Do temps deserve extra rights?

9:06 am - December 5th 2007

by Sunny Hundal    

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Britain’s estimated 1.3 million temp workers may be legally entitled to the same pay and workplace conditions as permanent staff, if an EU law gets pushed through. Quelle surprise, the CBI doesn’t like it and says up to a quarter of million jobs may be lost. (via Tim Worstall). It is obviously in the interests of business to resist anything that pushes up their wage bills so the CBI’s position is unsurprising. I’d like to see the research backing up the figure they quote.

The question is, is it in the interests of temp workers? Will they better off? Resident economist Chris Dillow last year wrote why he was against the minimum wage, finishing with:

The real way to help the poor is not to raise the minimum wage but to introduce an unconditional basic income. This would give people the choice of whether to accept low-paid jobs or not, and so genuinely empower them. But then, New Labour’s mission is to harrass and manage the poor, not to liberate them, isn’t it?

I’m in favour of an unconditional basic income too… but won’t it be financed through taxing companies higher anyway?
Should liberal-lefties be for temp-worker rights because it affords them equal awards and protection, or opposed because it reduces their employment opportunities?

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Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Reader comments

Liberals should be opposed and lefties in favour, of course!

This is a discussion worth having.
I have no idea where the CBI figure came from, but the principle is clear.
When the cost of something goes up, you tend to use less of it.
This will reduce employment.

I am in favour of a basic income, but certainly not one of a size which could subsitute for employment.
I am rather in favour of a much higher tax free threshold – sufficient to take those on min wage out of tax, say £12,000.
But then Gordon Brown wouldn’t be able to “harrass and manage” the poor so much with tax credits then, would he?

People seem generally to underestimate the value of flexibility in contracts. For example, I have stayed in the same flat for the last 3 years not because it is all that nice but because I could leave with around a month’s notices at any time during the year without much hassle. That makes the flat attractive, especially compared to 1 year contracts. It means that I know I can adapt my living circumstances if my employment circumstances change and it means that I don’t have to worry about fitting my life around where I have agreed to live. The disadvantage is that the price of the rent without warning but, in practice, his desire to keep the flat filled and my desire for a flexible place to live works well. So far as I can tell, it is for similar reasons that people temp and the whole point of temporary work is that it is easy entrance and easy exit for both employers and employees.

A further point. A minimum wage hike inflates the costs of certain areas of the economy (obviously the ones that rely on low skilled labour). These sectors also tend to supply goods and services to those on a low income anyway (most people on a low income will use a supermarket or sometimes a fast food restaurant for food rather than an up market restaurant with an expensive chef). So when you raise the minimum wage, you tend to raise the costs of living for the least well off roughly in parity. So the economic costs tend to hit those who are meant to benefit for the wage increase (the least well off). The rich wouldn’t notice.

The advantage of a basic income allowance, at least in theory, is that the costs are spread over all the productive taxpaying areas of the economy whereas the benefit still go to the least well off. So I would suggest if a liberal is going to support any sort of redistribution of wealth, it ought not to be via a minimum wage, but through a basic income.

I think it comes down to a balance between worker rights and employment opportunities, as a matter of being pragmatic. The idealistic solutions are great (e.g. unconditional basic income) but the political battle for it remains to be won, so in the meantime we have to strike a balance in the current system.

I haven’t had time to go over these particular proposals in detail, so I’m not sure where I stand on them.

One interesting point from The Times article is the contention that employers will just force permanent workers to work longer hours to avoid taking on temps. That’s in part because we’re not signed up to the working time directive.

Tim says all new temp contracts will become “5 week, 4 day” affairs, but the question is, what’s the typical temp contract length at the moment? I have no idea, but it would be a useful way of analysing the competing claims about the impact of the legislation.

One of the problems of the notion of “left-liberal” is that it is just this kind of issue which splits the left from the liberal. The liberals are caught up in a model of an economy which relies on an underclass of temp workers, so it’s hard to see how they can compromise on any legislation designed to address that problem.

Metatone, I thought that we had the right to opt out of the WTD individually?

5. Margin4 Error

This may move some companies away from temporary work and towards full time staff. That is great for people who want full time regular work but bad for those seeking flexibility.

However, until the move is made the extent of the impact will remain unknown, and there seems something inherrantly wrong with treating people unequally in the workplace.


raising the non-taxed threshold to £12,000 would effectively be a tax cut of £1000 for every worker earning £12,000 or more. (That’s around 20million?).

