Basic Income: Problem, or key to a Green, fair future?

This is what I hope to say in an emergency motion to the Green Party conference next weekend. The Basic Income is being described as ill thought out in the media. I have 3 minutes to explain why on the contrary it is a keystone Green policy.

There are three reasons, but two of them can stay on the back burner for now. The need perceived when the Party was formed was for something which would allow a steady state economy – what will be described as a recession – to be bearable for whole populations so that we can stop trashing the planet through indiscriminate economic growth. The second non-urgent reason is to allow former socialists and former conservatives to make friends, but neither side is ready for that yet.

But the third reason is to remove the benefits trap, the work disincentive caused by the withdrawal of means tested benefits. This is a permanent problem with means testing, but it becomes acute in times of recession. The recession we expected due to unsustainable growth has happened anyway courtesy of the bankers.

The Basic Income is an essential part of the answer to austerity.

The purpose of the Universal Credit was to make work pay. But that is exactly what the Basic Income does. I have been trying to tell anyone who will listen that the report which recommended the Universal Credit is actually an excellent statement of the case for a Basic Income. Every time the phantom Universal Credit gets a bit more adverse publicity, or any publicity at all, should be another opportunity for the Green Party to showcase the Basic Income with the slogan ‘Persuasion is better than force’.

But what will it cost? Demanding figures first is putting the cart before the horse. Read ‘Dynamic Benefits’, the report which  first mentioned the Universal Credit for an explanation of why the Basic Income is needed. The Citizens’ Income Trust scheme, which is the template for ours, would be quite modest in its demands on the taxpayer. But the Basic Income is redistributive. It is fair where means testing is unjust. It will reduce inequality. To that extent it will cost the better off something.

But won’t some low income families be worse off? Tax Credits do help some, so they may have to be retained in the early stages of introducing a Basic Income. Messy, but not an insuperable problem.

I can’t explain here all the ways in which a Basic Income will start to usher in a fairer, less competitive society, where everyone is secure, but better off working than not working. There is an international Basic Income movement which is gathering momentum. Automation is making it urgent. Please, it is a fundamental part of the Green vision.

– – – – –

Below is the draft text of my intended emergency motion:

Restoring the credibility of the Basic Income

On 28th January the Guardian published a damaging report that the Green Party’s Citizens’ , or Basic Income would make many low paid families worse off. Malcolm Torry, who was quoted in the Guardian as criticising the Green Party scheme, issued an immediate correction on the Citizens’ Income Trust website pointing out that the Green Party scheme was not yet published, and that the effect of the CIT scheme, on which the Green Party’s scheme was to be based, would be less serious than had been implied, and would be mostly transient.

Whilst as stated in the Guardian, Tax Credits do alleviate some effects of the withdrawal of means tested benefits, that is still a serious enough problem for Iain Duncan Smith to successfully peddle myths about benefit claimants which are true only of the tiny minority who do respond rationally to the benefits trap. The Universal Credit was intended to make working better financially than being on benefits, but even without gross mismanagement it was doomed to fail for two reasons: it is a mean spirited partial solution, with a claw-back rate of 65%, which is an effective tax rate higher than that imposed on bankers’ bonuses, and it is linked to a regime of compulsion.

The Report which recommended the Universal credit (with a claw-back rate of ‘only’ 55%) unwittingly includes an excellent statement of the case for a Universal Income, in other words, the Green Party’s Basic Income, one purpose of which is exactly the same, the removal of the benefits trap and making work pay. But that would require the courage to follow Aesop’s 4,000 year old advice that persuasion is better than force.

A new, compelling reason for a Basic income has emerged. The Financial Times has recently reported that automation is spreading in Asia, and that a consensus is emerging in Silicon Valley that even without taking the Earth’s physical limits into account an unconditional income guarantee is essential 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.

Conference instructs the media team to brief themselves adequately on the Basic income, and urges all party members to use the foregoing to give the media a more positive image of the Citizens’ Basic Income than it has received from publicity to date, and Conference also recommends that the General Election manifesto includes a reference to automation.

Advertisements

6 responses to “Basic Income: Problem, or key to a Green, fair future?

  1. The CI is crucial and I hope your motion focuses some minds.
    I do think it’s important to be clear on figures though, to give a solid impression that the policy has been clearly thought through to avoid discussion of the principles being derailed by ‘but what will it cost? you have to be realistic.’ comments, and avoid the CI policy being cheaply disissed as pie in the sky idealism.

