On the subject of the DWP turning people who are obviously disabled down, well in my last week working for an MP we had a case of a pensioner who was not only going blind but had just had her leg amputated.

She applied for Disability Living Allowance. The DWP told her to wait and apply later…in case her leg grew back. She did wait (having no choice), and the DWP decided that no, she wasn’t disabled enough for DLA.

It made it into The Sun, if you don’t believe me:

http://www.thesun.co.uk/sol/homepage/news/2612360/No-cash-as-leg-may-grow-back.html?OTC-RSSATTR=News

(on this occasion, The Sun actually managed to stick to facts)

If it is any consolation, this decentralist idea doesn’t sound like it was originally a Tory idea at all. Frank Field has been banging that drum for quite a while, and was the government’s welfare reformer till Gordon Brown axed him.

Excellent article – There is always a great paradox with benefits. If you want an efficient system, you have to make it general. If you want a system that attempts to cater for individual need, you end up spending billions on administration.

Devolution of welfare was championed by David Blunkett.

I’d have a lot more confidence in it if it were Blunkett (who was an effective leader of a council and knows a lot about poverty) introducing these reforms, but the gruesome combination of Lord Freud, Theresa May and the leader of Essex County Council devolving welfare budgets (with 10% cuts each year) would make a bad situation much worse.

I understand, of course, that the Tories are about as likely to really have the best interests of the poor and unlucky at heart as I am to be a contestant on the next series of Strictly Come Dancing.

Just because people disagree on what has to be done to help people, does it then mean that the people you generally disagree with “don’t care”?

If caring means the current system of benefit traps and underperforming systems to help people to help themselves back into work, then is caring – as defined by you – such a good thing?

I’ve never met a single person who, when these issues are debated, didn’t actually “care” about helping the poor. Have you?

5 – Margaret Thatcher

“The plan in question involves decentralising the benefits system – giving individual councils a lump sum of money to spend on welfare howsoever they choose.”

Who would rely on a council like this to sensibly dispense welfare payments to those in need?

“A council at the centre of a police fraud inquiry has been criticised in an independent report for blatant junketing which cost the taxpayer hundreds of thousands of pounds.”
http://news.bbc.co.uk/1/hi/uk/40990.stm

Btw has anyone noticed £14 millions lying around for the taking?

“The South Yorkshire Trading Standards Unit is to close on 31 July over a £14m shortfall in its accounts. The discrepancy came to light after the death of the unit’s general manager in December 2005 and is being investigated by the Serious Fraud Office.”
http://news.bbc.co.uk/1/hi/england/south_yorkshire/5149450.stm

Who would assume that central government were any more competent/less venal? Just cos central government junkets disappear into a much bigger budget doesn’t mean they aren’t also on the take. Decentralise and at least you have a chance of uncovering the fraud.

Just a mo’, Housing Benefit and Council Tax Benefit are dispensed by local councils.

Consider then Para 1.8 of this Summary Report in 2001 of the Benefit Fraud Inspectorate of the Department for Work and Pensions into the operations of one local authority which will be very familiar to Mr Blunkett:

“Our overall conclusion is that, although there is good work in some areas, SCC’s benefits and counter fraud operations are not effective. Service to customers is poor, with significant delay a long-standing feature both before claims are decided and when changes are notified. Management control needs to be improved, for example by the use of checks to ensure quality, security and accuracy. Verification of evidence provided by customers in support of their claims is not sufficiently thorough or consistent. Many allegations of fraud are not investigated with sufficient rigour [blanked out]”
http://www.bfi.gov.uk/reports/2001/bfi/sheffield/summary/

The plan in question involves decentralising the benefits system – giving individual councils a lump sum of money to spend on welfare howsoever they choose. Provided that safeguards were put in place ensuring a minimum amount of benefits and housing support were offered to the needy, this would actually be an improvement on the current system, which involves a great deal of overheads for very little positive return.

