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Editorials
To
the new Government: The 'Big Society'
The
Big Society is a society of personal autonomy: of choice
over family structure, labour market activity, and much
else. It is a society in which incentive translates into
success and in which rights mean responsibility.
Small
government is government which doesn't interfere in people's
family structures, in their labour market activity, or in
anything else much.
Our
means-tested and complex tax and benefits system is riddled
with rigidities and disincentives that deny us the choice
which the Big Society promises; and it embodies the kind
of interference in family structure and labour market behaviour
which big government is all about. The coalition partners
have said in their Programme for Government: 'We
will investigate how to simplify the benefit system in order
to improve incentives to work'; and the Government's consultation
paper on the future of the benefits system, 21st Century
Welfare (http://www.dwp.gov.uk/docs/21st-century-welfare.pdf),
recommends a 'Universal Credit' as the way to do that:
The
family's gross entitlement would depend on their circumstances.
Entitlements would be based on current benefit and Tax
Credit rules, with amounts for individuals, couples, children,
housing, disability or caring. The total would then be
reduced for earnings and other income to produce the net
amount payable. The credit would be payable to the household
member making the application. …. Such a structure
would remove much of the complexity that burdens the system
today. Crucially it would also create the platform for
tackling the current problems of high Marginal Deduction
Rates and low gains to work through reform of earnings
disregards and tapers. (p.19)
A
Universal Credit would be a step in the right direction:
but we suggest that the kind of major reform which the Big
Society requires should encompass both the benefits and
the income tax systems, because if tax allowances were changed
from allowances to cash payments of the same value, and
if only minor changes were made to the Universal Credit,
then a Citizen's Income would be the result: an unconditional,
nonwithdrawable income for every citizen. Such a Citizen's
Income would provide all of the advantages of a Universal
Credit along with substantial increases in simplicity and
efficiency (particularly in relation to transitions between
different labour market statuses); and, because a Citizen's
Income would take the individual and not the household as
its basis, it would free both households and the employment
market from significant rigidities and complexities. In
terms of the Big Society agenda, a Citizen's Income would
incentivize enterprise, promote family structure and labour
market choice, create the possibility of small government,
and provide the foundation for the Big Society, in ways
in which the Universal Credit would fail to do.
We
look forward to working with the new Government on this
important agenda, and as a first step would like to direct
policy-makers to the research note in this edition of the
Citizen's Income Newsletter.
In
the meantime: Please don't means-test or tax Child Benefit.
It's the only benefit we've got which represents the Big
Society.
Universal
provision
Research
by the Fabian Society and published by the Joseph Rowntree
Foundation shows that people in this country are not particularly
unhappy about the level of income inequality, often exhibit
more negative attitudes towards those on low incomes than
they do towards the rich, support progressive tax and benefits
systems, wish to improve the life chances for disadvantaged
citizens, understand the social consequences of income inequality,
are not persuaded by arguments for greater equality, but
are persuaded by 'arguments for greater equality framed
in terms of fairer rewards for effort and contribution'
(www.jrf.org.uk/publications/attitudes-economic-inequality)
A
companion volume to the research published by the Fabian
Society suggests that 'as recent public outrage at attacks
on the NHS have shown, it is the boldest, the most inclusive,
and the most visionary policy solutions which command and
retain the strongest popular support. Policy-makers concerned
to secure greater economic justice have something to learn
from that' (Is Equality Fair? Ed. Tom Hampson and
Jemima Olchawski, The Fabian Society, 2009, p.40).
Research
which we publish here shows that a universalist social policy
can provide people with a fairer return on their effort
in the labour market. Here is a policy which answers precisely
to the two attitudinal criteria.
