It appears that Iain Duncan Smith has finally grasped the true enormity of the UK welfare system and is stumbling vaguely in the direction of replacing it with a Citizen's Basic Income scheme (even though he might not know it yet!).
The Department of Work & Pensions has today published a consultation paper with a few direct questions in it, the answer to almost every one being either:
a) "A Citizen's Basic Income";
b) "There is no need for a parallel system of means testing/benefits withdrawal. This is best dealt with via the PAYE system, which can deduct tax/NIC flat rates of 31% (a BR code) , 41% (a D0 code) or 50% (a K-code)"; or
c) "There is no need for housing-related subsidies in the welfare system. It is quite sufficient, not to mention cheapest for the taxpayer, to build more social housing."
I shall be working on my full response over the next couple of weeks.
Friday, 30 July 2010
Being deadly serious for a moment...
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19 comments:
Whatever the merits of a CBI, I'm not quite sure how you can read the consultation paper as a move in that direction.
Two key principles reiterated again and again in that document are those of benefit taper and conditionality.
I can understand -- from a purely political perspective -- why those are there; and, given that they are, I can't see how you make the leap to suggesting that IDS is stumbling towards a non-conditional and non-tapering scheme like a Citizen's Basic Income...?
M, that's why I said "stumbling vaguely towards".
The paper talks a lot about simplification, rolling lots of benefits into one and reducing marginal withdrawal rates.
Don't forget that PAYE would act as a kind of benefits withdrawal, even if the benefit itself were non-means tested (like Child Benefit).
All this conditionality is bollocks of course - don't forget that there are only about one million adults in the UK who receive none of the following:
a) the benefit of the tax-free personal allowance when working (which is a king of universal benefit - albeit not worth much);
b) the old age pension
c) out of work benefits or tax credits;
d) student grants, statutory maternity pay, Child Benefit
e) Council Tax Benefit, below market rents in social housing etc.
f) are in prison or in care and getting free board and lodging.
all of which are 'conditional' upon something or other, but basically [nearly] everybody gets something, so you might as well just have one or two benefits and make them unconditional.
Good luck with that!
Disagree with "C".
Just have a higher CBI, and let housing get built.
"Social Housing" will always be used for gerrymandering.
'"Social Housing" will always be used for gerrymandering.'
That assumes that the inhabitants of social housing can be relied upon to vote in a particular way. That may have been the case thirty years ago, but today? I doubt it.
It also fails the most basic test. Equal access.
Government cannot (and should not provide) housing for everyone.
Just leave it to Guaranteeing Land Rights (and charging for them).
What's built on them should be funded by people, not the state.
IDS has no idea.
OTC, the only way forward is if enough people believe that there is a way forward.
AC1, social housing serves a massively useful purpose.
Besides giving some security of tenure to people at the bottom and the elderly, it provides a sideways rung for people who can't be arsed with 'the property ladder', is cheaper for the taxpayer than Housing Benefit and all things being equal, reduces rents and prices in the private sector.
See also what Bayard says.
JH, IDS' heart is in the right place - all he needs is people like me to explain how to sort it out.
Rejoice! Rejoice!
Not Planning for the right destination, not pointing in the right direction, but they look like they are beginning to turn the steering wheel.
Never too keen on the modern Basic Income when the old National Dividend also dealt with the banks' multiplication of credit by having the Gov dish out unearned incomes for all from newly created credit.That said I think it is disgraceful that MW has n't been brought on board by the Cons'tax simplification venture: the LVT strings attached might even make him acceptable to lurking land tax Liberals.
Is (c) true? Isn't there fluctuation in the number of people who need some kind of help with housing (whether that's social housing, housing benefit or whatever).
Now, if you want to tell me that local councils should deal with a peak in social housing demand by renting houses themselves and then installing the social housing tenants rather than by providing rent subsidies, I don't think I'd argue.