The potential for gaming this idea is enormous:

– It centralises the allocation process, making it subject to whatever whims the government of the day is prone to, especially in defining the ‘minimum amount of benefits and housing support’

– It risks political favouritism, depending on the methodology used

– It risks over/underestimating the extent of welfare need (methodology again)

– It depends on who’s in charge of the budget: Labour, the LibDems, Tories, Barnet EasyCouncil or the Mayor of Doncaster

– It could be subject to ‘taxpayers’ revolts’ against either more generous levels of support or any support at all

In short, it’s the old trade-off between localism and the ‘postcode lottery’, a genuine progressive reform or a modern version of ‘going on the parish’.

“a modern version of ‘going on the parish’”

Absolutely. Try this account of the Elizabethan poor law of 1601:
http://www.victorianweb.org/history/poorlaw/elizpl.html

I would not trust my local council to run a piss up in a brewery, let alone a welfare system.

The solution is citiznes income, of course.

Redpesto – how are those things not (potential) problems with central government? All these difficult decisions have to be taken somewhere, so the question is at what level.

“Britain has the stingiest welfare system in Europe”

Absolute rubbish – Try living on welfare in Italy.

“Not only do you have no money to live off until you get your first paycheck”

Yes you do – my partner works for the DWP. Claimants can get an interest free loan until their first pay cheque. You can also get help with transport, clothing etc for a job interview.

You’re central point is a good one – don’t ruin it with exaggerations and half-truths

Nick

Redpesto – how are those things not (potential) problems with central government? All these difficult decisions have to be taken somewhere, so the question is at what level.

True – but I refer you to the last part of my original post: “In short, it’s the old trade-off between localism and the ‘postcode lottery’, a genuine progressive reform or a modern version of ‘going on the parish’.” It might indeed be better for local knowledge to help with welfare, or the whole process might be subject to precisely the pressures I outlined. Maybe I’m more sceptical than Laurie on this one, and not just because it’s a Tory proposal.

But if the variation is down to local control, is it really a “postcode lottery”? Central bureaucracies create postcode lotteries by misapplying resources. But if differences between places are down to democratic decisions being taken more locally, that is not really a postcode lottery, it is just well… democracy! Claiming otherwise would be a bit like saying getting more or less benefits in France than in Britain is just a “nation of birth lottery”.

12 – “The solution is citiznes income, of course.”

Not “of course”. For example, how much do you think the citizen’s income should be set at, and which other benefits would you retain?

Nick – interesting (as long as there isn’t some kind of ‘residency test’ for each local authority to stop ‘economic migrants’ from over the border moving in to claim benefits – you know the drill; a localised version of the bile coming from the tabloids), though there is of course the lottery of being born on a particular soil conferring citizenship rights.

@17: how much do you think the citizen’s income should be set at, and which other benefits would you retain?

It should be set at a level that gives people enough to buy the essentials in life — food, housing, clothes, net access, etc.

In terms of other benefits, a child benefit and an increase in CI for old people. Disabled people are probelmatic because they each have different disabilities so a one-size-fits-all approach of CI doesn’t work very well; possibly the best way would for there to be an addition for disabled people which would be individually assessed.

I specifically don’t think there should be any equivalent of housing benefit; his is because if I was running things housing would be a lot cheaper than it is, and there would be no need for it.

The idea of this meaning local control over whether to raise or lower benefits is an illusion, unless council tax caps are abolished and the level of grants are not reduced at all under the Tories. I think we all know neither of those two things will happen, which means councils will have no way of raising money to pay out higher benefits, and are likely to see cutting benefits as an easy way of saving money faced with the necessity of finding more and more savings. (After all, cutting benefits is easier than structural change.)

So all this amounts to is local control over whether to cut benefits a little, or a lot. And because it’s supposedly down to local councils, the government escapes the rap for it.

Yep, that sounds like the Tories.

Citizens Basic Income is the answer and it’s time one of the parties of the left started promoting the idea.