Research
note
A
possible Citizen's Income scheme tested for labour market
incentives
On
the 27th January the House of Commons Work and Pensions
Committee published a report, Decision making and appeals
in the benefits system (HC313, available at www.publications.parliament.uk/pa/cm200910/cmselect/cmworpen/313/313.pdf
)
The
last two paragraphs read as follows (italics in the original):
We
do not underestimate the difficulty of the task facing
decision makers across DWP's businesses. The complex rules
that govern the social security system increase the scope
for both customer and official error and the challenge
of decision making accuracy. We have previously recommended
that the Department establish a body to examine complexity
in the benefits system and this has been supported by
a number of organisations, including Citizens Advice.
We
reiterate a previous recommendation of this Committee,
that the Government should establish a Welfare Commission
to examine the existing benefits system and model possible
alternative structures with the aim of creating a fair
but simpler system that claimants and their representatives
are able to understand more easily and DWP staff are able
to administer more accurately.
But
of course it isn't just the DWP's section of the benefits
system which is too complex: it is also Tax Credits, administered
by HMRC, which complicate the financial affairs of large
numbers of working households.
We
wanted to test whether it is possible to revise the tax
and benefits system in such a way as
- to
increase employment incentives and make nobody worse off
for household gross earnings up to £750 per week
for families with children and up to £450 per week
for single adults without children;
- to
reduce administrative complexity considerably by scrapping
Working Tax Credits and Child Tax Credits;
- and
to do by it making as few other changes as possible to
the current system.
The
method:
We
took three family types:
- Single
adult, no children, local authority tenant (working 40
hours per week)
- Lone
parent, two children under 11, local authority tenant
(working 16 hours per week)
- Couple,
with two children under 11, private tenant (working 40
hours per week)
We
have used the spreadsheet employed by the Department for
Work and Pensions to construct their Tax Benefit Model tables
to calculate net incomes after housing costs for gross earnings
between £20 and £1,200 per week for a variety
of schemes for each of the household types a) to c) and
have compared those net incomes with net incomes under the
current system. The housing costs assumed in these calculations
are £58 for household a), £69 for household
b), and £138 for household c).
The
scheme which provides the closest fit with the criteria
1) to 3) above is as follows:
We
have scrapped Working Tax Credits and Child Tax Credits
and replaced them with Citizen's Incomes of £60 pw
for each adult and £31.59 pw for each child (effectively
an increase in Child Benefit of £31.59 p.w.). (A Citizen's
Income is an unconditional, nonwithdrawable income paid
to each individual as a right of citizenship)
Income
tax is collected on all earned income as follows:
From
£0 to £20,000 pa, 20%
From
£20,001 to £40,000 pa, 35%
Above
£40,000 pa, 40%
We
have removed the Lower Earnings Limit for National Insurance
Contributions, and also the Upper Earnings Limit (but see
below). This means that National Insurance Contributions
as well as Income Tax is charged on all earned income, not
just on that above the Lower Earnings Limit).
We
have reduced the Housing Benefit taper from 65% to 40%
The
graphs show the results. The steeper curve resulting from
the revised scheme indicates higher employment incentives,
particularly for the couple with children.
(Note
that because this project is only about households containing
wage-earners working specified numbers of hours and a National
Minimum Wage is paid, the first £232 of the gross
earnings range can be ignored in the case of the couple
and the single adult, and the first £93 for the lone
parent.)
All
three graphs show net income under the revised system diverging
from net income under the current system as gross earnings
rise towards the right hand side of each graph. This is
because for the purpose of the project we have removed the
National Insurance Contribution Upper Earnings Limit so
11% National Insurance Contributions are now paid on all
earned income.
A
political decision will be required to determine whether
and where a new Upper Earnings Limit should be established.
If there is no Upper Earnings Limit then the revised scheme
will save money. If a low Upper Earnings Limit were to be
established then the scheme would cost money. Somewhere
along the gross earnings range there will be an Upper Earnings
Limit which will enable the revised scheme to break even.
The
Chancellor will therefore have available a simple mechanism
for regulating the cost of the scheme.
Conclusion
By
replacing tax credits with a Citizen's Income, and by making
a few other minor changes, the tax and benefits system can
be amended to increase employment incentives across substantial
earnings ranges for a variety of household types.