So where would that £20billion come from?

you suggest scrapping tax credits to pay for it, but most on tax credits don’t earn close to £12k. A single woman earning around £10k per year from 40 hours work per week might get around £5 a month).

So why pretend that making poor poorer to pay for tax cuts for wealthy men like me is about saving the poor from being pushed around?

I would be happy for that £20bn (if that is the number) to come from slightly higher marginal rates for earnings above £12,000.

How am I making the poor poorer exactly?
Would the single woman you mention not be better off by not paying the tax she currently pays between the £5000ish allowance level and her £10,000 pay?

The main problem with tax credits of course is their very high withdrawal rate as incomes rise, leading to an effective 80%+ rates of tax on marginal earnings.
That is a total disgrace.

For example see here from “Liberal-Lefty” Chris Dillow:

8. Margin4 Error


I completely agree about the high marginal rate of withdrawal – it should be far less steep. (Though doing that expands the number of people eligible to claim and thus pushes up the price to the taxpayer.)

And my point about the woman on £10k per year may have been misplaced. I was trying to illustrate that those who benefit from credits are significantly poorer than the £12k annual income, and indeed generally much poorer than a full time worker earning minimum wage.

As such they don’t get the effective £1000 tax cut that raising the tax allowance to £12k would be to me. And removing their tax credit would hit them hard.

9. Margin4 Error

oh and chrisc

stumbling and mumbling makes a good case for a bad policy.

sure a fixed state income paid regardless of other income for every man and woman in the country might seem great, but here is an illustration of the policy.

50million adults – and a living income (barely one in this instance) of £5000 would cost…
…£250billlion (granted we could end the state pension under such a scheme).

For that the poorest people, including pensioners, would have to survive on £5000 or less than £100 per week.

And that’s not £100 per week in a world with housing benefit and council tax benefit – so that £100 would still have to pay rent. council tax, food, heating, clothing, etc.

is that practical? and could those of us working afford it even if it is?

@ Margin4Error. The idea is that that’s the minimum, and that there’s no tax at all on income above that until you hit the higher tax threshold.

So that yes, you only get £100 per week, but anything you earn above that would be tax free, incentivising part time work or small business start ups, etc.

It would be affordable by a number of measures, including a substantially reformed tax system, loss of administrative costs and, amongst other things, Land Value Taxation. Chris and others persuaded me of the case several years back, and although exact costings willd epend on economy at the time, the basic principle is reasonably sound.

Metatone: The liberals are caught up in a model of an economy which relies on an underclass of temp workers

Really? I don’t know many liberals keen on having an underclass of any kind—I myself am currently temping, and while I accept it it’s not something I’m particularly happy with. If you said “some liberals” then you’d be correct, but not all liberals want a permanent underclass, most of us recognise that sort of thing is horribly illiberal.

The choice between rights and opportunities is a false dichotomy used to play one side off against the other, divide and rule. It is one any true liberal would reject, whether from the left, right or centre.

Citizen’s Basic Income is a fantastic idea, however no mechanism has, as yet, been suggested by which would secure it’s financial sustainablility. CBI is also politically explosive for the radical changes that would be required to enact it and any transition to a model of economy based upon such a minimum standard (as opposed to the shoddy excuse called the minimum wage) would necessarily ruffle feathers across every sector of society – so who would champion it?

From what I can see, only aspirant artists and athletes, inventors, criminals, health patients, students, hermits and other non-conformists or social rejects would ever see any importance in being idle: Government has so entwined its interests with business (ie busy-ness) that it has become dogma for anything else or less (ie laziness) to become the concern of the busy-bodies for their perception of being a problem and out-of-control. So it is highly perverse that all those groups named above, among others, are and will remain the objects of intractable governmental failure.

12. Margin4 Error


I understand how easy it is to be conned into supporting this. I was until I worked out the maths.

£5,000 a year basic income + 50million adults = £250billion annual cost

that’s a between a fifth and a quarter of entire UK GDP
that’s over half of all government spending in the UK.

And what does that £5000 a year buy for the poorest people…

council tax – £1000 (for simplicity sake)
rent – £2000 (£38 a week)

That would leave around £2000 a year or £40 a week spending money for…

water – electricity – gas – food – clothes.

We could then reintroduce additional means tested benefits. But that adds to the cost and completely undermines the point, which was supposed to be to improve the marginal benefits of work.

as a logical argument it is a brilliant proposal. But as a practical policy people would die and the economy would collapse under the weight of it.

