£10,000 proposed for everyone under 55

chockydavid1983

Interesting, I hadn't thought of the state pension like that before.
I guess some people carry on working beyond SP age so that may be an argument against UBI dis-incentivising work. Depends how common it is a percentage though- many on here, myself included, would like to retire earlier.

Malthusian

chockydavid1983 wrote: »

I guess some people carry on working beyond SP age so that may be an argument against UBI dis-incentivising work.

Given that our late-middle-age UBI is in theory meant to kick in when you aren't physically capable of working (although of course this happens at different times for different people), the existence of anyone who works beyond SP age is a good argument against UBI dis-incentivising work.

Incidentally, to address the question raised in the OP, the NHS is irrelevant to this discussion. The NHS aims to be a free quality universal healthcare service; that means we can never afford it. We could divert every single penny the State earns into the NHS and demand would still exceed supply and the NHS would still need more money.

Let us imagine that in 2018/19 we introduce a new tax to pay for an extra £20 billion to solve all the NHS' funding problems, with the idea that in 2019/20, with the NHS now fully paid for, we can see whether we have enough money left over for UBI. What would happen is that waiting lists would reduce, hospitals would become cleaner and safer, and time to see your GP would drop dramatically. For a few weeks.

More people would go to the hospital or their GP instead of waiting for their pain to go away, more people would cancel their private medical insurance and rely on the NHS, more people would survive their illness and develop a more complicated and expensive problem later in life, more elderly expats would return home for free care, more people would guzzle Coke and crisps knowing that the NHS will sort them out. Waiting lists and GP appointment queues would increase until they returned to equilibrium, and the NHS would need another £20 billion.

We have been down this road (under Gordon Brown), we know exactly where it leads.

If the argument is "we can't have UBI until we have enough money for the NHS" that means we can't spend money on anything that isn't the NHS ever, as we will never have enough money for the NHS.

UBI would in any case largely pay for itself due to a) the end of the 90% low-income tax trap, the billions of pounds of dead weight loss recovered by the economy, and the resulting extra tax b) tens of thousands of redundancies in the DWP and HMRC (and Atos and other unproductive jobs).

Arthurian

What's proposed is supposed to last only 2 years, to give people a chance to retrain or invest in tools to set up a little business for themselves. Much like the BBC programme "The Big Benefits Handout."

kangoora

Have any of these people thought about what this would do to the part-time economy, particularly those who aren't claiming benefits but working part-time for extra wages.

At a stroke a legion of part-time carers, cleaners, bar staff, shop assistants, hotel workers, seasonal workers etc are likely to just walk out of work. Why would they bother going to work for their part-time minimum wages when the government would be giving them £10k/year for doing nothing. The majority of people in these roles aren't working because they enjoy it, they're doing it because they either need extra cash (or want the extra cash).

Yes, there would be a percentage of them who continue to work for extra cash anyway but to my mind that would be a lot lower than people think. In our early years of marriage my wife did a few of those jobs before she went back to school and got some accountancy qualifications and I can guarantee she would have dropped them like a stone if the government gave her £10k a year for doing nothing (we didn't qualify for any benefits due to my wage).

Anyone earning under, say, £12k (maybe more) in a part-time role, a year would be extremely unlikely to ever want to work if they are comfortable with the £10k tax and NI free - millions of people in this country work because they have to, not because they enjoy it.

Wage inflation, you would have to pay a part-time unskilled worker a large salary (relatively) for it to be 'worth them getting out of bed for'. This would have a massive knock on effect on more (lower paid) skilled jobs with most of them wanting, probably, 100% pay rises otherwise they might as well go and get a job cleaning somewhere.

You also have the situation where a couple have a joint income of £20k for doing NOTHING, not even having to register for benefits and prove they are jobsearching. Plenty of people with a joint income of £20k (untaxable) would also be happy to not work at all especially if they still qualify for some extra benefits (child benefit at £1800 for two kids springs to mind). They are now at £1,800 (with CB) per month tax free between them whilst sat at home watching daytime TV (ok, you'd have to pay me to do that also )

I think they are completely underestimating how many couples would happily sit at home whilst getting £20k+/year for doing nowt.

Finally, it's been touched on before, surely they'd have to raise pensions to match the £10k 'wage'?

I don't see how this could be funded without massive tax increases, it sounds like utter madness to me.

The people who wrote this proposal aren't just living in an ivory tower, they're living in an ivory tower in an ivory suburb of an ivory city somewhere in la-la land.

DrEskimo

kangoora wrote: »

I think they are completely underestimating how many couples would happily sit at home whilst getting £20k+/year for doing nowt.

Based on what....?

It's already been touched on how the current benefit system does more to dissuade people from getting part time work, because any small increase in wages can completely cut them off from large amounts of benefits, making them worse off overall despite the fact they are working. The so called 'poverty trap' or 'unemployment trap'.

A UBI eradicates this issue because any income above the £10k is additional.

The question is, what are the issues with the current system and can UBI improve it?