We
hope that by offering this indicative scheme we shall encourage
research into further options: into their effects on net
income for different family types; into their consequences
for labour market behaviour; and into their redistributive
characteristics. The scheme studied here increases substantially
the net income of employed couples with children across
part of the income range, so either additional funding would
be required (somewhat unlikely in the current economic climate)
or significant redistribution would need to be acceptable.
There might be feasible schemes which would offer the virtues
of the scheme discussed here at the same time as increasing
net income for all house-hold types by lower amounts, and
there might be feas-ible schemes which would fulfil our
criteria and which would save money. Such schemes would
clearly be of interest to a Government attempting to reduce
costs.
What
is now required is a great deal more research on different
household types and on a wide variety of different Citizen's
Income schemes. Of particular interest would be the net
income effects on non-earning households as they make the
transition from unemployment into part-time or full-time
employment.
The
graphs:
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We
are grateful to the Department for Work and Pensions for
providing us with the spreadsheet which they use to calculate
their Tax Benefit Model Tables (http://statistics.dwp.gov.uk/asd/asd1/tbm/TBMT_2009.pdf)
Obituary:
Charlotte Markson
Charlotte
Markson, a Citizen's Income Trust trustee since 2006 and
often a source of valuable advice before that, died on the
31st July after a long battle with leukemia.
Charlotte
worked for Citizen's Advice, the national organization which,
among other services, provides the summaries of legislation
and regulations on which Citizen's Advice Bureau workers
rely when they advise members of the public. She was one
of the few people who understood the tax and benefits system,
both in its structure and in its detail, and we shall sorely
miss her expertise.
Charlotte
will be missed far more by her partner Geoffrey, and by
her mother and brother, and we extend to them our heartfelt
condolences.
News
The
Prime Minister has appointed Frank Field, a former
Labour minister, to chair a Review on Poverty and Life Chances.
Mr. Field writes in the Daily Telegraph (5th June):
'There is … a pressing need to rethink our approach
to poverty, and to the state. … If the review is successful,
the debate over poverty will give way to a dynamic approach
that looks at how we ensure that each individual is able
to achieve their best self.
The
National Association of Pension Funds has suggested
that a 'new state Foundation Pension should be created,
combining the current basic state pension and state second
pension. This would be worth £8,000 a year, around
a third of pre-retirement income for someone on median earnings.
It would give pensioners an additional £25 a week
in income and take around 2 million pensioners out of means
testing. It would provide a solid floor on which to provide
workplace pensions'. (www.napf.co.uk)
In
recent research reported in Social Policy and Administration
Peter Taylor-Gooby and Rose Martin show that in Germany
and the UK different social security regimes result in real
differences in perception: 'the analysis shows that while
respondents in both countries value equality of opportunity
as a normative principle, those in Germany are much more
likely to argue that an equal opportunity approach requires
government to guarantee equal access to basic services.
They are also more likely to express concerns about market
freedoms which allow those who can afford it better access
to health care and education. Real differences in welfare
values remain, loosely following differences of regime type,
despite the greater emphasis on activation and individual
responsibility across European welfare states.' (Peter Taylor-Gooby
and Rose Martin, 'Fairness, Equality and Legitimacy: A Qualitative
Comparative Study of Germany and the UK', Social Policy
and Administration, vol.44, no.1, February 2010, pp.85-103)
Senator
Eduardo Suplicy of Brazil reports that the Partido dos
Trabalhadores (PT) held its fourth National Congress
in February and that delegates unanimously approved the
following as part of the Presidential Program of Mrs. Dilma
Rousseff who was acclaimed the PT's Presidential candidate
in 2010: '... transition from the Bolsa Família Program
to the Citizen´s Basic Income - CBI, unconditional,
as a right of everyone to participate in the wealth of the
nation, as foreseen in Law 10.853/2004, an initiative by
PT, approved by all parties of the National Congress and
sanctioned by President Luiz Inácio Lula da Silva
on January 8th, 2004'.
