A Citizens’ Basic Universal Income is necessary for three reasons: It will ameliorate any recession, and make a steady state economy – what enemies will call a recession – feasible if (the Green Party believes when) necessary to preserve the planet’s life support systems. Secondly, it will facilitate a rapprochement between workers and bosses. For example, under a regime of work compulsion, Zero hours contracts can be an obscene form of slavery. With the threat of benefit sanctions, the boss can dictate whatever terms he likes, but with a Basic Income when no one is forced to work, only mutually beneficial contracts can be offered.
But regardless of caring for the planet, or healing the divide between capitalists and workers, the Citizens’ Income is fair. From the point of view of the person in the benefits trap, losing a means tested benefit is exactly the same as a tax. This disguised tax is actually paid by everyone not receiving a means tested benefit. Our source for this is even more surprising that the fact itself: Dynamic Benefits: towards welfare that works, a briefing prepared in 2009 for Iain Duncan Smith by a Think Tank, which he set up, Centre for Social Justice. ‘Dynamic Benefits’ includes a series of graphs illustrating benefit withdrawal as though it was a real tax. This claw-back should not happen to those on incomes low enough to be in need of benefits.
The principle is simple enough: taxes are paid to public bodies; benefits are given by public bodies. Therefore, to the individual the withdrawal of benefits is a tax on the poor, and tax cuts are a benefit given to the rich.
Support for the Basic Income principle has been reported recently in the Financial Times from Silicon Valley. Even without taking the Earth’s physical limits into account, it is pointed out that in a future where automation is likely to become much more common, personal financial security can no longer depend reliably on conventional, full time employment.
Iain Duncan Smith and the Green Party are agreed that means testing is wrong in principle. His objection is that It creates a work disincentive, but for the Green Party it is a benefits trap. Therefore our methods of removing means testing are diametrically opposed. IDS is removing them by benefit sanctions, the bedroom tax, workfare and finding disabled people fit for work. The Green Party will give a Citizens’, Universal Income to everyone, and recover it through the tax system, so that everyone is on the same level playing field
‘Dynamic Benefits’ is not to blame for any of the above government policies. Its central proposal was the Universal Credit. We can recommend the graphs, and the text of the first chapters as an excellent statement of the case for a full Universal Income. But the UC has not happened. Quite apart from its parsimoniousness and the mismanagement, it was never realistic in harness with work compulsion.
Some critics have drawn attention to the cost of a Universal Income. It will be introduced in two stages. The first phase, a blueprint of what could be explored during the forthcoming Parliament, is set out in a sister document. A Citizens’ Income at , or possibly slightly higher than Jobseekers allowance will be paid to everybody, and this will be paid for by an appropriate rearrangement of ‘real’ tax rates so that the claw-back is shifted from those losing means tested benefits to those with higher earnings. At this stage the increase in taxes on the better off will be modest.
However, this scheme will leave Housing Benefit means tested, so that those who continue to need help with the costs of their rent will continue to suffer from this oppressive claw-back from their income. The Green Party believes that once the public has seen that the Citizens’ Income at JSA levels is much fairer than the present, means tested system, as well as creating a work incentive, their sense of fair play will ensure that they accept that all means tested benefits should cease, whatever the cost to those on higher incomes.
That is for the future, but it is important now as the beginning of a vital cultural shift. Although the Citizens’ Income will be a practical policy, and will quite rightly be scrutinised in detail, at this stage it is important to see it as the foundation for a vision of a less competitive, sustainable future, where the work disincentive is removed, but financial security can no longer rely on employment. The second world war forged a national consensus which would have been impossible at any previous epoch. By the 1970s British society was less unequal than it had ever been. Mrs. Thatcher began to dismantle that consensus, and ever since inequality has widened, regardless of who was in power.
The Green Party therefore takes the bold step of inviting the better off to pay more in taxes, What they will get for their money is a better prospect of a sustainable future for their grandchildren, but in the here and now what is needed is a return to that sense of one nation envisaged by Harold Macmillan.
