The idea is behind replacing the entire welfare system (including, with a Citizen's Income-style welfare system is rabid simplification. The only hurdle would be being a legally resident citizen (the clue is in the name). We can argue hotly over how long foreigners would have to have lived here before they qualify, but once a decision has been taken, we can see how things pan out and then lengthen or shorten the waiting period. The administration costs would be next to nothing, of course, as with Child Benefit (not to be confused with Child Tax Credits!).
I spotted three stories this week which illustrate what happens when you deviate from the Path Of True Simplification-ness:
Story One: The government is urging anyone who voluntarily cares for a friend or relative for more than 20 hours a week to take advantage of a new scheme to build up their state pension entitlement. It says up to 4.7 million people could benefit from the Carer's Credit, which launches in April.
What's the point of that, then? If your contributions record is patchy you might not qualify for the full Basic State Pension (currently £95.25 per week), so if you're caring for somebody (heck knows how they will police this) then superficially you'd think this is a good thing. Only it isn't, because however much basic state pension you get (assuming you have no savings when you retire), you are still entitled to the Pensions Credit, which 'tops up' your income to £130 a week. Sure, there will be marginal situations where filling in all the forms to get the extra Carer's Credit will be beneficial to you, but by and large, this is a shameless gimmick.
How about being honest about it, and having a flat-rate Citizen's Pension of £130 a week for men and women over age 65 (or whatever amount and age you pluck out of the air. Sure there will have to be transitional measures for those whose existing taxpayer funded pension entitlement exceeds this amount, that's just details) and have done with it?
Story Two: Draft legislation has been passed by a committee of the European Parliament to extend maternity leave across Europe to 20 weeks on full pay. Current European rules give women 14 weeks leave fully paid. In the UK, women get a year off, with the first six weeks on 90% pay, followed by 33 weeks on Statutory Maternity Pay. The rest is unpaid.
The 20-week proposals will now go before the full European Parliament in early March. There are concerns that employers could discriminate against women of a child-bearing age if the rules are passed...
Again, why push the hassle and expense of all this onto employers (who in turn will be wary about employing young women and/or offer them lower salaries, thus being in trouble for breaching equal pay legislation)? The only reason I can think of is that large employers, with hundreds or thousands of employees can cope perfectly well if at any time a small percentage are on maternity leave, but for smaller employers this is a real killer, and as we know, the EU tends to favour large employers who have the most generous lobbyists.
So how about just allowing women who stop working to claim the same Citizen's Income as anybody else (about £60 a week, in practice) to tide them over while they are at home with baby? Surely she and the father will have planned for this, saved up a bit and so on, so with her Citizen's Income and the baby's Citizen's Income (of say £30 a week) they should do OK and there's no need to burden her individual employer.
Story Three: The European Court of Justice has said some migrant families can stay in the UK and claim benefits - even if the main worker has left the country.
The court, which deals with EU law, said some families must be allowed to stay when their child was in education. A child's education was paramount, so parents could not be told to leave if they could not support themselves... The judgement could lead to more foreign national families claiming a right to remain, even if they are not working and have no ties here other than children in education.
Like I said, there will have to be a cut-off point, you can't deny long-term residents benefits on the basis they weren't born here, but we could go on the safe side and start with a minimum residency period of ten years and busk it from there. Of course, applying that logic, the 'right' to a free State education is another kind of universal benefit, and you could argue that a child should only be entitled if the parents had lived here and paid their way for ten years before the child started school, but that's a different debate.
In the case of the two women mentioned in the article, the first one, being a Somali with an ex-husband with a Danish passport would have another three years to wait before she qualified for a Citizen's Income, but the Portuguese woman would already qualify, end of discussion, there's no need for hugely expensive court cases to decide this.
Forbidden Bible Verses — Genesis 43:24-34
5 hours ago
13 comments:
And where is the money to come from for all this?
The country is broke.
State pension, pension credit, carer's credit. Complete and utter joke.
The benefits system can from now on in only retract. Quite simply we cannot afford it. Labour have grotesquely abused it and as such ensured its malaise.
It's all but finished.
paulo
P. What I have recommended is a straight, £ for £ swap for the existing welfare and pensions systems, but without the obvious downsides (couple penalty, means-testing, admin hassles and bureacracy, bribes to single mums, disincentives to saving, opportinities for fraud etc).
If you're looking to cut state spending, then the place to start is millions of hugely expensive taxpayer- funded make-work jobs, not the welfare safety net.
The whole welfare "safety net" is a means tested trap that keeps people on it.
I reckon a CD of about 6-7000 per year would be easy to raise from a 7% LVT & IPVT (especially as lots of things would fall in price in low land value areas).
I'd auction the right to collect the CD.
Surely she and the father will have planned for this, saved up a bit and so on,
Shirley, you jest?
I don't like the idea of just handing out benefits without some sort of test. I agree that means benefit isn't great but mainly because giving money to someone just because they're poor isn't the proper way to do it. The deserving poor are surely the ones who should be in mind. I.e. if you've never had a job then of course you will be poor, but you might have had savings and spent them to look after yourself when made redundant and be poor. Both are looked at as the same, but they quite clearly aren't. A bit of extra cost to check is justified, in my opinion, to stop people from taking advantage.