Everyone would be better off including the country as a whole. The only exception would be those involved in swallowing the £3.36 billion to so expensively divide the cake under the present system.

But we could do with one fewer Kafkaesque beaurocracy.

And think of the pride you could take in receiving your guaranteed minimum income from the state as a right granted to you as a citizen of the UK rather than having, as now, to beg or lie to some low calibre flunkey to grant you an allowance because you are trying to get work, are disabled or whatever.

No more scroungers ever!!!!

19 – “It should be set at a level that gives people enough to buy the essentials in life — food, housing, clothes, net access, etc.”

That’s about £13,000 per year (based on Joseph Rowntree Foundation research on what people regard as essentials – which excludes housing costs). CI of 13k per year for 41 million working age adults is about £533 billion per year, even before you add in anything for children or older people. That’s roughly triple the current level of welfare spending.

“I specifically don’t think there should be any equivalent of housing benefit; his is because if I was running things housing would be a lot cheaper than it is, and there would be no need for it.”

I’d agree with that, but there needs to be some pretty drastic action to make housing, in London and the South East in particular, affordable without any kind of housing benefits.

21 – “Citizens Basic Income is the answer and it’s time one of the parties of the left started promoting the idea.”

pagar, same question to you – at what level should the Citizens’ Income be set, and which other benefits should be retained?

£13K is ridiculous, that’s half the national median income (and anyone on the nat median has to find housing costs, the biggest expense as well) – The Joseph Rowntree Foundation obviously have a very different idea of “essentials” to me. An essential is something without which you be at risk of serious illness/death. How on earth is “net access” an essential ?

Hi Matt,

The JRF research came from a representative cross-sample of the population, so it is the general public’s definition of what is needed to achieve an acceptable standard of living in Britain today (which is what I thought Phillip was getting at with regard to ‘enough to buy the essentials in life— food, housing, clothes, net access, etc.’) So it is the Great British Public, not pointy-headed librul intellectuals, who came up with the figure.

http://www.jrf.org.uk/publications/minimum-income-standard-britain-what-people-think

Yes but an acceptable standard of living is what working people consider acceptable in exchange for working. It cannot be used to set the level at which a non working person gets benefits, unless of course the real agenda is to redistribute wealth such that the working/lower middle class are indistinguishable from the benefits class.

“It cannot be used to set the level at which a non working person gets benefits”

Indeed, not least because the cost would be over £500 billion!

@22: That’s about £13,000 per year (based on Joseph Rowntree Foundation research on what people regard as essentials – which excludes housing costs). CI of 13k per year for 41 million working age adults is about £533 billion per year

The total I spend on non-housing costs is a good deal less than 13 grand a year, so I think that’s bollocks.

The level of CI should be such that someone who’s on the dole should get roughly the same as they get now — if they want more than that they can get off their arse and get a job (the whole point of CI is it doesn’t discourage working).

And anyone should be allowed to start a microbusiness, and not pay any tax or have to obey any other red tape, doing any activity that it would be legal to do without payment, as long as the annual turnover is less than 2 grand or so.

Where does the £13K come from? The JRF quotes a figure of £158 per week not including housing, or £210 per week including housing, for a single adult. That’s £8,200 pa without housing or £10,900 with housing.

The citizen’s income should be set at a level where one could just barely subsist on it (and, as Don points out, it has to be, because setting it at the level of a “living wage” results in stupid numbers.) The point (well, a point) of the citizen’s income is that you eliminate the benefit trap, so people are able to to a few hours’ work and actually earn money.

Now, it’s OK for the total citizen’s income spend to be bigger than the current welfare budget, because tax revenues will be going up to compensate for much of it (personal allowances will be eliminated, and the basic rate of income tax will be increased – rather by definition, the average household can’t be made dramatically richer by the introduction of a CI.