“That would leave around £2000 a year or £40 a week spending money for…

water – electricity – gas – food – clothes.”

Do-able if you scrapped subsidies and tariffs on food, so lowering the price to its real value, and abolished the minimum wage so that basic goods and services could become cheaper. The economy itself would benefit from the fact that there would be far more people employed (no incentive not to work), lowering the real terms cost of goods generally. The problem with those sort of calculations is that they don’t think 4th dimensionally. Of course, moving from our current model to that theoretical model would be very painful unless done in tiny stages. But that doesn’t mean it wouldn’t work given the right order of reforms.

14. Margin4 Error


here is some 4d thinking for you. (based on estimates obviously).

The following link shows our present welfare bill totals a bit under 10% of the total economy. . (it peaked at 13% during tough times)

a basic income payment would therefore require us to undertake a tax rise worth around 15 percent of the economy (to pay for the quarter of the economy it costs)

So – what would Britain with a national tax take of 55% instead of the current 40% look like?

It would be wrong to imagine that high tax economies always suffer low growth and low employment due to competitivity. However, those that don’t (Sweden for example) tend to avoid that trap by investing their heavy tax take in education and infrastructure, which benefits their economy.

The UK can’t do that, having allocated that extra tax take to hand outs to rich and poor alike. (Though to the wealthy £5000 doesn’t amount to much).

So we would have the same skills and infrastructure as at present, but with far higher tax.

that is likely to drive companies and skilled workers out of the country. Which in turn makes the tax take all the harder to collect as it must then be collected from a relatively smaller and economy with poorer people.

This spiral could be partly halted by scrapping the national minimum wage and competing for manufacturing jobs in the global economy. (note we couldn’t compete for service sector jobs as the well educated are likely to leave the country in large numbers if their incomes fall signifcantly. Even falling costs of living here not counter that as large numbers can work abroad and save much higher incomes for a wealthy retirement back home, as many immigrants in the UK do at present.)

So – manufacturing jobs – at present china employs unskilled staff at around a 20th of the wage of the UK.

So cutting the national minimum wage might see wages fall to Chinese levels of around 30p an hour. (The marginal value of employment therefore cut drastically again), not least as that income would likely have to be taxed.

But doing that would put wages on parity with china, not all costs. indeed china’s labour regulations and safety regulations are far cheaper to meet than ours, so our wages would have to fall further, or our conditions would have to become far less safe.

I hope that helps explain the nature of economic collapse the policy would trigger.

A Basic Income policy wouldn’t be paid for through taxation – it only highlights the lack of imagination and failure to properly concieve of the economic environment as a whole to make such a suggestion.

When pensions were introduced more than a lifetime ago the additional taxation used to pay for this was considered an investment in the future. As the generations passed and economic fortunes fluctuated, this form of national income started to be viewed as just that, unhypothecated income. When successive governments overreached themselves the contributions began to be used to pay for the outgoings, secure in the knowledge that the shortfall would be made up over the economic cycle. This never came to fruition as the latest generation capitalised on the future income base. The latest crisis was solved by privatising large chunks of it, effectively making us pay twice for something that has become meaningless, while thankfully taking it out of political control.

So what was designed as workers paying for their own retirement became workers contributing to the retirement of their parents and has since become paying the interest on the debt financing secured through this system (which went to pay for uneconomic subsidies and the massively inefficient expansion of the welfare state from the 60’s onwards), while we are asked to make voluntary contributions to private pensions because we are told this is now unaffordable!

The argument of the demographic transition and our aging population is a complete misnomer, as this would remain irrelevant had the original system been adhered to, but instead our grandparents generation decided to squander their wealth and subsequently our parents decided to squander the financial security of their children – us.

Yes, our parents never had it so good, because their stupidity ensured we wouldn’t.

16. Margin4 Error


while what you say is true – I don’t understand how any of it means that the basic income wouldn’t be paid for by taxation.

where else would the money come from? We can’t just conjour up £250billio a year.

17. Margin4 Error

strike that thomas – I think I’ve just twigged the point you are making, using pensions as the example.

As I recall a certain JSMill once advocated transition to a more efficient governmental system where the taxation burden was reduced towards nil – he was roundly dismissed as an absurd ideologue and became sidelined thereafter.

While I don’t agree that such practise could be argued as either more efficient or necessarily so, it is nevertheless enlightening to entertain the logic of it. As such it is just a question of formulae, financial mechanisms and a clear-headed, determined government with the right balance to see through any transition (though it speaks volumes about the vested interests, egos, other difficulties and politics that the closest this country came to such a government was the one that introduced the pensions system so long ago).

