is only £340 per week -£18,000 per annum. Everybody below £340 is better off, and those on really high incomes pay many times what the Citizens’ Income is worth. The details won’t be exactly like that, but the principle is that those on a low income should not be losing a bigger proportion of it than the better off. Read Dynamic Benefits.
We always knew that the first time we put our heads over the parapet on this issue we would meet this kind of barrage. But ‘not yet’ has now gone on for 40 years and counting. In the long term, the Citizens’ Income, or something better which serves its intended purpose of allowing a recession to be viewed with equanimity, is essential to saving a planet habitable by future generations. But the Citizens’ Income principle is directly relevant and vital now to the welfare benefits debate. Natalie does read my blogs, but she does not yet appear to be taking me seriously. She does not, for example appear to have read Dynamic Benefits (2009)
as she promised me she would. But she will get more opportunities. She demonstrated last Sunday night that she is a strong swimmer. She needs pushing off the diving board.