Going back to the figures from the JRF, which appear to be £10,900 including housing, rather than £13K excluding it, we find that this includes, for a single adult, the sum of £30 a week for “social and cultural participation” which includes day trips, sporting and entertainment activities and an annual UK holiday. A CI certainly shouldn’t be paying for the average non-working person to take a holiday! So one could reasonably knock £1500 off the total to leave £9,400 per annum (including housing). (If I do a rough accounting for inflation, that’s a bit more than I lived on fairly comfortably as a graduate student a number of years ago, so it doesn’t seem too far off base to me.)

But pointing at a CI proposal and saying “I couldn’t live on that from year to year” is missing the point. The CI isn’t supposed to let you live comfortably from year to year. It’s supposed to let you live frugally, but make it easy for you to be able to take on short-term or part-time work. So the expectation has to be that the average person who is currently out of work would live on the CI plus some work. (Lots of people currently on benefits find it hard to get enough work to make it worthwhile working. In a CI world, it would be worthwhile for, for example, mothers of small children to do a few hours’ work a week.)

28/29 – £13k adequate income is before tax – hence the discrepancy between the figures. So fair enough if a citizen’s income wouldn’t be taxed, then it doesn’t need to be set at that high a level.

£9400 per year for working age adults would be £385 billion per year. I take the point about higher taxes etc., but even so.

£60/week is £128 billion, which is more affordable, but you also need to keep some form of tax credits, pension credit, disability benefits, housing benefits or you end up making poor people much worse off, which is not a good plan.

In terms of basic income policies, the Green Party proposals cost about £250 billion, which means extra taxes of about £65 billion on top of current spending. I think there’s a decent argument that their policies would make for a better welfare system, but it is a hard sell politically to say that millionaires should get the same benefits as unemployed people and that the tax burden should have to rise by tens of billions to pay for this.

If I was offered £13,000 a year, plus housing costs, I’d jack my job in right now.

‘Not only do you have no money to live off until you get your first paycheck, but if you lose the job at the end of your trial period, you’ll have to wait another couple of months before you get any money from the state, and you risk being turfed out onto the streets.’

That’s arse. If it’s within 12 weeks you make a ‘rapid reclaim’. Unless you’ve changed your circumstances, e.g. moved in with a partner, or out, that takes days at most.

The flaw as pointed out by redpesto is the additional scope for gaming, and the longer (and so less effective) chain of accountability, and I speak asomeone who spends an inordinate amount of my working week (work in mental health) trying to get some kind of response from authorities as to why perfectly good claims from exceptionally unwell/distressed claimants have been refused (while some which I consider spurious get passed).
The privatisation/outsourcing both of back to work (to the accursed a4e, whose multi-millionaire chief exec is championed by many politicos, but whose tutors and training are of highly debatable worth,and who have been accused of questionable practices) and medical assessments (to ATOS whose track record is of denying legit claims, as evidenced by class action law suits in the USA which they lost) on the national scale is deplorable, but given the zeal many councils have for outsourcing, this scandal won’t be ended by falling into LA remits.Accountability will be strained even further by the extra layer.
I would agree with localisation, but seeing that within the existing statutory agencies (and not their contracted-out ‘hit-men’), namely the DWP, and Jobcentre, steered by a panel containing NHS and social care staff, but not owned by any one interest. The risk exists if the whole shooting match is given to the LA is that either capping is centrally in some point down the line, or is self-imposed by grandstanding LAs (c.f. council tax). What is needed is greater transparency, and open and contestable assessments by fully-medically-qualified (not the current situation) experts in the specific field of disability (again not the current situation) and social care assessments. Some may say this is costly, but not when it saves catastrophic social and medical emergencies down the line.

“The privatisation/outsourcing both of back to work (to the accursed a4e, whose multi-millionaire chief exec is championed by many politicos, but whose tutors and training are of highly debatable worth,and who have been accused of questionable practices) and medical assessments (to ATOS whose track record is of denying legit claims, as evidenced by class action law suits in the USA which they lost) on the national scale is deplorable”

Absolutely spot on Alisdair.