19. Margin4 Error


overcoming vested interests, egos, other difficulties and politics doesn’t make one’s policy right in itself.

As Bentham must have told Mill, history has tested those vested interests and other difficulties and found they have value. Hence they remain.

Thomas, you need to be more plain speaking – where do you see the funds coming from?

If it is not taxation, it can only be debt or fiat, surely?

“here is some 4d thinking for you. (based on estimates obviously).

The following link shows our present welfare bill totals a bit under 10% of the total economy. . (it peaked at 13% during tough times) ”

You are still not considering what the effect of the new incentive structure would be. Properly implemented, it would allow the economy itself to grow, meaning that the proportion of taxation could be the same or lower than it is now. Anyway, I haven’t done the calculations myself and I am not an expert on making estimates like this. My support for the idea of a basic income is more based on Charles Murray’s work in America, In Our Hands:,pubID.24127/pub_detail.asp

His theory relies on American figures and aggregating ALL welfare spending into one large allowing for every individual. I am not sure if anyone has done a similar calculation for UK spending so I cannot answer with figures. Nevertheless, I hope someone does do the analysis at some point and we’ll be able to see whether a single basic allowance would be preferable to a growing and encroaching welfare state.

22. Margin4 Error

btw – it seems that temps are not getting their equal rights. which is a shame to put it mildly.

23. Margin4 Error


your link to an american view of it suggests letting the poor die when they git sick – so as to make this affordable. That’s disgusting. Did you even read the interview you linked to?

so here we go again…

If we take your american suggestion and scrap the NHS (9% of GDP) we might need a smaller tax hike of 5-6% of GDP to pay for it.


We’d all then have to start paying for healthcare. That is effectively a privatised tax on those in work – and so the impact on business chosing to locate abroad, and staff moving abroad for work, remains unchanged.

and what of that pensioner on £5000 a year?

along with £2000 on rent and £1000 on council tax – he or she will now have to pay for his or her heart attacks, strokes, insulin, cancer treatment, flu jabs, etc. Along with food, electricity, water and clothes.

unless of course you imagine any insurance scheme would provide comprehensive cover to an old person or a poor person for a figure that didn’t take up all of their last £2000 a year. (they certainly don’t in the USA.)

and since we can’t offer any social provision without yet more tax hikes and completely undermining the point of the scheme – we must therefore let anyone out of work who gets cancer or has a heart attack die.

brilliant – what a wonderful left wing policy.

“your link to an american view of it suggests letting the poor die when they git sick – so as to make this affordable. That’s disgusting. Did you even read the interview you linked to?”

Uhhh… sorry, where exactly do they suggest letting the poor die? And I dunno if you have noticed, but poor people die when they get sick right now in the UK. They just die while waiting for treatment or after having been refused treatment that could have prolonged their life. A lot of those in work tend to use a mix of private health and the NHS at the moment, so as not to spend too much time off work. So that privatised tax is already in operation.

Since we don’t yet have in existence (or even in theory) a perfect system where health care costs are controlled and the poor get equal access to treatment, your options are:

– a disgustingly fake left-wing system that gives official entitlements to everyone while rationing availability according to a politically directed distribution of resources.

– a “disgusting” right-wing position that would give an equal entitlement to everyone to pursue their own health care needs. It doesn’t offer the guaranteed health care of a socialised system, but since those guarantees are never actually backed up, it might turn out to be preferable.

I am not left wing, I am a liberal. But I happen to think that the left point out many of the problems with society more successfully than those on the right. I feel it is up to those on the right to fit those problems that the left describes into solutions that are compatible with individual liberty.

25. Margin4 Error


your link suggests scrapping medicaid – the UK equivelent to that action would be scrapping the NHS. And doing so means leaving healthcare to the market.

And that’s where letting the poor die comes in.

You see, you mistake economics for communism.

Economics does not secure “equal entitlement” to anything as you optimistically suggest. It secures maximum value from scarce resources. (yes I did this at uni – sorry – it is dull)

Take red sports cars. Every man woman and child in the economy does not have one. That reflects that many choose not to own because they prefer a red Mini, or a green sports car, or because they don’t have the economic resources to exchange for one and so must prioritise other purchases (like a train ticket or a smart car).

and so it is with healthcare.

hence those without the economic resources to buy their life can’t have their life. Granted the alternative isn’t a smart car or a train ticket. It is death. But economics can’t distinguish between death and a smart car.

so a market system secures economic best value ensuring a costly lifesaving operation is only available to those who are able to generate sufficient economic resource to tip the balance.

hence the poor die

also your notion of the NHS is seemingly based on a complete misunderstanding of socialogy.