In
its Socio-Economic Review for 2010: An Agenda for a new
Ireland - Policies to ensure economic development, social
equity, and sustainability, the think tank Social
Justice Ireland offers ten reasons for implementing
a Citizen's Income: 'It is work and employment friendly;
it eliminates poverty traps and unemployment traps; it promotes
equity and ensures that everyone receives at least the poverty
level of income; it spreads the burden of taxation more
equitably; it treats men and women equally; it is simple
and transparent; it is efficient in labour-market terms;
it rewards types of work in the social economy that the
market economy often ignores, e.g. home duties, caring,
etc.; it facilitates further education and training in the
labour force; it faces up to the changes in the global economy.'
The report recommends that the Irish Government should move
towards introducing a basic income system. All initiatives
in the areas of income and work should constitute positive
moves towards the introduction of a full basic income guarantee
system.' (http://www.socialjustice.ie/content/agenda-new-ireland-full-text)
Conference
report
Montreal
Conference a BIG Success
By
Jim Mulvale, BIEN Canada
On
the 15th and 16th April a conference was held in Montréal,
Quebec, entitled Basic Income at a Time of Economic Upheaval:
A Path to Justice and Stability? The event was organized
by the Centre de Recherche en Éthique de l'Université
de Montréal (CREUM), in cooperation with BIEN Canada
and the USBIG Network. The event attracted almost a hundred
participants from North America and Europe, including a
number of people who had not previously attended Basic Income
conferences or meetings.
The
highlights of the conference included presentations by Dr.
Louise Haagh of the University of York (UK) on 'Basic Income
and Public Finance', by Dr. Guy Standing, University of
Bath, on 'Basic Income for the Precariat', and by Senator
Eduardo Suplicy (São Paulo, Brazil) on 'Steps Towards
a Citizen's Basic Income'.
A
'political panel' featured speakers from Quebec, Canada
and the United States who focused on political openings
and challenges for achieving BI in North America. The panel
consisted of Amélie Chateauneuf, spokesperson for
the Front Commun des Personnes Assistées Sociales
du Québec (FCPASQ); Tony Martin, Member of Parliament
and poverty critic for the New Democratic Party; Rob Rainer,
Executive Director for Canada Without Poverty; Al Sheahen,
long-time activist with USBIG; and Canadian Senator Hugh
Segal. The panel was chaired by Sheila Regehr, Director
of the National Council of Welfare of Canada.
Other
sessions at the conference addressed Education for a BIG
Society (Sally Lerner), Pragmatic Guaranteed Income Architecture
for Canada (Rob Rainer and Jim Mulvale), Exporting the Alaska
Model (Karl Widerquist), the Ecological Imperative for a
BIG (Anita Vaillancourt, Gianne Broughton, and Michael Howard),
Economic Crisis and Income Security (Chandra Pasma, James
Bryan, and Philip Harvey), Basic Income funded through Common
Assets (Gary Flomenhoft), Basic Income and Consumption Tax
(André Presse), and Geonomics (Jeffrey Smith).
A
pre-conference workshop was also held, which featured three
excellent presentations:
- Sandra
Gonzalez-Bailon, University of Oxford, 'Labour Behavior,
Basic Income and Social Influence: A Simulation Experiment'
- Evelyn
Forget, University of Manitoba, 'Canada's Experiment with
Social Justice: Using health Administration Data to Assess
the Outcomes of a BI Field Experiment' (based on the Mincome
Project that ran Dauphin, Manitoba in the 1970s)
- Guy
Standing, University of Bath, 'Basic Income Pilot Schemes:
Ten Imperatives for Design and Evaluation'
Full
details of the program can be found at http://bigmontreal.wordpress.com/
Papers
from the conference will be posted on the website of USBIG
in the near future:
http://www.usbig.net/
A
huge vote of thanks goes to Jürgen DeWispelaere, currently
a Senior Research Fellow at CREUM (and also Co-Editor of
Basic Income Studies) who took the lead role in planning
and organizing this conference. Thanks also go to Jürgen's
colleagues at CREUM for financial, practical and logistical
support for this event.