Depressingly, however, the scheming ways of ATOS and back-to-work `charities`, immoral as they are, have not even raised an eyebrow within the left wing media.

The national mood when confronted with mentally and physically ill people is “fuck them, they’re all scroungers.”

My mentally ill brother was a recent recipient of an ATOS assessment – I won’t go into details, but it was a fiasco from start to finish. He never stood a chance. He wasn’t a person with mental difficulties to the assessor, he was merely a statistic.

It should be a national scandal, but as I say, the public don’t care if the genuine suffer as long as the fabled `scrounger` gets his comeuppance.

I think there’s a decent argument that their policies would make for a better welfare system, but it is a hard sell politically to say that millionaires should get the same benefits as unemployed people and that the tax burden should have to rise by tens of billions to pay for this.

To divide one’s financial interaction with the government into “tax” and “benefit” is a false dichotomy. The government giveth with one hand and taketh away with the other, and it’s only the net effect which has any relevance.

In fact, if you replace our current system with a CI, no personal allowance and an increased basic rate of tax to make the whole thing fiscally neutral (we’ll ignore for the moment the savings you make by firing a bunch of benefit office employees, which is good for everyone), then the millionaires are going to be a bit worse off than they are now, Mr. Average is going to be about the same, and anyone on the fringes of employment is going to be in a much better situation.

£60/week is £128 billion, which is more affordable, but you also need to keep some form of tax credits, pension credit, disability benefits, housing benefits or you end up making poor people much worse off, which is not a good plan.

£60/week plus housing looks like the proposal of the citizen’s income trust. They do a direct replacement of jobseekers allowance, income support, working/child tax credit, and whatever the state pension guarantee is called these days with this figure (double that for pensioners, a little less for young’uns).

With their scheme, “millionaires” pay a bit more, and students, part-time workers and working families with children do better.

Losers of concern under their scheme are single parents who don’t work, and families with a single earner earning the minimum wage, or a bit more. Both groups lose for the same reason – they currently have fairly large benefits that are clawed back quite rapidly. In one sense the CI scheme is an improvement – if we take our single earner couple with kids as an example, then under the current scheme someone on minimum wage ends up with nearly the same as someone on almost double the minimum wage, which doesn’t provide much in the way of an incentive.

To some extent, this is counteracted by the nature of the CI. The fact that there is no clawback and no bureaucracy means that it’s rather more attractive for a single parent to leave the kids with Grandma and do a few hours work each week or whatever, or for the non-working parent in the couple to take a job one day a week when the other parent can care for the children. Over time, this should sort itself out as these people take on extra work, but they would need some extra support as a CI was introduced to protect them from the sudden shock of the new regime. Maybe take the current income-dependent component of child/working tax credit, and taper it off over 12 months or something.

14 – have you ever actually tried to apply for said interest-free loan? It’s a few years since I even considered the idea, but as I recall the lengthy, detailed form was yet more evidence of a system deliberately designed to ensure you don’t get a penny if at all possible.

Although, as bad as the DWP are (I got a job independently, with no assistance from the JobCentre), the councils aren’t much better. The outsourced chaos of Sheffield City Council’s housing benefit and council tax system (was Liberata, now Capita) is a perfect case in point. I’d love to know how much the outsourcing costs.

Either way, from the point of view of an (ex) claimant, the system is horrendously wrong. What the answer is, though, I’m not sure, and whatever solution is eventually chosen – if any Government ever actually grasps the nettle, rather than going for quick wins elsewhere – will take considerably longer than one term of parliament to implement and make work.

@35: With their scheme, “millionaires” pay a bit more, and students, part-time workers and working families with children do better. Losers of concern under their scheme are single parents who don’t work, and families with a single earner earning the minimum wage, or a bit more.