In particular you seem to attribute lower life expectancies for the relatively poor to a lack of access to healthcare. This is at most only a part of the cause, and in statistical relevance not a significant cause at all.

In Germany, Japan, Canada, the UK, France, etc the poor die younger than the rich. This is connected to housing conditions, diet, risky behaviours (drink and smoking in particular) and more dangerous or health damaging jobs. It is also a result of diminished education and thus less access to health information.

in the USA there is an additional cause resulting from using the market to determing healthcare.

That cause is that when the poor get knowingly sick they are turned away from treatment and left to die if they have no health cover or money. This applies to children in particular, adding to much higher infant mortality rates in the USA compared to nations of comparable wealth.

@Nick I’d give you specific proposals for how to fund a Basic Income scheme without necessitating taxation, but this isn’t a good forum to explain complex theories, partly for the reason that to do so would identify the areas for legitimate abuses to occur and be politically justified, thus losing the opportunity for radical reform.

I would say, though, that this is more a question of finding the balance of correct distribution of ownership, rather than artificially redistributing current holdings of property.
Also, the aborted Baby Bonds scheme did indicate one potential direction for investigation if you are really interested, although the half-hearted mechanisms and flawed formulae that were designed for their implementation highlighted the limitations of any scheme that isn’t radical enough, which is probably why the policiy didn’t pass the full period of gestation.

For a Liberal, I think the full implications of any compulsory universal scheme could be threatening as it comes perilously close to an ID database. Although the necessary devolution of decisions to a personal level would provide a system of checks and balances to centralised control.

If you think of HMRC as more of an holding bank than a bailiff (and BoE as the investment side), once you have set the minimum bar of universality, all that is left is to answer where in society the unrecognised value lies and by what formula to monetise that value so as to enable access to it for the wider populace.

The point about healthcare is well taken, and I fully agree that composite health, wealth and well-being cannot be separated from education. In fact any ‘knowledge economy’ must stem from recognising the true value of all knowledge.

In the area of health, I would suggest that it is the lack of responsiveness to the true health demands of society where the efficiency loss stems from. Again, this problem is resolved by working out a system of funding that does not depend on centralised decision making, so any universal endowment trust (which cannot be subverted for political ends by government) devolved to individual level provides the clearest relationship between institutional provision and end-user need (or if you prefer, supply and demand).

The argument about implementation of the market to force the changes is flawed by the failure to fully implement open and accountable relationships on both sides of the customer experience. This manipulation of regulatory requirements favours existing players and thus prevents any market from functioning effectively, thus any potential efficiency gains are prevented.
The true costs of health-care are obscured by the opacity of the decision-making process, as consultants, health-care managers and insurance institutions each seek to balance their own competing needs – with a result that any service is recieved with forced gratitude, rather than with the assured expectancy of the highest standard and welcome warm thanks in return.

Thomas, I hope it is not any of that Social Creditor shell game. If it is, please review, for your own sake.

yrs Sincerely

“hence those without the economic resources to buy their life can’t have their life. Granted the alternative isn’t a smart car or a train ticket. It is death. But economics can’t distinguish between death and a smart car.

so a market system secures economic best value ensuring a costly lifesaving operation is only available to those who are able to generate sufficient economic resource to tip the balance.

hence the poor die”

Not if you have a developed insurance market in which everyone is allowed to be a player (i.e. receives $10,000 per annum). I suppose in practice you may need to make insurance against life-threatening but treatable illness compulsory for all because people seem to occasionally make such poor choices (even with the money they have as an allowance).

@ Roger Thornhill, thanks for providing the opening, but please exuse the length of response.

Simply put: No, Social Credit, I think, misses the main point about the important link between value recognition and ownership, despite any valuable insights provided by the analysis.
Structural patterns of production and distribution identify only half of the relevant questions and answer only another half – it’s one of the reasons I am vehemently opposed to Green policy platforms, although it is easy to see how such an appeal can grow by hindering attempts to take a fully comprehensive perspective.

A good critique of modern capitalism encompasses the failure of centralising tendencies with consequent levels on inequality, but the problem remains how to provide an adequate and accurate measurement of value which maintains relevancy that can ONLY THEN be distributed fairly.

