Sunday, 7 March 2021

On behalf of two of your constituents

Email I just sent (some typos corrected), for the record. Direct quotes from the MP's email to her constituents in italics.
Dear Ms M......

I am the Secretary of the Citizen's Basic Income Trust (formerly "Citizen's Income Trust").

Two of your constituents (I have bcc'd them in, in case they wish to pursue the matter further) have asked me to contact you regarding certain unsubstantiated claims you have made about Basic Income in general and our research in particular.
"The question of feasibility is one we should consider. No matter how desirable a UBI-style programme might be, it must also be feasible in the present context of our economy. When considering feasibility, we must address... whether it could be introduced in a manner that prevented losses amongst the most vulnerable in our society."

We agree entirely!

We assume that when you say "the most vulnerable" you mean existing welfare claimants. Three points here:

1. It would be easy to set the basic income at a level which such people's welfare payments do not fall significantly or do not fall at all. Whether we call it "income support" or "universal credit" or anything else, £1 paid out as "basic income" costs the DWP LESS than £1 paid out as "income support" or "universal credit" because there is little or no admin cost involved (short of basic fraud detection, which as we know from Child Benefit is nigh undetectable with flat rate benefits).

2. These people are particularly vulnerable because they know that benefits are very conditional, if there is the slightest administrative hiccup or they inadvertently breach a certain condition, they can lose their welfare income for weeks or months. A reliable non-withdrawable weekly payment of £90 each and every week is worth far more than knowing you will get £100 in most weeks but sometimes you will get nothing at all for a month or two.

3. You ignore the most "vulnerable" of all. For example those who have just lost their job, those who do irregular low paid jobs (zero hour contracts), and many more who do not receive any welfare payments at all because they do not meet the bureaucratic requirements (the homeless), or are discouraged from claiming because they know - or reasonably believe - that they might have to wait for several weeks to receive their Universal Credit, by which time they might have found a new low paid job and have to pay everything back, thus compounding the misery.
"could dramatically increase the number of children living in poverty (as was also found in modelling by the Citizen’s Income Trust)"

We have published lots of examples of Basic Income systems. Some replace most existing mainly means tested benefits with a single payment; others replace fewer such benefits and pay the Basic Income in addition, which automatically reduces the entitlement to and cost of means tested benefits. It would have helped your constituents in forming a decision had you actually provided full details of the particular example you were referring to.

Some of our examples do indeed show that certain groups (in particular unemployed single mothers) would receive £10 or £20 less a week. Others show that they would be largely unaffected. It is up to the government of the day to decide which system to choose.
"The report found that the additional tax revenue required to support such a system could be as much as £160 billion. Such a figure would indicate that UBI systems would be unaffordable..."

I will let Compass and JRF speak for themselves.

In none of our workings has the additional "cost" amounted to anything like that much - and none has required any change or at least any significant change to the rates of income tax and National Insurance (depending which example you choose).

Clearly, most adults are in steady paid employment and earn more than the income tax personal allowance of £12,500. We have always said that the Basic Income would be a straight swap for the personal allowance and the NI lower earnings threshold, so most adults would barely notice a difference - they receive a Basic Income of £70 - £100 per week, but pay extra tax of £70 - £100 per week. This could be dealt with via PAYE (as was the case in Ireland until recently) so this is not an extra "cost". It would be foolish to consider the £160 billion as a cost and the extra £160 billion as extra tax revenues.

(So this step is purely administrative - for the time being, it is easier just to exclude people in steady jobs from Basic Income and let them keep their personal allowance and lower earnings threshold, but they know that Basic Income is there if they suddenly need it. As the Adam Smith Institute has pointed out, for the majority of people there is no difference between the current system, Basic Income and Negative Income Tax).

The cost of paying the Basic Income to existing claimants (group 1 above) would barely change, depending on the precise level and which benefits it replaces.

There will more payments made to group 3 above - those in low paid and irregular work, but at least half of this will be clawed back by the PAYE system (the tax free allowance and lower earnings thresholds would be zero). This clearly obviates the need for a parallel means-testing system.

