On Thursday, midway through the first Leaders Debate to mark the start of the short campaign for the upcoming Scottish Parliamentary Election, Scottish Greens co-convenor Patrick Harvie said something that made my heart sing.
I’ve been a fan of the concept of a Citizens Income (also known as a Universal Basic Income) since I first encountered the idea studying economics at university but given the lack of support for the idea from mainstream political parties or coverage from corporate media, most people probably won’t have heard too much about it.
Nonetheless, it’s an idea that is gaining traction as countries such as Canada, Finland, the Netherlands, Switzerland and Argentina and with an engaged and progressive electorate who are opposed to austerity, Scotland could easily be next to embrace it.
So What’s the Big Idea?
Theoretically, in a conventional welfare state like we have in Britain, benefits are provided by the government to people who need them with a degree of means testing and different levels of benefit for people with different needs. This leads to a complex system of benefits which is very administration heavy, difficult to apply for and often very confusing, especially as the government will often change the level of and criteria for receiving a given benefit from budget to budget and actively frustrate people from receiving the benefits they should be eligible to receive.
This system also leads to the so-called ‘benefit trap’ where taking a low paying job results in an individual losing their right to benefits and ending up worse off.
In contrast to this labyrinthine system with its attendant stigmas (see the TV phenomenon of ‘benefit porn,’) a Citizens Income would provide a regular payment to every citizen, irrespective of their situation. This would be somewhat offset by removing the ‘tax free allowance’ on income tax so that tax would be payable on all income over and above the Citizens Income.
The Small Print
There is quite a lot of variety in how a Citizens Income can be applied.
Firstly, the level of the benefit is a question – does it vary by age (less for children and pensioners) and is it set at the equivalent of a living wage for adults or only a portion of that amount?
Secondly, does the Citizens Income completely replace the existing benefits system or would other situational or means tested benefits remain alongside the universal payment?
Essentially, there is a sliding scale between a very left wing implementation of a Citizens Income where it is paid at the equivalent of a living wage for all citizens and it would be augmented by disability benefits etc. when appropriate as well as the rest of a fully functional welfare state such as free at point of use healthcare & education. The Green implementation of the Citizens Income would probably come as close to this vision as practicably possible.
On the other hand, it could be applied in an incredibly right wing way where the universal income is paid at a fraction of a living salary and the rest of the welfare state is dismantled, with no situational benefits paid, health, housing and education wholly privatized.
As such, it’s an idea that has support from all corners of the political spectrum, which is quite a novel thing in itself.
The universal nature of the Citizens Income would both eliminate the stigma attached to receiving benefits and vastly reduce the administrative costs associated with a traditional benefits system.
A Citizens Income would eliminate the ‘benefits trap’ as it would not be withdrawn when individuals entered paid work, so it would always be beneficial to be in work.
A Citizens Income would help to support those who undertake vital work which is not paid or valued in a capitalist society such as carers and parents as well as those in creative industries and other areas were work is undertaken on an inconsistent or freelance basis.
A Citizens Income would have a positive effect on the health of the nation – in physical, mental and social terms – by removing the anxiety about poverty which results in addiction, exacerbates mental health issues and creates an atmosphere of tension and violence.
Properly implemented, the Citizens Income would virtually eliminate poverty and be a big step towards a more equal society.
The Citizens Income should stimulate the economy by putting money into the hands of those most likely to spend it in the real economy (see marginal propensity to consume) while also increasing the tax base by removing the tax free allowance and making it easier for people to get into paid employment.
Naturally, making a payment (even a partial one) to every citizen would be a very expensive undertaking, requiring an increased tax burden on those who work.
There are concerns that market forces would respond to the increased amount of money in the real economy by raising prices which would negate the benefits of the Citizens Income.
A Citizens Income could be used as an excuse to dismantle the rest of the welfare state.
There are those that argue a Citizens Income would result in the majority of people not bothering to look for work and be happy with a life of indolence.
I believe that the advantages of a Citizens Income vastly outweigh the cons although there are clearly areas where the policy would need to be carefully implemented in order to be both economically viable and provide the maximum social and economic benefit.
I may be biased (I am TOTALLY biased) but it seems to me that the arguments against a Citizens Income are largely the same that those of a right wing persuasion would make against any nationalized welfare or healthcare system or a policy such as a living wage or rent controls etc. It seems to me that the Citizens Income is almost the most salient example of a progressive economic policy which embodies the idea of ‘a rising tide which raises all boats.’
Image Credit: Originally from The Wren Project