The Green Party’s twin pillars for most of its 42 year existence have been sustainability and social justice, so from a conventional perspective it is unavoidably ‘left of centre’, and its recruitment has been largely from the ‘left’. Nevertheless, although the Conservative Party of the last 40 years has been lacking in any social justice element, that was present under Macmillan’s earlier leadership. The Citizens’ Income need only take from those with higher than average incomes what is necessary to ensure a sustainable future, and for every individual to have the basic requirements for a civilized life. Any individual with ability will be able to use that as a springboard for achievement.
Many within the Green movement see capitalism as the central problem, and it does pose threats to the global environment as never before, as well as widening inequality. The Citizens’ Income can be viewed either as the first phase of the assault on capitalism, or as an important amelioration of it. Philippe van Parijs, a leading proponent of the Basic Income, has described it as “A capitalist road to Communism”. A reconciliation between the outdated ‘left’ and ‘right’ is possible, and it is now necessary.
As yet, the universal principle is unfamiliar to most, so it is necessary to explain and reassure that apparent concerns are groundless, or can be met. At this stage it is primarily a though experiment. The practical application, and the precise costing can come once the system is widely understood. But once it is, all kinds of benefits will come into play; entrepreneurs will be able to start a business, and possibly take on employees during that crucial early phase, with all of them working together for low or even no pay to try to make the enterprise work. This cannot happen at present. Any small business with abrupt changes in income can use the Citizens’ Income as a piggy bank: good times, they pay more tax; bad times, the CI is a lifeline. The CI will facilitate part time or intermittent work availability.
The principle underlying the Citizens’ Income, basic needs unconditionally, but unless there are special reasons, normally nothing else, needs to be the basis for relations between states as well as between individuals. There is a world wide movement, the Basic Income Earth Network (BIEN); and a European movement for a Guaranteed income, which gained 285,000 signatures in 2014, and Switzerland will hold a referendum this year. Should Greece be treated as was Germany in 1945, or would that set too dangerous a precedent? If Greece were to receive a block subvention from the richer EU states, and this was given to individual Greeks, the option that Greece should be shown no mercy would become less appalling than it is. Philippe van Parijs, a leading advocate of the basic income principle, has outlined a scheme appropriate for Greece, and for Europe. In a similar vein, Barack Obama has pointed out that rich nations must accept that they are magnets for immigrants. If Bulgaria and Romania were to be treated similarly, that would enable them to build a self-sufficient economy and reduce the pressures to emigrate. The death toll among would-be immigrants illustrates that the ‘magnet’ effect makes the problem too great to police anyway. Quotas which may work in Australia are unrealistic across the Channel.
There is one nation which at present has a guaranteed income: Iran. It was instituted there because a means tested system to deal with a rise in food prices collapsed.
Aesop observed 4,000 years ago that persuasion is better than force. The purpose of ‘Dynamic Benefits’ was to explore, on Iain Duncan Smiths’ behalf, ways to remove the work disincentive caused by means testing. The despicable strategy of work compulsion, including finding the long term disabled fit for work, was never rational against a background of widespread unemployment. It must be got rid of. But the Citizens, Universal Income can and will achieve what the Universal Credit never could.
This was originally posted as a suggestion to the team drafting the Green Party Manifesto. The Basic Income is there, tucked away in Social Welfare, but it underpins so much more of the Green vision. The foregoing is quite consistent with the Manifesto which has just been published, apart from Zero Hours contracts. This difference highlights that it is so much more than a ‘Social Welfare’ policy. On the one hand, talk of how much more should be cut from the welfare budget appear to make sense as long as means testing remains. But although less inequality and saving the planet for future generations will mean higher taxes for the better off, the Basic, Universal Income could enable the Green Party to appeal to traditional ‘right of centre’ voters because it allows many ideas to make sense which are oppressive at present. Zero hours contracts is just a topical example. The Green Party should not be perceived as taking votes only from one side.