If you redistribute the national cake, it’s inevitable some people will be winners and some losers. But CI allows over time for the vast majority to be winners. It does this by ending disincentives to work, and reducing bureaucracy, both of which make the economy more efficient.

The only way for everyone to get a bigger slice is to bake a bigger cake, which is why CI is a good idea.

@14 & 36,

With CI, people starting a job would continue to get it, so there would be no need for interest free loans or the bureaucracy that goes with them.

@23

pagar, same question to you – at what level should the Citizens’ Income be set, and which other benefits should be retained?

My suggestion would be to set it at the current level of the basic state pension and no other benefits would be retained.

And Don, I know you are going to say “what about people in social housing on housing benefit currently?

It’s complicated but I’d refer you to a paper by Mark Wadsworth ” Social Housing, Housing Benefit and Council Tax Benefit.”

His solution is neat.

Set net rents (i.e. rents plus Council Tax less Housing Benefit and Council Tax Benefit) in the social rented sector at 20% of a tenant household’s earned income.

The “better off poor” will no longer be able to exploit the below-market rents in social housing. Once income approaches average income, social rents will approach market rents, so such households will be more likely to move into the private-rented sector or owner-occupation. As a result, there will be a higher turnover in social housing, those on waiting lists will not have to wait as long and the cost of Housing Benefit and Council Tax Benefit paid to claimants in the privately rented sector will fall.

http://www.citizensincome.org/filelibrary/doc/Housing%20Benefit%20Discussion%20paper.doc

But councils don’t currently monitor tenant’s incomes – so I’m not convinced by your claims that the admin would cost less. Incidentally this seems a strange argument for a liberal because it would require local government to hold much more information on individuals than it currently does.

Not only that, because everyone’s rent would be different, being based on their own circumstances, there would presumably have to be some kind of appeal mechanism for when people thought the council had calculated the rent wrong. My gut is that this would happen with much more frequency than happens with tax credits.

I think localism in benefits distribution would be a nightmare. No Council is going to pay more as it would cost money and might encourage the poor to move there. What you’d get is every Council paying the legal minimum, or if we are unlucky a race to the bottom with richer areas hoping to export their expensive poor.

It would cut mobilty. There is currently a problem with NHS localism cutting mobility for expensive patients. No PCT wants another’s expensive patients to live in their area. It makes artificial boundaries of London Boroughs.

In practice I think localism would stop the poor moving to areas of higher employment as receiving areas would do what they could do avoid paying.

SecretLondon @42: Good points, but there will be no ‘legal minimum’. That’s the key point. The General Powers of Competence legislation that the Troy-led LGA is promoting and which Cameron has personally committed to introduce ‘within week’s of being elected will do away with any restrictions on local authorities.

Penny on the OP: while your ‘praise’ of the Tories plans are a rhetorical way of getting you into the main Labour bashing – I’ve no problem with that in itself – even to suggest that the Tories’ perversion of ‘localism’, encapsulated both in the benefit proposals set out at the weekend and more broadly by the aformentioned GPC legislation-to-be, is a serious mistake, I’m sorry to say.

These plans, which will bring US-style soup kitchens to the streets of the UK (and I can show you the Tory plans to facilitate that if you like) need combatting, not supporting because you don’t like Labour.

For further detail on the General Powers of Competence, see http://thoughcowardsflinch.com/2009/09/04/a-dismal-prospect-for-local-government-the-local-the-logic-the-legal-the-left/

Hi pagar,

“My suggestion would be to set it at the current level of the basic state pension and no other benefits would be retained.”

Seems a bit harsh on poor pensioners with no savings who would lose more than £20 per week.

What about people in private rented accommodation who receive housing and council tax benefit?

“If you redistribute the national cake, it’s inevitable some people will be winners and some losers.”

This is indeed the difficulty with sweeping welfare reforms or changes to the tax and benefits system.

The 2007 budget made most poor people better off and had millions more winners than losers. It is remembered as an attack on the poor and one of Labour’s greatest betrayals.