As you must know, clawing back benefits via the PAYE system is already part of the UK's overall system - for example student loan repayments and the higher earner child benefit charge. The PAYE system can easily be adapted to claw back all benefits automatically by adjusting each individual's PAYE code. The simpler the benefit system, the easier it is to adjust PAYE codes, they can be uprated each year automatically.

Any residual additional "cost" can be offset against the admin costs incurred by the DWP and HMRC, including losses due to fraud and error and student loan write offs, which are in the order of £20 billion - £30 billion a year. The net cost will be a drop in the ocean when set against UK government spending overall.

And whatever system you choose, the welfare state costs this country nothing. Some citizens pay in, others get money out, some pay in and receive similar amounts (people on Working Tax Credits). Workers pay in now and get a state pension when they reach retirement age. No sensible system is "unaffordable". I pay my children pocket money. That superficially costs me money, but it costs us as a family unit precisely nothing, and clearly improves our overall happiness - £20 a week is not much to me but £10 a week each means a lot to them.
"even when the effect on individual behaviours in the labour market are not considered... Our current welfare system, built around Universal Credit, seeks to incentivise claimants to move off benefits and to provide tailored support to help people find work and increase their earnings".

That is a major advantage of a Basic Income. There is no poverty trap. If a claimant finds a job, short or long term, low paid or well paid, they know that they will be better off. They can move seamlessly into work without having to wait weeks between their last welfare payment and their first pay cheque. If they lose their job, at least they know that their Basic Income is still coming in to cover essentials. The value of this goes above and beyond the pure cash value. It is good for peace of mind and a general sense of well being. Like home insurance - you hope that nothing ever happens and you will never have to make a claim - but it's nice to have the reassurance and it's worth a few hundred pounds a year.

Nearly everybody wants to "increase their earnings"! Most people receiving £100 basic income would prefer to have £100 basic income and another £100 in net wages after tax. Most people earning £20,000 want to do overtime or get pay rises or be promoted and earn £25,000 and so on. Persecuting low and non-earners does not add to this basic human instinct. The minority who do not want to or cannot increase their earnings because of caring duties and disabilities should not be punished. And yes, there is a residual group who live a very modest lifestyle and will stay on welfare. Trying to cajole them into work is pointless, no employer wants them. It's like expecting wealthy heirs and heiresses to lift a finger.
May I also take you up on this:

"the new Winter Grant Scheme which will deliver £170 million of funding to councils in England to provide vital support to the most vulnerable children and families"

There are nearly thirty million households in the UK. If that £170 million is paid equally to households in the lowest decile, that means about £60 each. Over a ten week winter, that makes £6 per household per week.
[Please note - in all our calculations we have assumed that welfare payments for housing costs and additional payments to people with a disability would continue as they are and be paid in addition to the Basic Income]
I hope this is food for thought

Yours faithfully

Saturday, 6 March 2021

Hey, shopkeepers...

... I hope you realise that if you try and sell stuff with a 500% profit margin or stop stocking it altogether, people will just bulk buy online? I'm all in favour of supporting my local businesses, but this goes both ways.

Newsthump explains Ricardo's Law of Rent

From Newsthump:

The nurses and paramedics that have just spent a gruelling year in the frontline of the war against COVID have finally seen their sacrifices rewarded by a 1% pay rise and the warm knowledge that the person who takes half their salary in rent is going to get richer...

Thursday, 4 March 2021

Killer Arguments Against Citizen's Income, Not (32)

From The Guardian:

The Conservative candidate for London mayor, Shaun Bailey, has been criticised for arguing people paid a universal basic income (UBI) would blow the money on “lots of drugs”...

Bailey also questioned whether it could “drive prices up for basic goods when we know people could just buy them because the money’s there”. He added he was “concerned about work incentive” and a UBI was not clearly defined.

There's not much point responding to that, apart from pointing out that Bailey has proved himself to be totally clueless or an utter shit. Or both.

