Negative politics is easy. We all love to complain about how bad things are, and about what the government is doing wrong. Problems are ten a penny. It’s a little bit more difficult to be positive and offer up ideas for solutions. In this post, instead of complaining about the lack of big ideas for positive change I want to talk about one of the few big ideas that is floating around. The Green Party’s Citizen’s Income literally is a BIG idea - a Basic Income Guarantee (BIG).
The Citizen’s Income is an unconditional, non-withdrawable income payable to each individual as a right of citizenship. At first mention, it seems a ludicrous idea. How could it possibly be affordable? Who would pay for it? Why would people bother working? The answer to these questions might surprise you.
How could it possibly be affordable? There are currently hundreds of different ways in which the government distributes payments: tax reliefs, benefits, tax credits, pensions, child support and many others. The vast majority of these would be replaced by the Citizen's Income. It would vastly simplify people's lives, whether they be benefits claimants, tax payers or both. It would be cheaper to administer and would make sure no-one slipped through the net. The net cost, once we factor in the transfers being removed, is actually very small.
Who would pay for it? That depends a lot on how it's implemented. Done carelessly, lots of people on low to middle incomes could be worse off. But with a little attention, the scheme can be designed to make sure this is not the case. The main group that would have to pay more would be those on salaries above £150,000. They and their employers would have to pay more in National Insurance contributions. For most people, these contributions are essentially Income Tax, so I'm personally comfortable with removing a tax break for the highest earners in our society.
Why would people bother working? It seems daft, doesn't it? Yet when a scheme of this type was tried in Canada, there were only two groups of people who worked less - new mothers and teenage high-school/college students. I think that most of us would be comfortable with people in those categories prioritising other activities over work. All other groups showed zero or positive impact on hours worked. When every hour you work makes you better-off, and there is no benefit trap, the incentive is clear.
The Scottish Greens are not the only people who think that the Citizen's Income is an idea whose time has come. Several towns in Holland, led by Utrecht, are planning to trial it in the near future. They are thinking BIG and we should join them.