On 4th March, Natalie Bennett will address an event organized in the House of Commons by the Citizens’ Income Trust. Here are some helpful thoughts on what she might say. I shall be there if she needs me.
“This gathering, on the topic of a Citizens, sometimes called a Basic Income, in the Houses of Parliament, is I believe a first, but I hope it will not be unique. Of course it isn’t the first time it has been mentioned here. A succession of references can be found in Hansard going back over many years. Sir Brandon Rhys Williams MP was a lifelong advocate, following in the footsteps of his mother, the formidable Lady Juliet Rhys Williams, who as a member of the Beveridge Commission, proposed a Basic Income in 1942 as an important element in the Commission’s recommendations.
“Lady Rhys Williams pointed out that whilst the insurance based scheme which did see the light of day, and was duly implemented by the post war Attlee government, would work as long as there was full employment, for anyone unemployed and who had not yet qualified for benefits by their National Insurance contributions, there would be a serious work disincentive. ‘National Assistance’, the fall back provision for anyone with no other income or entitlements would have to be means tested. This could be looked at in either of two ways, depending on your outlook. It could be seen as a ‘Scroungers’ Charter’, or a ‘Poverty Trap’ I don’t know which view Lady Rhys Williams took. She was simply being far sighted about a potentially very serious structural flaw in the whole system.
“The Trade Union members of the Beveridge Commission did not merely reject the Basic Income out of hand, they even refused to allow Lady Rhys Williams to publish a minority report. Her concerns were dismissed as irrelevant. Even though full employment had never been achieved, for the majority of members on the Commission, and for the 1945 Labour government, full employment as the norm was an article of faith. So not only was the Citizens’ Income held back for a generation, it remained below the radar of all politicians when it did become relevant, and crucially it remains below the radar of both the government and main opposition to this day. It is particularly sad that Cardinal Nichols and the 27 Anglican bishops, who have recently deplored the tearing down of the welfare safety net, seem unaware of the Citizens’ Income.
“Full employment never was achieved. Britain came close circa 1961, but as long as unemployment levels stayed well below those normal before the war, the Scroungers/Poverty Trap problem affected a small enough section of the workforce to be ignored by everyone else. But fast forward to 2009, by which time permanent full employment was no longer a credible aim. The Centre for Social Justice, which had been set up by Iain Duncan Smith, produced a report ‘Dynamic Benefits: towards welfare that works’. The first part of this report is a devastating, chapter and verse critique of exactly what Lady Rhys Williams said would happen. It would be intriguing to see how closely this part of Dynamic Benefits corresponded to the report Lady Rhys Williams was not allowed to write. At all events I could not fault this part of a report commissioned for, and adopted by Iain Duncan Smith, as a powerful statement of the Case for a Citizens’ or Basic Income.”[Quotes in here if you wish, Natalie] “Incredibly, Dynamic Benefits explains that the withdrawal of means tested benefits is in effect a tax. It even contains a series of graphs demonstrating the withdrawal of benefits a though it was a form of taxation.
“But the rest of Dynamic Benefits skilfully obfuscates the Citizens’ Income conclusion. I find it incredible that Iain Duncan Smith has been allowed to get away with this. Dynamic Benefits was after all intended as the bedrock of a future (in 2009) Conservative ‘welfare reform’ programme with an ‘anti-scrounger’ agenda. Scroungers would be invented as they did not actually exist in sufficient numbers. Dynamic Benefits introduced the Universal Credit. One of the kinder descriptions I have heard is ‘A Citizens’ Income with cattle prods’. The problem is Dynamic Benefits identifies means testing as a major problem, and Iain Duncan Smith was quite right to try to get rid of it. But not by removing benefits, draconian sanctions and forcing people, including the disabled, to work or starve. Incidentally, neither the Bedroom Tax nor ‘medical’ assessments by non-doctors are among the recommendations in Dynamic Benefits.
“There are two logical responses to the problem, as now detailed in Dynamic Benefits. The first, as observed by Aesop 3,000 years ago, is that persuasion is better than force. Simply allow people not to work, but make them better off if they do. Will they all down tools? Ask all your working friends if they would. There is the example of a town in Manitoba, Canada which had a ‘Mincome’ from 1974 to 1979. The only people who worked any less were wives with small children, and young adults with no responsibilities. But hey! At worst, we could always go back to Iain Duncan Smith’s by now somewhat blood spattered drawing board. The belief that the removal of means testing would encourage people to work less than they did is perverse. But even if Aesop was wrong, the Citizens’ Income has to be tried. Dynamic Benefits illustrates the simple principle that poor people were paying a higher proportion of their income in tax than the rich.
“But the compulsion route is not working, and could never work, no matter how clever IDS was. Remember, Lady Rhys Williams drew attention to a work disincentive which would only cause trouble if there was unemployment. Dynamic Benefits vindicates her convincingly. Yet Iain Duncan Smith is trying to use this evidence as the basis for a work compulsion strategy! The work disincentive was there from the start in 1945, but once Mrs. Thatcher had dismantled the post war consensus and reduced benefits in the 1980s, there was a much stronger incentive to be disabled, because it was more difficult to cut disablement benefits. Consequently, if you reject the ‘persuasion’ route in favour of cattle prods, you must also compel the disabled to compete with the able bodied in the jobs market, whether or not there are enough jobs to go round anyway, getting unqualified staff to carry out work capability assessments, because doctors would never disqualify enough people from receiving benefits.
“But although the Green Party is in favour of the Citizens’ Basic Income purely on the grounds of reducing inequality, let alone sheer humanity, that is not the main reason it has always been Party policy. The Party was formed in response to the MIT study Limits to Growth, which envisaged that what would in conventional economic terms look like a recession, might have to occur from time to time, and might even become the norm. A mechanism was needed which would allow the absence of growth to be viewed with equanimity by whole populations. There may be better ideas than the Citizens’ Basic Income, but in the 40 years since this became Green Party policy, no one has yet thought of one.
“The Citizens’ Basic Income per se is actually neutral in its effect on economic growth. Up to now, the absence of growth has always been an accident, to be avoided, but whenever it did happen, it must be reversed as quickly as possible. The Citizens’ Income simply allows a recession to be feasible, whether accidental or planned, so that it can be available in the repertoire of economic options.
“Although the Green Party welcomes the growing support for a Basic Income in Europe, and elsewhere world-wide, it would be unfortunate if, having performed the incredible feat of solving the age old problem of poverty, it did nothing to forestall the danger that the ability of the Earth to cope with economic activity is being exceeded. If that happened that first hard won achievement would be short lived. Even so, the referendum in Switzerland might benefit from this additional reason to support it.”
Of course, Natalie may have one or two ideas of her own.