BIEN
Canada and USBIG are planning future joint events, building
on the strong interest in, and excellent programme of, this
conference in Montreal.
Reviews
Tony Salter, Andrew Bryans, Colin Redman
and Martin Hewitt, 100 Years of State Pension: Learning
from the Past, Institute of
Actuaries, 2009, vi + 266 pp, pbk 1 903 965160 , £16.95
2008
was the centenary of the Old Age Pension Act 1908, which
established the first state pension: an income-tested non-contributory
pension for everyone aged over 70. The Institute of Actuaries
and Tony Salter and his colleagues are to be congratulated
on a book which celebrates that centenary and which more
than fulfils the promise of its title.
The
history of state pensions is recounted: the failure of the
Poor Law of 1601 and the Poor Law Amendment Act of 1834
to relieve old age poverty; Lloyd George's 1908 Old Age
Pension Act; the growth of contributory pensions for various
groups between the wars; Beveridge's report and the National
Insurance Act 1946; the persistence of means-tested pensions
in a context of low national insurance pensions; earnings-related
contributory state pensions; contracting out of the earnings
related pension; the equalisation of state pension ages;
winter fuel payments; and the Minimum Income Guarantee and
the Pension Credit. The chapters are full of historical
and financial detail, and the discussion of state pensions
takes place where appropriate in the context of discussion
of occupational and private pension provision.
Chapter
12 is entitled 'Learning from the Past' and sets out from
the important statistic that the current basic state pension
is worth less today as a percentage of average earnings
than it was when the first old age state pension at 5s (25p)
per week was paid to the first pensioners on the 1st January
1909. It also sets out from the question as to the extent
to which it is the state's role to ensure adequate social
pension provision for the elderly (p.173).
The
authors express concern that 40% of current pensioners could
qualify for the means-tested Pension Credit, that this percentage
could increase, and that up to 1.8m pensioners who could
claim Pension Credit don't do so because of 'the complexity
of the claiming process and the stigma associated with being
dependent on state benefit' (p.178). As for current rates,
the basic state contributory pension provides an income
of below 16% of average earnings (p.178). The authors are
also disturbed by the increasing income gap between pensioners
with private pensions funded by contributions on which tax
relief has been granted, and pensioners reliant on means-tested
Pension Credit. To provide a universal pension at the same
rate as the threshold for means-testing would cost only
one third of the cost of tax relief on private pension contributions.
The
authors believe that 'the basic state pension ….. should
continue to be the bedrock of pension policy' (p.183) and
they discuss the feasibility of providing a universal basic
state pension. Such a universal and unconditional pension
would mean that pensioners would retain the benefit of their
savings, thus making it more likely that people would pay
for private pensions.
The
book closes with some helpful outlines of the main legislation
on state pension provision since 1908, a history of the
National Insurance Fund (with income and expenditure accounts
from 1949 to 2008 and projections to 2013), a profile of
William Beveridge, Great Britain population profiles from
1901 to 2001 (and estimates to 2081), statistics on life
expectancy and income distribution, and a good index.
This
book is essential reading for anyone interested in the history
and possible futures of the state pension in the UK. If
policy-makers were to take its lessons to heart then perhaps
the next time a Pensions Commission recommends careful study
of a Citizen's Pension (as the Pensions Commission did in
2005) there might be more chance of government ministers
understanding why that would be a good idea.
Mick
Carpenter, Belinda Freda and Stuart Speeden (eds), Beyond
the workfare state, Policy Press, 2007, viii + 192
pp, pbk, 1 861 348722, £19.99, hbk 1 861 348739, £60
Part
I of this evidence-based approach to labour market exclusion
reports on case studies in labour market discrimination
and inequalities. As we read these reports of qualitative
and quantitative research amongst discriminated-against
groups and in disadvantaged communities, a consistent message
emerges: active labour market projects simply designed to
get people into employment as quickly as possible serve
neither the economy nor clients' long term interests. What's
needed are better entry-level jobs and solutions to structural
inequality and discrimination in employment. Transition-focused
approaches lead to just that: brief transitions into the
labour market. A broader approach which promotes individuals'
autonomy and capabilities, which values their ability and
right to make decisions as to whether to enter the labour
market and if so how, and which removes disincentives to
labour market entry, is recommended.
