Caroline in Parliament on Basic Income

I am aware how hard it must be for Caroline Lucas to ‘come out’ on the Citizens’ Basic Income. Even before she entered Parliament she admitted privately how important it is. But both she and Natalie Bennett have been caught unawares on TV, having thoroughly briefed themselves on other issues. So her decision to go public now, and to introduce a debate in Parliament is extremely courageous. Here is a draft of a possible speech

_ _  _  _  _

“In the game of chess, a gambit is an apparent sacrifice which instead produces an advantage to the player. The Citizens’, or Basic Income is such a gambit. At first sight, it will cost better off hard working  taxpayers  several billions, and all it say to scroungers on the Dole is “OK, we shall stop hounding you. You are free to do nothing from leaving school to the grave . Here is enough money every week to cover all your basic needs”

“But Mr. Speaker, I refer you to a rather surprising source for the case for a Basic income: ‘Dynamic Benefits: towards welfare that works’. This is the report published in September 2009 by the Centre for Social Justice for Iain Duncan Smith which recommended the Universal Credit as a key part of the reform of the benefits system. Dynamic Benefits does not of course mention the Basic income, but it is nevertheless an excellent exposé of the effect of

Means Testing

“It shows, with several graphs, the effect of means testing as though it was a form of taxation, which it is for anyone losing a means tested benefit. I shall return later to the fact that the Universal Credit is still mythical for the vast majority who should qualify [get up to date figures], but for now, let us consider its effect as if it were a reality. It allows former claimants to retain 35% of their benefits when they find employment. (In passing, ‘Dynamic Benefits’ recommended 45%). But 35% means that there is a claw-back , that is to say a tax equivalent rate of 65%. Bankers only lose 45 % of their bonuses in tax.

“Mr. Speaker, the poverty trap created by means testing cannot be removed on the cheap, which is what the Universal Credit will try to do if rather than when it is rolled out. Tax Credits cost £30 billion because they do to some extent alleviate the poverty trap for those on low wages. But Tax Credits are unnecessarily bureaucratic, with rules about working 16 or 30 hours per week, but above all, they are nowhere near as comprehensive as a real ‘make work pay’ regime needs to be.

[There is scope here for material on the details of the benefit sanctions regime, but it may be used later]

“A simple ‘anti austerity’ message is not enough. If the demand is simply to put the clock back to 2010, leaving means testing in place, then benefit caps, cuts and sanctions, the Bedroom Tax and even work Capability Assessments will appear to make sense to large numbers of people in the context of limited economic growth. The original reason the Green Party adopted a Citizens’ Basic Income was a response to the MIT study ‘Limits to Growth’ which warned that indiscriminate economic growth could not continue indefinitely on a finite planet. ‘Limits’ correctly predicted that various forms of pollution would inhibit growth before  resource constraints, but that is merely one more factor causing  recessions, which happen for all kinds of reasons anyway. So in 1973 the newly formed Green Party adopted the Basic income as a measure which would alleviate the worst effects of any recession for whole populations, but would allow a recession to be an actual policy option where growth was dangerous. Hydraulic fracturing is an example of this danger. It pushes the problem of resource limits into the distant future, but not pollution. If we are to avoid climate change, the hydrocarbons must stay where they are, even if that means no growth. So the Green Party has from its inception been the natural ‘anti-austerity’ party.

“I shall not go into details of the wider significance of a basic income, but it does have world-wide ramifications. There is an international movement – Basic Income Earth Network. There are many countries where some form of a Basic income could be important in persuading people not to migrate. It may even prove cheaper for rich nations to pay a little towards that instead of draconian attempts to keep desperate boatloads out. Once the principle is seen to work it will become widespread. Eventually, even in countries from which refugees are fleeing for more pressing reasons it will be seen as a saner solution than warfare, or an Islamic state, but that will take time.

“The Basic income will be redistributive, drastically redistributive. I make no bones about that. But I refer anyone who says it is ‘unaffordable’ to those  graphs in ‘Dynamic Benefits’ – Iain Duncan Smith’s own literature – showing those losing benefits as losing a greater portion of their income than bankers. This is why it is wrong to start by looking at the cost first. We shall look at different schemes, but every one of them will be preferable to this  government’s workfare and benefit  sanctions regime, supposedly underpinned by the Universal Credit.

[Material re benefit sanctions could be used here]

“Mr. Speaker, there are only three possible categories: no benefits at all; means tested benefits; or a Basic income. Making benefits conditional, for example on doing forced work or proving disability, does not escape this: the money still has to be found.  Anyone opposed to the principle of a Basic income must make clear which of the other two possibilities they are defending. Bearing in mind that this government’s own literature demonstrates the monstrous injustice of means testing, does it really wish to defend giving no benefits at all?

“Oddly enough, although the Basic Income is indeed drastically redistributive, it has a surprising number of ‘neo-liberal’ supporters, of whom Milton Friedman was one of the more prominent. Why? The Basic income allows market forces – a neo liberal concept – to make sense where they are oppressive without it. Think of Zero hours contracts, where instead of being threatened with going to the food bank if he refuses, she or he is free not to accept it – the principle is persuasion not force.

“Mr Speaker, I am too young to remember the American musical hit ‘Oklahoma’ but one of its popular songs was ‘The farmer and the cowhand should be friends’. They will be, once we have a Basic Income.”



2 responses to “Caroline in Parliament on Basic Income

  1. While Clive I think basic income is a good idea, I can see that there is a critique of it that is valid. From a certain work ethic (several may do: Confucian, Protestant etc.) there is a predication that there is work available and someone who wants to work. So those that do not want to work or when there is not work available for those it becomes the ONLY income.

    Many people will have a problem with that. However from a purely selfish point of view of those who are contributing and never fall into the permanent/ chronic workless (I do not say work shy and do not differentiate those forced to this predicament from those choosing it), there still may be an advantage. Reduced crime and mental health treatments and possibly a better society in some other metrics of sustainability. It would be interesting to see how the figures stack up when these are computed in.

    I was struck by this thought after the experiments on not walking tube lines in Holborn station – maybe this is better for all collectively EVEN if an individual can no longer get ahead… Perhaps this perspective could be better articulated and investigated?

    • There is a paradox. Means testing only becomes a serious problem when there is serious unemployment, leading to draconian sanctions just when they are least appropriate. This is because for whatever reasons, the vast majority do want to contribute to society in some way. The apparent philosophical objections fail to take this into account. The ‘Minincom’ scheme in Dauphin, Manitoba (1974-79) demonstrated that only women with small children, and young adults who have not yet taken on family responsibilities, worked less than before. Mind you, even I would advocate a very cautious approach to introducing a BI in e.g. Bangladesh, where vast numbers of street kids subsist on nothing but entrepreneurial initiatives.

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