“That’s about £13,000 per year (based on Joseph Rowntree Foundation research on what people regard as essentials – which excludes housing costs)”

Minor nitpick. Pretty sure the JRF numbers include housing costs in social or council housing.

As a political matter, CBI would have to be at minimum pension guarantee at least, 113 a week isn’t it? 288 billion a year.

Given that we’ve just abolished the pension, jobseekers, etc etc etc at the same time could be done.

As to the high paid, well, nick an idea from Charles Murray why not (even though he is a racist about IQ) and tax it back from incomes over 50 k.

(even though he is a racist about IQ)

I trust this is intended as irony…..

Citizen’s Income is a terrible idea – a rising tide across the board just lifts prices and will make us a more expensive country for tourists and importers.

You’re Mr Tesco. All of a sudden your customers have an extra £50 per week in their pocket. Do you

a) slash prices. After all, you’ve got more money in your pocket, too.
b) keep prices the same. It’s not fair on them to charge more for the same products
c) Raise prices – those pips can be squeezed for a bit more juice; just blame inflation.

We won’t be any richer, because everyone is. I don’t wake up and think “My, I’m earning so much more than a ship breaker in Bangladesh,” because the cost of living and my conspicuous consumption habit deludes me into thinking I’m one of the worst off. I’m defined, both sub and consciously, by my environment, my living costs and the success of my peers and neighbours, not how many pennies I have to swim in like Scrooge McDuck

@49: Citizen’s Income is a terrible idea – a rising tide across the board just lifts prices

No, because people won’t have more money. People on low incomes will on average have about as much as now, people on middle incomes will on average have about as much as now, and people on high incomes will on average have about as much as now.

Since CI would be funded by taxation (and not printing money) the total amount of money in the economy will be about the same, and aggregate demand will thus also be about the same.

and will make us a more expensive country for tourists and importers

Not at all. (Were you trying to see how many economic fallacies you could get into one sentence?) If there was an overall increase in prices, this would cause the exchance rate to move, therefore tourists, importers, and foreigners generally would be unaffected. Just as we are unaffected by inflation in Zimbabwe.

DHP, you’re missing the point; Mr Tesco will also reduce the wages he offers and so will other employers, and any left over would probably be paid in extra tax to the government (which of course is then redistributed in the form of a CI).

Net, few would actually earn substantially more, it’s just that *everyone* would have a gold-plated guarantee of a livable income without billions of hoops to jump through, forms to fill in and access to be denied, and, furthermore, the insane withdrawal rates that massively disincentivize claimants from working would be abolished.

DHP

CBI is redistribution, not an increase in aggregate real income. Even if it was such an increase, aggregate income increases continually, and the real price of goods sold by Tesco still falls. CBI isn’t an increase in the money supply either, which would be inflationary, all else equal.

DHP, if you object to CBI on these (mistaken) grounds, would you object to increase in existing welfare benefits and tax relief? Both cause redistribution toward the poor. Redistribution toward the poor causes an increase in demand for the goods that the poor consume. There might be an increase in the real price of those goods, if supply cannot respond. There’s no reason to think supply cannot respond, over the medium term. But any short-run price increase wouldn’t be down to Tesco, who is just a middle-man and whose price setting (choice of mark-up) behaviour is explained by competition with Sainsbury, Asda etc and I don’t see how shifting patterns of demand would noticeably change competitive behaviour.

It’s not obvious how redistribution toward the poor affects the exchange rate, re. your first point.

CBI might not even constitute much of a net change in redistribution, as Philip points out @49 – just a change in the terms on which redistribution takes place.

Well, Zimbabwe’s not exactly on my top ten of holiday destinations.

I admit, I’m being a bit knee jerky, but the Citizen’s Income SEEMS to knock on the head the whole “from each according to their needs, to each according to their ability,” or something, that’s supposed to run deep in our veins. I’m a big fan of means tested benefit, and this seems to fly in the face. I’ll need to do more sneaky reading before I come back to it, though, and how this would affect existing taxes.

in a way we DO get a Citizen’s benefit – the 7K that we get to keep pre-tax, and that comes to the unemployed by way of JSA.