In
part II some detail is added to the prescription. First
comes a history of New Labour policy. In the early years,
enhanced childcare provision, tax credits, and a fairly
gentle 'active labour market' approach, along with improvement
in economic conditions, led to a fall in unemployment. Then
the fall slackened, and deindustrialised areas in particular
continued to record high unemployment rates. Then sanctions
increased and a target-driven approach experienced diminishing
returns and a substantial transfer of claimants from Jobseekers'
Allowance to Incapacity Benefit.
The
final chapter outlines a 'capabilities and human rights
approach'. 'Capabilities' are human 'functionings' within
and outside the formal labour market, and they include what
people value doing; and the rights relate to the
provision of well-rewarded good work, to greater equality,
and to a better work-life balance.
When
you read this book you should start with chapter 2 and read
chapter 1 last. Chapter 1 is called an 'introduction' but
actually it's the 'conclusions' chapter. It really ought
to have been at the end of the book.
The
editors conclude that a top-down welfare-to-work regime
exhibits diminishing returns, but that the type of employment
reintegration which works is characterised by local discretion,
flexibility, the ability to work outside bureaucratic structures,
and 'a voluntary rather than a sanction-based relationship
between project workers and service users in which power
to act fundamentally rested with the latter' (p,4). Such
an alternative approach is particularly needed for people
for whom short-term skills enhancement currently leads to
insecure low-skill employment which offers little economic
improvement compared to a life on benefits.
The
editors find a significant contradiction at the heart of
workfare approaches: 'External surveillance and sanctions,
and encouragement to internal motivation and effort' (p,5).
Their view is that 'genuine empowerment can only come from
freely exercised choice, and .... this .... is the only
realistic and socially just way of tackling labour market
exclusion' (p.6). They ask for a 'human capital' approach
which addresses such problems as benefit traps. This
is the way to improve excluded groups' relationship with
the labour market, not sanctions. According to the evidence,
a capabilities and human rights approach works.
A
Citizen's Income gets a mention, but only as a possibility
of freedom from the labour market which might lead to the
meeting of community needs (p. 165). A Citizen's Income
would also, of course, address one of the barriers to a
capabilities and human rights approach: benefit traps. By
reducing marginal deduction rates a Citizen's Income would
make employment pay, and it would make it more feasible
for people to decline low-wage poor-quality employment,
thus improving employment, increasing low wages, and ensuring
that net incomes would increase as earned income rose.
This
book contains important evidence and relevant conclusions,
and everyone interested in labour market participation should
read it.
Pat
Devine, Andrew Pearmain and David Purdy (eds), Feelbad
Britain: How to make it better, Lawrence and Wishart,
2009, 250 pp, pbk 1 905 007936, £14.99
'The
struggle to replace neoliberalism, at national and global
levels, is what the politics of the next ten years will
be about, just as the Great Crash of 1929 and the Great
Depression that followed it prompted an urgent search for
workable alternatives to the discredited economics of laissez
faire' (p.8).
The
authors recognise that after so many years of a neoliberal
New Labour it will take a long time for the democratic left
to turn itself into a political force. This book is designed
as a first step in the direction of that important task.
Chapter
1 outlines our current economic, social and political crisis.
The dominant theme under both Conservative and New Labour
governments has been 'the deliberate extension of market
forces into all aspects of social life' (p.24), and the
authors outline the 'social malaise' which has been the
result. Two of the subheadings say it all: 'New Labour:
Consumer Thatcherism' (p.54) and 'What on earth is to be
done?' (p.63). The editors' answer is 'a sustainable post-capitalist
world' (p.65) which takes the danger of climate change seriously
and is characterised by a combination of 'social equality
and human solidarity' and by 'positive freedom and democratic
self-government' (p.66).
