Thursday, 12 January 2017

Killer Arguments Against Citizen's Income, Not (3)

Lola reminded me about this article in The Telegraph:

But the big [experiment] is Finland, an entire country, which is going to do a pilot, selecting 2,000 unemployed people at random and giving them a monthly income of about £500, which is what they get in unemployment benefit but they will be allowed to keep it if they get a job. After two years, we will find out whether the scheme has encouraged people to work, given that the participants will be able to keep every euro cent that they earn (after tax).

There's no "whether" about it, it will, assuming 2,000 is a big enough sample size. Please note that they pitched their UBI at the same level as unemployment benefit, a very sensible move as it enables us to compare like with like.

The idea behind the basic income is lovely. It is that, if the state gives every citizen enough to live on as a right of citizenship..

Crassly incorrect. How much a person needs 'to live on' and whether the payment should be enough 'to live on' are two quite separate decisions and not central to the UBI debate. The argument worth having is how much it will be, let's start with 'the same as unemployment benefit' and busk it from there, I can see arguments for lower or higher and am neutral on the topic.

... they will accept irregular, part-time or precarious work because they won’t lose welfare benefits if they do so.

That part is correct, it is one of the many advantages.

Now comes the real crap:

The practice, however, is very expensive. One rudimentary scheme worked out for the UK by Malcolm Torry – and remember that he is an advocate of the basic income – proposed an income of £8,320 a year, to replace all benefits except housing and council-tax benefit.

That is hardly a generous annual stipend, and yet if it is to be funded through the income tax system it would require the rates of income tax to go up from 20, 40 and 45 per cent to 48, 68 and 73 per cent.

That is a superbly 'generous annual stipend' if you ask me. Malcolm has done lots of workings, and done illustrative schemes showing how much tax rates would have to increase. (I warned him against this at a meeting, I said if you make different suggestions, opponents will pick and choose the ones they like least and slag those off. Best to stick to one plain vanilla version, but hey).

If we pitch the UBI at approx. current unemployment benefit rates, no increases in tax rates are required whatsoever (assuming you get rid of most other welfare payments and the tax free personal allowance). Clearly, if you go mad and double that, it would require higher taxes. Malcolm wasn't recommending that amount, particularly, he just did the numbers.

Now the totally, grand, shitty finale:

If it’s grand, universal reform of the benefits system you want, study the everlasting disaster of the Universal Credit system and devise a practical way to make that work, instead of diverting your energies into campaigning for the schemes of impractical dreamers.

If we did a list of everything wrong with UC and tweaked them all, we would end up approaching UBI, so why not skip a few stages and go for the good stuff?


Ben Jamin' said...

John Rentoul has published the same rehashed article twice before.

I wrote to him pointing out his awful distortion of the truth. I'm sure I wouldn't have been the only one.

I guess he just doesn't bother to let the facts get in the way of the story he wants to make up.

mombers said...

So at least he admits that the benefits system is a mess:
"to do something about the often counter-productive interaction of the benefits system with the world of employment."
But if UBI isn't an answer, what is? No alternatives offered so not a useful contribution to the debate

Lola said...
Tells you all you really need to know about Rentoul.

Mark Wadsworth said...

BJ, correct.

M, good point, he didn't actually make any positive suggestions on e.g. how to improve UC (by making it more like UBI…)

L, ah, that is why I couldn't work out if he was slagging off UBI from the left or from the right, he's a large government meddler and so hates anything clean and simple that leaves people in peace.

Bayard said...

Just another example of "let's discredit this idea by offering a totally unworkable version of it it and say it's the only option".

Bayard said...

However, as I was once told, "If you are taking flak, then you must be over the target." This sort of hatchet job shows the idea of UBI is gaining traction.

Mark Wadsworth said...

B, yes and yes.