The trouble with any non coercive welfare state is balancing incentive vs starvation and crime, and short of selling the unemployed to corporations by way of indentured servitude, and passing the responsibility for paying their living costs to them, I can’t see a way forward.

DHP, the problem of “balancing incentive vs starvation” is part of any welfare system, isn’t it? The point of the CBI is that at least there’s no disincentive to get a job because of benefits withdrawal.

@53: I’m a big fan of means tested benefit

Means testing has two flaws. The first is that as people earn money, benefit is reduced, so they are only slighly better off, or often no better off at all. This obviously reduces incentives to work. This can be fixed by having benefit withdrawn more slowly as people earn more money.

The second problem is much harder to fix. Imagine someone is unemployed and getting £100 in benefits. They are then offered a casual job paying £6 an hour doing a variable number of hours every week. The first week they do 10 hours and get paid £60. The next week 40 hours, and paid £240, the third week 20 hours, pay £120, etc. Under a means tested benefit system, they have to get paid a different amount of benefit every week (alternately the total amount of benefit could be adjusted every year, meaning they have to pay back a large amount at the end of the year. This is obviously going to be very administratively cumbersome, particularly if they have to fill in a form for their changed circumstances every week and spend two weeks getting it processed. In fact it’s going to be so much of a hassle they won’t bother doing the job at all.

I think that the current JSA system needs to be more accepting of casual work; after all, just because you get a day’s taxable work doesn’t mean that you’re not looking for anything permanent on your other days.

I’ve been on the receiving end – they didn’t like the fact that I brought my two small children in. Couldn’t I leave them with someone? On a fortnightly basis for about two hours as a movable feast. If not, how did I expect to get a job? They obvioussly didn’t realise that I needed a proper job before I could AFFORD childcare.

I’ve been on the receiving end – they didn’t like the fact that I brought my two small children in.

CBI is an entitlement paid automatically.

You wouldn’t have to attend a Jobcentre and converse with the kind of morons that find such a job life fulfilling.

@57: You wouldn’t have to attend a Jobcentre and converse with the kind of morons that find such a job life fulfilling.

A boon to anyone who finds dealing with bureaucracies less than exciting.

“As a political matter, CBI would have to be at minimum pension guarantee at least, 113 a week isn’t it? 288 billion a year.

Given that we’ve just abolished the pension, jobseekers, etc etc etc at the same time could be done.”

Citizens Income Trust figures show that abolishing all those benefits (plus removing all tax relief and allowances – which you might not be so keen on) would raise about £200 billion (2006/7 numbers). So there is still another £90 odd billion to be found by raising taxes or reducing spending in other areas – on top of the current deficit.

http://www.publications.parliament.uk/pa/cm200607/cmselect/cmworpen/463/463we03.htm

This strikes me as challenging.

Yes, Don, except, that you’ve just given everyone in the country £113pw… which means that you can tax middle-income-earners more (by removing the personal allowance and/or raising the basic rate) because they now have more money; remember, the goal of the exercise is not to give everyone an *extra* £113pw, but to guarantee that everyone earns that as a minimum. The better off would probably have a good slice of that £113pw taxed back off them.

“So there is still another £90 odd billion to be found by raising taxes or reducing spending in other areas”

Easy-peasy….for of course we’re going to abolish all corporate welfare (bye bye regional development agencies!) saving 10 billion a year. Shave 10 billion a year off education by making each school independent and thus closing down the LEAs.

Leave the EU, saving another 10 billion….you know, 10 billion here and 10 billion there and pretty soon it adds up to real money.

Anyone who thinks (even in the absence of dynamic scoring or Laffer effects) that we cannot shave 20% off a currently bloated budget just isn’t thinking.