Obviously this kind of thing should be done at as local a level as possible, such as your vicar giving out money in your village. If you say you're too disabled to work you've got nowhere to hide.
Are there any studies / estimates / whatevers of the cost of checking compared to the cost saved by excluding people who wouldn't be eligible under normal circumstances?
It's normally called a Citizens Dividend and is paid out equally because everyone has an equal share in the land.
EKTWP,
1. As to eligibity, as I've said before:
... there is [already] a huge range of nigh universal non-means tested benefits, such as the right to NHS treatment or a state education place; the right to ring the fire brigade or the police; the right to vote elections; the right to drive a vehicle on a public highway, [the right to a tax-free personal allowance] etc etc.
Why should modest weekly cash payments to legally resident British citizens be seen any differently?
2. The costs of administering current welfare and all the distortions that engenders (i.e. people pretending to be ill and then either not working, or working cash in hand etc etc) far outweigh the cash cost.
3. The current cash cost is £163 billion per annum of which £10 billion is admin costs. Add to that the 'cost' of 40 million personal allowances worth £2,000 each and we have a budget of £243 billion.
4. Now, imagine we replaced welfare and tax-free personal allowance with a CI as follows (round figures):
10 million kids @ £30 per week = £15 billion
40 million working age adults @ £60 per week = £120 billion.
11 million pensioners @ £130 per week = £72 billion.
Total cash cost = £222 billion. So that already puts us £20 billion ahead.
5. IDS estimated the economic and social costs of the welfare system at £100 billion. That may well be exaggerated, but it must be at least half that.
Ergo, we would end up at least £70 billion ahead.
What's not to like?
EKTWP, I forgot another £20 billion that goes through HM Revenue & Customs for Child Benefit and Tax Credits, so the potential saving by moving to a CI system is £90 billion.
The Somali lady did not have a Danish passport (her husband and children did/do). Not that it matters really.
Mark, just to keep it simple, imagine the NHS. How much does it cost now? How much would it cost to say "if you want to use it, prove that you can't afford private health insurance" and to administer that. How much does the new NHS then cost. What is the difference?
With benefit, if the number of people getting away with claiming when they shouldn't be is a small percentage of the total number of claimants then it would be cheaper just to give it to everyone who applies.
Having some kind of selection criteria will ward off people who would apply "just in case" though if this number would be very small then it would be a waste of money. Or if you're employing an army of inefficient bureaucrats who do nothing at all.
EKTWP, as to the NHS or education, the way forward is vouchers, which is the same general idea as CI. That helps low income people and gives us most of the benefits of a free market.
As to the rest, it appears that you agree with my
general argument.
What most people overlook is that, at present, there only about two million people in this country who neither claim benefits of one kind or another nor use up their personal allowance (primarily non-working spouses).
Everybody else is either using their personal allowance (and accruing a slightly higher pension) or is getting child benefit, child tax credits, unemployment or incapacity benefit, old age pension, student grant, statutory maternity pay, tax credits etc etc.
As I bear no grudge against non-working spouses, I'd simplify welfare and extend it to them as well, problem solved.
Look, I would love the CBI to be simple as opposed to simplistic. Alas I have yet to see a properly thought out set of figures that work and would not bankrupt the nation.
Even if it did not, there is something telling me that such a living entitlement with NO strings would
a) Attract vast numbers of peopole to the UK to spoof citizenship.
b) Remove any incentive to work for even more people
c) create a movement to raise the amounts higher and higher like some Red Giant star which will collapse and explode.
Where to start?
"3. The current cash cost is £163 billion per annum of which £10 billion is admin costs. Add to that the 'cost' of 40 million personal allowances worth £2,000 each and we have a budget of £243 billion."
£2000? Where do you get that from? People have a personal allowance of £6000k, so it is more like £1200@20% and 40m people do NOT all use it. Even if they did, it is not a "cost". What a sick way of thinking about it!
So, 40m x 1200 = £48bln, not £80bln
"4. Now, imagine we replaced welfare and tax-free personal allowance with a CI as follows (round figures):
10 million kids @ £30 per week = £15 billion
40 million working age adults @ £60 per week = £120 billion.
11 million pensioners @ £130 per week = £72 billion.
Total cash cost = £222 billion. So that already puts us £20 billion ahead."
£60 is barely enough for a single person to share a room in London, let alone heat and eat. Forget clothing or anything else. No, your numbers suck.
"5. IDS estimated the economic and social costs of the welfare system at £100 billion. That may well be exaggerated, but it must be at least half that."
But this is not £100bn in lost revenue, is it? At best it is 20% of that.
"Ergo, we would end up at least £70 billion ahead.
What's not to like?"
Your wonky maths, Mark.
1/10 See Me.
p.s. I do want to see working numbers for this, I am honest. Someone. Please?
RT, It might have taken me three years to responding to your comment but I was looking for a polite way of saying that you are a complete and utter Daily Mail reading self righteous innumerate c-nt.
And I still haven't thought of one.
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