As I hoped to show with the example of the evolution of the pensions finance model, political pressures succumb to policy indiscipline in the name of power, with the result that capital value is destroyed by rebalancing the economic ownership in favour of active share-ownership at the expense of the stakeholding of more passive individuals.

Recent budget commentaries have underlined the forgetfulness inherent in this by trying to (properly!) redesignate National Insurance contributions as taxation, but then again, since Government finally abdicated Treasury responsibility for deepening universal capital holding by encouraging privatisation (here: take-up of private pensions) one must ask if the original basis for such a mechanism was still in any way truly meaningful (@Nick – National Insurance seems to have been designated for exactly this purpose: not just to allow entry, but to compel it).

In some senses I would advocate a reformed (some would say fully-implemented) market system of liberal capitalism that partially gleans from social credit on the grounds that exchange of goods and services is benefitial provided transactions are open, transparent and accountable, but this depends on the ensuring the accessability and universality of the measurement involved.

For this reason a dual approach is neccessary and I can’t escape drawing the conclusion that the levels of both individual knowledge as well as education reflect the motives and incentives of individuals and institutions involved.

One of the greatest reasons families on the lowest rung of the social ladder become trapped by the ills associated with despondant poverty is the failure of children to achieve their potential in schools.
A history of academic and educational underachievement is often accompanied by the breakdown of school attendance and in-class concentration, as higher levels of truancy are recorded and lower qualifications are attained: for many kids school is work and the classroom is a prison, while for parents it can often be viewed as an extended version of daycare or babysitting.

At the same time the degradation of skills is matched by the grade-inflation pressures attendant in the establishment of the educational marketplace as exemplified by league-tables.
Without a base standard set by the state inequality is exaggerated – some prosper, others fall through the net. In effect this creates the perception of a glass ceiling for those at the bottom, but when properly done a glass floor should raise all (@M4E, this is where we got our wires crossed about the minimum wage – the benefit of a minimum wage is the imposition of a glass floor rather than any one-off provision of a money escalator for those in low-pay jobs).
Employment rights are one form of compensation for previous failiures to identify the potential of an individual and their ability to reach it, so it is almost like closing the barn door after the horse has bolted.

The ambition of a sustainable employment sector should be to provide real jobs through real occupational opportunity, not through insecure entry-level temporary positions scavenging on the unwanted left-overs of an elitist heirarchy with little or no chance to progress.

Yes we should support extra rights for temps. Not to do so would be kind of an odd stance for the centre-left to take. Randite arguments about non-regulated markets enabling creative employers to create jobs for the mob notwithstanding, we should obviously take the view that the state has a role to play in mitigating the effects of the market on the most vulnerable.

Build a flawed market…
But, of course, where there is political capital to be gained, there will be people willing to use it to their own advantage. Cui bono indeed!

32. Margin4 Error


“Not if you have a developed insurance market in which everyone is allowed to be a player (i.e. receives $10,000 per annum). I suppose in practice you may need to make insurance against life-threatening but treatable illness compulsory for all because people seem to occasionally make such poor choices (even with the money they have as an allowance).”

please try thinking before spouting this nonsense.

At present UK healthcare (the NHS) costs £2000 per adult in the UK – every year. And to make insurance compulsory surely means making it equal.

so take the £5000 payment everyone gets – take the £1000 council tax, the £2000 rent, and the £2000 insurance premium, and thats £0 to live on all year long. (Starvation ensues).

you might ask why premiums must be equal for everyone – good question – and here is the answer.

If such a scheme operated like normal insurance, then those at high risk would have to pay more. So a low risk poor person on £5000 a year might have to pay £1000 a year premiums. (which after council tax and rent leaves £1000 for a year’s food and heating).

A high risk person though, might face £4,000 a year preimums. Yet on a £5000 basic income that would be unnaffordable (council tax, rent and insurance all compulsory makes outgoings of £7000 from an income of £5000.)

as such that person can’t have healthcare unless additional support is provided for the poor.

and tada – the system again defeats itself because free or subsidised healthcare for the poor means reducing the marginal benefit of working.

33. Margin4 Error


having calmed down after friday I’m back to agreeing with you.

One of the least stated but most important benefits to a minimum wage is that it tips the balance of insentives towards training.

Labour that is economically worth £3 per hour, but costs a firm £6 per hour, creates two insentives. One is to cut the wage (which the minimum wage doesn’t allow). The other is to raise the value of that labour.

That can be done most effectively through investment in training so as to diversify the role of the employee concerned.

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