Green Party and the Citizens' Income

onlyroz

Can some of you clever people explain to me whether the Green Party's policy of a "Citizens' Income" would be a good or bad thing for the economy?

EC730 A Citizen's Income sufficient to cover an individual's basic needs will be introduced, which will replace tax-free allowances and most social security benefits (see EC711). A Citizen's Income is an unconditional, non-withdrawable income payable to each individual as a right of citizenship. It will not be subject to means testing and there will be no requirement to be either working or actively seeking work.

EC731 The Citizens' Income will eliminate the unemployment and poverty traps, as well as acting as a safety net to enable people to choose their own types and patterns of work (See EC400). The Citizens' Income scheme will thus enable the welfare state to develop towards a welfare community, engaging people in personally satisfying and socially useful work.

EC732 When the Citizens' Income is introduced it is intended that nobody will be in a position that they will receive less through the scheme than they were entitled to under the previous benefits system. Children will be entitled to a reduced amount which will be payable to a parent or legal guardian. People with disabilities or special needs, and single parents will receive a supplement.

EC733 Initially, the housing benefit system will remain in place alongside the Citizens' Income and will be extended to cover contributions towards mortgage repayments (see HO602). This will subsequently be reviewed to establish how housing benefit could be incorporated into the Citizen's Income, taking into account the differences in housing costs between different parts of the country and different types of housing.

CLAPTON

it is based on the green assumption that money grows on trees and that a relaxed family style life is better than actually producing foods, clothing, medical services, fuel, energy, cars etc.


it will have no effect on the country as it just won't happen

onlyroz

Well I can see how it would reduce a lot of "red tape" - no need for complex calculations over how much in benefits you're entitled to, no benefit claims to process. Just one payment to cover unemployment, disability, maternity, pension etc etc. Minimal paperwork required.

Generali

The obvious problem would be that if you automatically pay people enough that they don't have to work then you may well find that they sit about all day. I would.

You are then faced with the problem of who is going to pay for me to sit on my Aris' for the rest of my days.

onlyroz

Generali wrote: »

The obvious problem would be that if you automatically pay people enough that they don't have to work then you may well find that they sit about all day. I would.

But at the moment we have the situation where benefits are withdrawn as soon as employment is found - thus reducing the incentive to find work. With a basic citizens' income you know that getting a job will always improve your financial situation.

Studies in India suggest that it can increase productivity.

http://www.theguardian.com/society/2014/apr/08/citizens-income-instead-of-benefits

Masomnia

If it was set low enough that you could barely survive, I think it could have merit.

Thing is though, I'd scrap every benefit other than disability benefits if it was introduced.

You could scrap the state pension, you could scrap student maintenance loans, probably lots of other things too.

You could use it to massively shrink the size of the state, but I don't think that's what Greens have in mind

onlyroz

I'm trying to find links to the exact figure they propose but from something I was reading last week I think they're suggesting about £7k a year, plus the removal of the personal allowance, plus the scrapping of most benefits. Pensioners and the disabled would be paid more.

antrobus

At various times in the recent past, various people have developed an enthusiasm for Citizens Income. The Heath government kicked the idea about; it was Liberal Party policy for a time. There are obvious attractions in terms of reducing government spending on administration. (Unless of course, you're employed by the DWP, in which case you'd think it was a very bad idea.) As well as making life simpler for everyone.

It does however from one big drawback. Roughly speaking, there are 40 million people of working age in the UK; 30 million are taxpayers, 5 million are on benefits, and 5 million are on neither. Irrespective of whether or not it's a good idea for the government to start handing out money to all those students and housewives etc, the cost of doing so will fall on the aforementioned taxpayers.

A quick bit of arithmetic such as £70 per week for 52 weeks for 5 million people gives a total of £18.2 billion. Which would require an increase in the basic rate of income tax of about 4%. (And that's before you start getting all UKIP about things and worrying about whether all those Romulans will be flocking to these shores.)

Generali

onlyroz wrote: »

But at the moment we have the situation where benefits are withdrawn as soon as employment is found - thus reducing the incentive to find work. With a basic citizens' income you know that getting a job will always improve your financial situation.

Studies in India suggest that it can increase productivity.

http://www.theguardian.com/society/2014/apr/08/citizens-income-instead-of-benefits

I'd like to see the actual study as I suspect that what is considered a subsitance wage in Uttar Pradesh is very different to that for Chipping Sodbury.

Yes, if you introduce a basic level of nutrition in an area where people are so poor they can't afford the lentils with rice that most Indians eat every day that they eat then you'll get an increase in the ability to work. The basic physical ability to work isn't the problem in the UK.

antrobus

onlyroz wrote: »

I'm trying to find links to the exact figure they propose but from something I was reading last week I think they're suggesting about £7k a year,...

£7k a year would cost more like £36 billion. That would mean a basic rate of income tax of 28%.

It's that kind of math that persuaded the Liberal Party to drop the idea.

bugslet

onlyroz wrote: »

But at the moment we have the situation where benefits are withdrawn as soon as employment is found - thus reducing the incentive to find work. With a basic citizens' income you know that getting a job will always improve your financial situation.

Studies in India suggest that it can increase productivity.

http://www.theguardian.com/society/2014/apr/08/citizens-income-instead-of-benefits

I left school in '82, had a brief spell of unemployment in '85 for 10 weeks and drew dole. At no point did I feel disincentivised by the withdrawal of dole money merely because I found gainful employment.