Wednesday, 3 March 2021

Institute for Economic Affairs on top form

From the IEA:

* The UK could have a tax system that has a low negative effect on welfare and efficiency, with small compliance and administration costs; a system that is nondiscriminatory, avoids double taxation, and that is transparent and easy to understand.

* As such, we suggest that the TV Licence, Inheritance Tax, Stamp Duty Land Tax, the stamp duties on buying shares, the Apprenticeship Levy, Vehicle Excise Duty, Capital Gains Tax, the bank surcharge, and duties on alcohol, tobacco, and gambling, could be scrapped.

* Other property taxes such as Council Tax, the Community Infrastructure Levy, business rates and affordable housing and other s106 obligations, could be replaced with a single land value tax. Under this proposed system, disincentives for property improvements and housebuilding would be removed.

I would have added "the TV Licence, Inheritance Tax, Stamp Duty Land Tax... Capital Gains Tax" to the next list of truly wealth/land-related taxes to make it clear to Joe Public that LVT is a like-for-like swap. In more detail...

A land value tax

Our solution to the problems raised with the four previous taxes would be to create a land value tax system to provide a reliable source of income to local authorities, encourage development and reduce complexity in the tax system.

A single land value tax would tax the owners of property only on the value of the land itself. Buildings, improvements and land use would be of no concern to the tax system, avoiding the current disincentives for property improvements or housebuilding. Such a tax would also enable councils to receive part of the planning gain (the increase in the value of land when it is re-zoned for development, such as agricultural land being granted planning permission for housebuilding), giving local communities a major incentive to allow development.

I don't understand the insistence on LVT being a 'local tax' and hence inherently regressive, but it's an excellent start.

Monday, 1 March 2021

The size of an iceberg depends on where you live...

From Bedford Today: An iceberg which has been dubbed 'the size of Bedfordshire' has broken off from Antarctica, near to a British Antarctic Survey (BAS) station. The 1,270km2, 150 metre-thick chunk of frozen water separated from the Brunt Ice Shelf this morning.

Their fifteen seconds of fame didn't last long.

From The Metro: A huge iceberg nearly as large as Greater London has broken off the Antarctic ice shelf near a British research station.

From Paris Match: Un iceberg géant de la taille de Paris se détache de l'Antarctique

From IJsberg ter grootte van provincie Utrecht breekt af van Antarctica

From Iceberg the size of Co Monaghan calves in Antarctica

From In der Antarktis ist ein riesiger Eisberg vom Schelfeis abgebrochen. Das teilte die Organisation British Antarctic Survey (BAS) am Freitag mit. Der Eisberg mit einer Fläche von 1270 Quadratkilometern (etwa halb so groß wie das Saarland) war Teil des Brunt-Schelfeises, einem Gletscher in der Antarktis.

Bonus points to, who didn't describe its size in relation to anywhere in Belgium: De ijsberg ter grootte van de agglomeratie rond Parijs of Londen is losgekomen van het ijsplateau Brunt.

What's interesting is that in Dutch/Flemish, they capitalise the I and the J.

Saturday, 27 February 2021

Here we go again...

From the BBC:

A mortgage guarantee scheme to help people with small deposits get on the property ladder is set to be announced at next week's Budget. The government will offer incentives to lenders, bringing back 95% mortgages which have "virtually disappeared" during the pandemic, the Treasury says.

An extension to the Stamp Duty Land Tax "holiday" is also on the cards.
From The Daily Mail:

Biden bombs Syria border crossing and 'kills 22' Iran-backed militia fighters in retaliation to rocket attacks that injured American troops and killed a contractor in Iraq.

The poor sods will be looking back fondly at the Trump years.
And for a bit of light relief, a "global warming causes cooling" story from The Guardian:

Rahmstorf said: “We risk triggering [a tipping point] in this century, and the [Gulf Stream] would spin down within the next century. It is extremely unlikely that we have already triggered it, but if we do not stop global warming, it is increasingly likely that we will trigger it.”

