When I wrote on the basic income a little while back, one of the criticisms levelled at it was that we can’t possibly afford it. I think this is misunderstanding the suggested principle and also what the knock on effects of it would be.
Another criticism is that people would abuse it – they’d just sit at home and do nothing. I think this misunderstands what motivates people to actually do things, *and* also what things are of value. Researching the cost of means tested benefits, I came across this article about why means testing benefits isn’t a fair process. A quote that leapt out at me: “One of the great strengths of universal benefits is that they create a sense of solidarity and shared understanding. Means tested benefits create the opposite, divisions and misunderstanding.”
We could do with a bit more of that. It’s easy to see how a variety of benefits are used at the moment to promote division in society by sections of the media and politicians. Scroungers, shirkers, people with their curtains closed in the morning (the track is broken on the living room set, sorry, so they’re closed right now) and there is this constant rhetoric against something for nothing.
Basic income goes completely against that. The idea is that everyone gets the same something, unconditionally. Say £10k for each adult in the country.
That would cost vast amounts of money. Maybe around £500 billion. (I’m rounding up to deal with easier numbers.) That gives you pause for thought.
But it’s not on top of the current welfare situation. It replaces income support, state pension, job seekers allowance. (I’m not sure about child benefit. Would we still need it? Possibly.) So that’s a budget of 144.1 + 112.5 to get us started. (I’m going to assume that this would replace PIP as the £10k is higher than the maximum you can get on PIP, the new disability benefit. Obviously I’m not going to be able to go into a huge amount of detail here.)
So, we’ve found £256bn to get us started. Half way there.
Anything else we can chuck into the mix? Personally, I’d scrap Trident – there’s another £20bn. And if we closed down tax evasion, we could probably raise enough to get us to £300bn.
And then there’s the clawback. From people with higher incomes, the £10k would be clawed back in tax. The basic income isn’t intended to mean everyone has x amount more than they have now, but rather that everyone starts with the same floor. I don’t know exactly what rates you’d have to set where to achieve this, but I’m sure there’s an accountant or economist out there that could figure it out.
All of this discounts that there would be a higher take in terms of VAT and so on – the people at the bottom end of the income scale tend to spend rather than save. You could do away with quite a bit of legislation around minimum wage – you wouldn’t have to enforce it. If people had the basics covered, they would be able to choose what they did workwise for top ups, and what rate they’d accept for it. Would you need all the worker’s rights legislation? I don’t know. It strikes me that people who had the basics covered would come at employment from a much stronger position. One to watch.
The various trials on basic income suggest that there would be lower costs for policing, and health. Difficult to budget those in at the beginning, but interesting to keep an eye on as the introduction took place.
There are of course, different schemes suggested around basic income. There was an interesting article in the Boston Globe this week about it, which references all kinds of different suggestions from across the political spectrum. Certainly it’s an idea which is coming more and more into the mainstream, and I’d love to hear other people’s ideas on how it could work, and why we should consider it.