Killer Arguments Against Citizen's Income, Not (9)

Emailed in by Shiney, John Kay trots out the usual half-hearted waffle. On the facts, he is not too far off the mark most of the time, but a lot of it is unfounded conjecture. The response to most of his KCN's must surely be: "So what?"

A few highlights:

A third, more mundane, argument for basic income observes that social welfare systems across the world have become extremely complex. Proponents of basic income argue that the scheme can achieve the objectives of welfare systems more effectively and at much reduced administrative cost.

Correct, which is what got me interested in the idea in the first place.

Putting Housing Benefit and disability benefits to one side, we have so many overlapping benefits and tax breaks, that by and large it all cancels out. Being fiscally neutral and without changing tax rates, you can replicate the end result (after welfare payments and tax deductions) within +/- £10 a week for 90% of UK citizens by giving everybody a single, flat-rate welfare payment (equal to current income support rate) and getting rid of the tax-free personal allowance and lower NIC threshold.

Call that mundane if you will, it would make the world a better place. Perhaps only a bit better, perhaps a lot better, but better.

Figures for basic income come from a variety of sources. The French figure is the minimum stipend of €750 per month proposed by Hamon, and the Swiss figure is that which was put forward for the 2016 referendum.

That bit about Switzerland is bollocks, the referendum mentioned no specific figure at all. The opponents managed to persuade people that it would be a stupid large figure like CHF 2,500 a month, not even I would have voted for that.

The lowest figures for basic income cited in Table 1 are those from the UK [i.e. about £74 a week] and Finland. This is no accident because, in contrast to the other proposals, the British and Finnish figures are not plucked from the air. The UK figure is based on the Green Party’s 2015 election manifesto, which is derived from a conscientiously conducted cost appraisal by the Citizen’s Income Trust. [Thanks, I sweated blood doing those] The Finnish figure is that used in that country’s current experiment...

In both countries, the level of basic income is below 20% of median full-time earnings.

So what? Income support is 20% of median full-time earnings at present. I'd rather have a flat £74/week citizen's income, no questions asked, than be subjected to all the form-filling, means-testing, interviews, clawbacks, penalties if I find work, and penalties if I don't system.

While the details of such calculations would vary from country to country, the essentials remain the same, and the conclusions inescapable. The provision of a universal basic income at a level which would provide a serious alternative to low-paid employment is impossibly expensive.

That is a valid argument against pie-in-the-sky Citizen's Income of £200/week, it is not an argument against a sensible £74/week. That's clearly not an "alternative" to low-paid employment, it is in addition. Like the right to vote or send your kids to a state school, those aren't alternatives to low-paid employment, they are in addition.

Housing costs are the largest component of the budget of almost all households and a particularly large proportion of the budgets of poor households.

Then keep subsidies for housing/Council Tax outside the system, that's a separate topic.

On examination, basic income cannot fulfil the aspirations of its proponents.

Yes it can. I'm a staunch proponent with a relatively modest proposal and modest aspirations which would easily be fulfilled (and real life evidence says, surpassed).

But it is hard to imagine a just system which would make no distinction between the millionaire’s spouse who routinely enjoys lunch with her friends while a nanny looks after the couple’s children and the single parent who must stay at home with her (or, occasionally, his) young and needy children, even though the other personal circumstances of the two [three?] may, in a formal sense, appear more or less identical.

Yes it is easy to imagine. If you get a few basic variables correct, all three of those people would end up with the same amount of money, give or take £10 a week (assuming freebies for single mothers are phased out over a few years instead of immediately so that they can adjust - find a job, find a partner or simply stop having kids). Is he saying that they get the wrong amounts at present? By definition, he must be.

Any method of reorganising tax and benefit systems which is even approximately revenue-neutral has winners and losers...

Correct. So what? A lot of these winner-loser comparisons are totally incorrect anyway, as critics of any sort of welfare system (current one or Citizen's Income) vastly over- or under-estimate how much people actually get now, or would get under CI, so they are comparing two wrong figures.

... if it did not, the outcome would reproduce the status quo and the reform would have little purpose.

Yes it would. Replace a thousand pages of legislation with one or two and replace a hundred thousand bureaucrats with standing g orders and more fraud investigators.

Analysis of this redistribution is strikingly absent from almost all discussion of basic income: who is it that receives too much under current arrangements and who too little?

Malcolm Torry has analysed this to death. Broadly speaking, it's a few hundred thousand unemployed single mothers who would get noticeably less (in the absence of some phasing out).

That is not to say that they get "too much", that is a moral judgement, and it is not to say that others get "too little". Daily Mail and Guardian reader can bicker over that sort of crap.

Basing the entire welfare pyramid of piffle on a few hundred thousand single unemployed mothers is like basing the entire taxation system on the narrow interests of a few hundred thousand Poor Widows In Mansions. Ah... right, that's exactly what we do.

If reform is revenue neutral, in the sense that the overall amount spent on welfare is to remain broadly unchanged (including for these purposes the foregone tax from the initial allowance and any substantially reduced lower bands of income tax as welfare payments), then the redistribution would be primarily amongst poor households.

Probably correct, but so what? It's like extending the right to vote to women, by definition, men collectively lose half their voting power. So what?

Attempting to turn basic income into a realistic proposal involves the reintroduction of elements of the benefit system which are dependent on multiple contingencies and also on income and wealth.

Nope. The only people suggesting loads of tweaks are people like him (read his article, it is a long list of unworkable tweaks with no real policy rationale behind them).

I share Piachaud’s conclusion that basic income is a distraction from sensible, feasible and necessary welfare reforms.

Propose some then, your article is full of totally daft proposals and largely unfounded carping. Whoever proposes something sensible is usually making steps towards a Citizen's Income.

As in other areas of policy, it is simply not the case that there are simple solutions to apparently difficult issues which policymakers have hitherto been too stupid or corrupt to implement.

That is exactly how it is. It is a simple - and better - solution to difficult issues and politicians and civil servants are stupid and corrupt. The Tories are currently spending more money on civil servants to harangue and harass claimants than it would have cost just to pay them their benefits. That looks pretty stupid and corrupt to me.