Malthusian

Arthurian wrote: »

What's proposed is supposed to last only 2 years, to give people a chance to retrain or invest in tools to set up a little business for themselves. Much like the BBC programme "The Big Benefits Handout."

Just gets dafter and dafter. What happens when automation makes their new occupation or little business obsolete as well?

kangoora wrote:

At a stroke a legion of part-time carers, cleaners, bar staff, shop assistants, hotel workers, seasonal workers etc are likely to just walk out of work.

Why don't they walk out of work now and live on benefits when they would only suffer a 10% drop in income by doing so?

They would be far less likely to walk out of work under UBI because they could keep all their income from working, whereas currently low earners are effectively taxed at up to 90% once removal of benefits is taken into account.

I think they are completely underestimating how many couples would happily sit at home whilst getting £20k+/year for doing nowt.

The same or fewer than the number of couples who currently sit at home while getting £20k+/year for doing nowt under the existing benefits system.

That said, £10,000 / year is too much IMO. The starting point should be somewhere between what a single unemployed person is currently entitled to and the current State Pension of £8,000 a year.

ValiantSon

kangoora wrote: »

Have any of these people thought about what this would do to the part-time economy, particularly those who aren't claiming benefits but working part-time for extra wages.

At a stroke a legion of part-time carers, cleaners, bar staff, shop assistants, hotel workers, seasonal workers etc are likely to just walk out of work. Why would they bother going to work for their part-time minimum wages when the government would be giving them £10k/year for doing nothing. The majority of people in these roles aren't working because they enjoy it, they're doing it because they either need extra cash (or want the extra cash).

And continuing to do those jobs would still give them extra cash.

kangoora wrote: »

Yes, there would be a percentage of them who continue to work for extra cash anyway but to my mind that would be a lot lower than people think. In our early years of marriage my wife did a few of those jobs before she went back to school and got some accountancy qualifications and I can guarantee she would have dropped them like a stone if the government gave her £10k a year for doing nothing (we didn't qualify for any benefits due to my wage).

One individual's experience and view is not an analogue of everyone's.

kangoora wrote: »

Anyone earning under, say, £12k (maybe more) in a part-time role, a year would be extremely unlikely to ever want to work if they are comfortable with the £10k tax and NI free - millions of people in this country work because they have to, not because they enjoy it.

£10,000 per annum is not a lot of money. I would be very surprised if the majority of people were satisfied to live on that. It doesn't give them much opportunity for life's luxuries, or holidays etc.

Furthermore, the figure wouldn't necessarily be £10,000. It is quite possible that a UBI would be set at the same level as the state pension, i.e. just shy of £8,300 p.a. That is even less enticing as a figure to live on and, I would expect, the majority of people would opt to work in addition to that.

kangoora wrote: »

Wage inflation, you would have to pay a part-time unskilled worker a large salary (relatively) for it to be 'worth them getting out of bed for'. This would have a massive knock on effect on more (lower paid) skilled jobs with most of them wanting, probably, 100% pay rises otherwise they might as well go and get a job cleaning somewhere.

I very much doubt it. See my comments above.

kangoora wrote: »

You also have the situation where a couple have a joint income of £20k for doing NOTHING, not even having to register for benefits and prove they are jobsearching. Plenty of people with a joint income of £20k (untaxable) would also be happy to not work at all especially if they still qualify for some extra benefits (child benefit at £1800 for two kids springs to mind). They are now at £1,800 (with CB) per month tax free between them whilst sat at home watching daytime TV (ok, you'd have to pay me to do that also )

There wouldn't be any other benefits. The whole idea with UBI is that it replaces the benefits system.

kangoora wrote: »

I think they are completely underestimating how many couples would happily sit at home whilst getting £20k+/year for doing nowt.

Funny, because I think you are grossly overestimating how many people would.

kangoora wrote: »

Finally, it's been touched on before, surely they'd have to raise pensions to match the £10k 'wage'?

No, why should this necessarily be the case? More to the point, however, is that a properly instituted UBI would replace all other benefits, so there wouldn't be a state pension anymore; you would receive UBI throughout your adult life.

kangoora wrote: »

I don't see how this could be funded without massive tax increases, it sounds like utter madness to me.

UBI would reduce expenditure on the administration of benefits, creating a huge saving. There has been a lot of work done which suggests that at the very least it is actually a cost neutral exercise.

kangoora wrote: »

The people who wrote this proposal aren't just living in an ivory tower, they're living in an ivory tower in an ivory suburb of an ivory city somewhere in la-la land.

The report is flawed because it doesn't actually go far enough in recommending a proper UBI.

pimento

TBC15 wrote: »

Who says there will be any over 55s in this brave new world.

Soylent Green, anyone?

Eco_Miser

kangoora wrote: »

Why would they bother going to work for their part-time minimum wages when the government would be giving them £10k/year for doing nothing.

The £10,000 in the headline is £5000 a year, for just two years, in lieu of other benefits, while the recipient retrains and/or starts a small business.
Not £10k a year for doing nothing.