MA, to continue your analogy, they appear to have at least realised that successive Tory and Labour governments have been heading in the wrong direction for thirty years or more, and nobody has a compass or would no how to read it even if they had one...
DBC, a couple of my far more respected CBI chums had a crack at IDS and got firmly rebuffed by The Men In Grey Suits.
I don't understand your reference to a National Dividend based on banking incomes, that sounds like a dark and dangerous path to me - the last thing we need is state owned banks creating credit.
Anon, yes of course (c) is true or I wouldn't have said it.
Back in the days of low and stable house prices (1950s and 1960s) a third of households were in social housing, there was always enough for people at the bottom of the ladder.
And if the social housing ladder stretched too far up the social scale, so what? There was no barrier to 'going posh' and buying privately either, thus freeing up social housing for people even further down.
Wahey - I am, it would appear, one in a million - yes I have thought long and hard about it, and :-
a) the benefit of the tax-free personal allowance when working - nope ! Not now, not for quite a while ....
b) the old age pension - nope, far too young and fresh faced !
c) out of work benefits or tax credits - naah, made the mistake of doing some "rainy day forward planning" from early in life, so muggins is supporting muggins through the present hard times from what muggins carefully put aside during the good;
d) student grants, statutory maternity pay, Child Benefit - nope !
e) Council Tax Benefit, below market rents in social housing etc. Nope, not a one of them !
f) are in prison or in care and getting free board and lodging. Nope, "free board and lodging" is an attractive proposition, but I've heard the company can be not that easy to get along with - prison might be different of course.
But, as I know from the experience of those shall we say "close" to me, the benefits system is an untidy, difficult to navigate and understand (for recipients and 'donors') so, anything that tidied it up and made it slightly less insane, yes please.
Well one of a million rather than one in a million, if Mark's figures are right (as they usually are). But that still makes you one in sixty, Anonymous.
Mind you if there really are only a million non-recipients that means that moving to a Basic Income would likely be an out-and-out money-saver for the country as a whole because of the reductions in bureaucracy and checking that could be achieved, not to mention the removal of the need for minimum wage legislation.
Not surprised that IDS' people did n't want to know ; the most obvious feature of people who don't know what they're doing is rejecting any help.
Cannot see why you object to state-owned banks creating credit.How is it any better for private banks to create credit instead? The state would get to keep all the interest payments as a tax on money,which would be useful.
Anon, ta. I'd guess you're unemployed with savings. The largest group I can think of is stay at home wives with no children where hubby earns too much to be entitled to tax credits for the couple.
D, the problem here is that Tories and Labour love "conditionality". It requires a leap of faith to accept that it's cheaper to give it to everybody (including Anon above) than it is to have a couple of hundred thousand bureaucrats filter out people like Anon above.
PS, admin costs of DWP are about £10 billion per year - that's about the same as all Jobseekers Allowance and Income Support payouts for a year.
DBC, private banks shouldn't be "creating credit" either. They should be taking deposits and lending them out. Although there wouldn't appear to be any harm in having a higher tax on banks - let's slap VAT on them, and exempt everything else from VAT.
"It also fails the most basic test. Equal access. Government cannot (and should not provide) housing for everyone."
No it doesn't. Not everyone wants to rent, let alone rent a council house. Just because there is currently a shortage of council houses, thanks to Mrs T, doesn't mean that, by building a few more, everyone who wants one can rent one (not buy one on the cheap, the absurd "right to buy" would have to go).
Its all very well saying banks should n't be creating credit but they are.It would n't be pretty difficult to stop them.As you acknowledge yourself:even back when the currency was gold they were issuing promissory notes on gold in the vaults up to eight or nine times its value. Since thats the way it goes,it should be the public that benefits.
B, agreed. As I mentioned, even people who don't live in social housing benefit from it, as the more there is, the more it tends to depress rents and prices in the private sector.
DBC, as we both well know, Land Value Tax will sort out the banks and their credit creation tomfoolery :-)
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