Research in 2018 also showed a weakening of the AMOC, but the paper in Nature Geoscience says this was unprecedented over the last millennium, a clear indication that human actions are to blame. Scientists have previously said a weakening of the Gulf Stream could cause freezing winters in western Europe and unprecedented changes across the Atlantic.

Thursday, 25 February 2021

Not sure why this is anybody else's problem.

From the BBC:

Local MP Liam Byrne spoke about the problem in the House of Commons this week. It is, he told MPs, "a story of two nations - rich and poor".

This is not unique to Birmingham. It is a pattern that is being repeated across the country. The people who are most at risk from the virus are the ones, it seems, who are least likely to come forward for vaccination.

Detailed data on uptake down to a community level is not being published by the government to the frustration of many - the figures for Birmingham were published by the council. But what information is available suggests the poorest and most ethnically diverse communities (there is a huge overlap between the two) are seeing the lowest levels of uptake.

The vaccines seem to be working - hooray
Pfizer, Astra Zeneca, the UK govermnent and the NHS between them are handling it all well - hooray
The vaccines are 'free' and well advertised - hooray
They are not compulsory - hooray
The corollary of 'not compulsory' is that some people, for whatever reasons, will refuse to have it. Fair enough. That's the price of freedom.

Wednesday, 24 February 2021

RE: ozone depletion - how does the extra Ultraviolet B radiation affect clouds?

That's a question to which I have found no obvious answer, but I assume that if there is a bit of extra high intensity UV-B hitting the atmosphere, it will evaporate some of the clouds, i.e. turn water droplets back into water vapour. The wavelength of UV-B is orders of magnitude less than that of infra red, so the chances of it being absorbed by a molecule in a tiny water droplet is commensurately higher. And 'absorbed' just means that radiation energy is converted to some other form of energy.

This can lead to a disproportionate effect on surface and atmospheric temperatures. This theory might be totally wrong of course but it seems plausible to me. The effect must be warming, however slight. I've not put numbers on the effect because you have to make far too many assumptions so that would 'prove' nothing. This is a wait and see operation. If I live long enough to see the 'ozone hole' repair itself (perhaps by the middle of this century?) and temperatures fall again even though CO2 levels have increased (and they will), then that would support the theory but not really 'prove' it either way:

1. Starting position pre-ozone depletion

Some sunlight hits the surface, most of it hits clouds and is partially reflected: 2. There is now more UV-B (imaginatively coloured violet, even though it is invisible)

Some hits the surface; most of it hits clouds: 3. Cloud cover is reduced

Some of the energy in UV-B evaporates water droplets and so is converted to latent heat of evaporation (no measurable temperature increase). That thins the clouds slightly and reduces the amount of cloud cover. This allows more sunlight at all other wavelengths through to the surface.

So it's not so much the bit of extra UV-B which warms the surface; it is all the other sunlight that isn't reflected and that now gets through. An average reduction in cloud cover of 2% reduces albedo and increases the amount of sunlight getting through by about 1%, sufficient to cause about 1 degree of surface warming: 4. At night, the water vapour condenses into clouds again

The energy converted to latent heat of evaporation during the day turns back into extra thermal energy when the water vapour condenses again (or the rate of cooling is lower than it otherwise would be). This warms the atmosphere slightly. The surface is also slightly warmer. The pink arrows denote the extra infra red and warmth generally:

Sunday, 21 February 2021

Access to LVTC site blocked?

Here for general reference, an email reply from the people who run the LVTC site:

The "you have been blocked" message comes up when a visitor triggers the website's firewall by doing something untoward, e.g. repeatedly attempting to log in to the admin area.

You get three chances before you're blocked for a day, and if you're blocked three times you get permanently blocked by the firewall.

To block visitors the firewall uses their IP address. Unfortunately, because IP addresses are usually shared that does mean some genuine visitors will also get blocked. This appears to have happened [name].

I have cleared the block lists, so [name] will have access. If he doesn't please advise him to clear his browser history (the same thing will apply to anyone else).

Going forward, I've revised the firewall configuration and changed part of the warning message to say:

"Contact with your IPv4 address (visit if you believe you were blocked in error."