    Is it possible for the Greens to collaborate more with the Citizens Income Trust and the people who did the Euromod models to find a range of implementations that doesn’t further impoverish the impoverished? Keeping tax credits is of couse one option, but as you say it’s not ideal and having some choices with figures of financial impact on each decile would be useful. So they could run the simulation for say £80 and £90 pw basic rate as well, using higher levels of income tax for the top bands.

    There is an argument that higher top rates of income tax would depress employment and the health of an economy, but historically this is completely false as the highest sustained growth over the 20th c happened over the period where the top band of income tax was between 70 and 98%. (Yes ultimately we need to move to zero growth, but that wont start to be an economic reality until wealth distribution is substantially more even).

    (In further CIT studies could be worthwhile factoring in cost savings from reducing the opportunity and health costs to the economy of having people live in poverty, as a CI would do.)

    • Thank you Joe. There is a team working on the miniutiae. If I understand Brian Heatley (producing the actual figures) there is no question of doing anything in time to put in the manifesto to deal with the ‘Euromod’ revelations. The general answer will be we would love to work with Euromod. I don’t know who has access to it, and a what cost. I am under thw inmpression that even the CI Trust were unaware of the ‘Tax Credit’ calculation when they published their figures in 2013, even though I was aware of them way back in 2009 through somebody who works at what was then called Polimod. It occurs to me you migh be appropriate member of the detailed figures team.
      The team is working closely with the CIt. Malcolm Torry is quite upset at the twisting on the Patrick wintour Guardian article, after an apparently friendly phone conversation giving no hint of the eventual drift. I am tearing my hair out at the press office’s failure to report Malcolm’s rebuttal. They are so anxious to get the Basic income back in the long grass, that what should have been a big opportunity to give the policy more media coverage, has instead left any of the public aware of the scheme with the impression that the policy is half baked, and a Party which puts it forward must be stupid.
      I have a copy of a book ‘The Sceptical Economist’ which argues, cogently for me, that the fairest tax/benefit arrangement is a generous Basic Income (circa £200pw) with a flat tax.
      How you get from here to there politically is another matter.

      • Hi Clive,
        If there’s a way I can help the figures team I’d be very glad to. Please feel free to put me in touch with the right people. (Also, do you which people are briefing Natalie Bennett?)
        I’ve just sent Malcolm an email about the CI modeling.
        While the rebuttal aught to have been picked up, it still admits some of the poorest would likely have to work harder for what they already get with the existing benefits system, with that £71 figure for CI. I think that’s the isssue (which I mentioned in my email).
        £200pw seems about the level to me that would see the revolutionary potential of CI start to flower. To start with though just setting the CI so all means tested benefits apart from housing benefit (or disability living allowance) can be removed, and none of the poorest are penalized (say around £85 pw, then tracking inflation?) I think would be enough to get CI off to a good start. That small addition of freedom and opportunity that millions would have would bare fruit for everyone, which would generate stronger backing for increasing the CI.

      • I am out of the loop. Natalie did say she read my blog, but she has too much dviding her attention. I have no contact with the press team at all. I am intending to write a post before I go to conference, which will offer to brief her and them. Can you come to conference?

  2. Clive, I have been a member of the Green Party for over 20 years but it’s only in the last 3 years that I have been increasingly interested in economics. My view is that we need radical change with a CI at the heart. The biggest practical problem is how to finance it. The CI Trust works only with existing taxation and is therefore very limited in scope. I believe further funding could be raised from a Land Value Tax and monetary reform (along the lines of, for eg, Positive Money), both of which are desirable in their own right.
    I am in complete agreement with your proposed emergency motion and your reasons for it. I will give you all the support I can. I will be at conferance on Sat. 7th from about 9am. In the meantime, if you wish to contact me directly, you can get me on:
    graham46reid@gmail.com

    • The technology has just baffled me. A reply to Graham Reid I was drafting just disappeared. I don’t know whether it went or just disappeared. An reply will appear either as part of the ‘Eelction Briefings’ page or a new post.
      however, a comment on what happened to my emergency motion on Sunday at conference. I though out a coherent answer overnight. My motion as that the Basic Income ought to be a prime part of our anti-austerity case, but due to the prss teams failure to use the Cits Incoem Trust rebuttal of the Guardian attack, it was instead a millstone round our neck. that even Rachel Reeves didn’t understand meant that this failure was excusable. The humiliation castigated by Adam Ramsay was in that lapse, and all I was asking for was that it should be corrected in time for the election campaign.
      But whilst I achieved the object of getting the BI higher in the consciousness of a lot of new members, they got the same dismal impression that the public have. I find it difficult to accuse someone as sharp witted as Adam as not intending the consequences of his actions.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s