In
relation to the need to restrain growth in a context of
resource depletion the editors recommend the dismantling
of the current work-income nexus and a Citizen's Income
as a means of achieving that.
Subsequent
chapters unpack the ideas outlined in chapter 1: Citizen's
Income, social ownership and democratic planning, a work-life
balance tilted more towards time for collective, private
and public activities, a renewed democracy, the NHS, schools
as places of genuine education, and reducing the demand
for energy (which is consistent with a post-consumerist
work-life balance). All of the detailed chapters, except
for that on the NHS, recommend practical policy aimed at
the new kind of society envisaged by the first chapter.
In
the closing chapters Antonio Gramsci's Prison Notebooks
inspire a call for real political debate (as opposed to
the current 'ephemeral quarrels and personal clashes').
The undermining of the feminist critique by a superficial
empowerment of women is lamented, hope is located in the
broad left agenda of many card-carrying Greens (p.233),
and David Purdy wonders whether left-leaning elements both
inside and outside mainstream political parties might be
able to work together to create a new political landscape.
It's
a pity that the book has neither index nor bibliography,
and, more importantly, no contribution from Compass or the
Fabian Society. However, the authors are to be congratulated
on creating a coherent theoretical and practical platform
which will inform the political debate that we need to have
in this new era of coalition government.
Irene
Dingeldey and Heinz Rothgang (eds.), Governance of Welfare
State Reform: A Cross National and Cross Sectoral Comparison
of Policy and Politics, Edward Elgar, 2009, vi +
263 pp, hbk 1 84720 143 0, £65
The
editors of this diverse and interesting collection of essays
have focused on three questions:
- 'How
are policies and regulatory structures changing?'
- 'How
are the reform processes in different policy areas or
countries being shaped?'
- 'Are
there signs of convergence or divergence across different
welfare state types?' (pp.1,2)
All
three questions are about 'governance', which the editors
take to mean 'all existing forms of collective regulation
of societal matters, from those based on the state to those
based solely on civil society', thus encompassing both the
structures of the system and the processes by which activity
is regulated and controlled.
Rothgang
(ch.2) finds increasing complexity in healthcare systems
in Britain, Germany and the USA. The basic characters of
the different systems haven't changed, but increasing diversity
within each system is leading all of them towards greater
hybridity. Hippe (ch.3) finds a similar process occurring
in pension provision, thus supporting 'the hybridisation
hypothesis, which predicts convergence towards mixed regulatory
frameworks based on market mechanisms that stress individual
responsibility as well towards social policy structures
that promote collective responsibility' (p.64). Dingeldey
(ch.4) finds that the promotion of employability is central
to the labour market policies of Denmark, the UK and Germany,
and that therefore state intervention in this field is increasing
rather than decreasing. Martens and Jakobi (ch.5) study
the OECD's contribution to the formation of education policy
in its member countries and conclude that the organisation's
impact is now considerable, and they take this finding as
an indicator of the growing influence of such international
organisations. Starke and Obinger (ch.6) find that, in many
of the same countries, welfare states are converging in
relation to a number of indicators: not in a 'race to the
bottom', as some have suggested, but more often in an 'upwards'
convergence.
Thus
the first section of the book employs research on particular
policy areas in order to understand general trends. The
second part reverses the process, and asks about the impact
of the processes identified on particular policy areas:
health, pensions, the labour market, and education.
An
interesting point about Gerlinger's discussion of changes
in health insurance systems in Germany, Switzerland and
the Netherlands (ch.7) is that the UK couldn't have been
compared in the same way because the universal NHS avoids
the need for state regulation of health care insurance.
It might have been worth mentioning this. Bonoli's chapter
(ch.8) on trade union involvement in pension reform in Sweden,
France, Switzerland, Italy and Germany contains an important
lesson for policy-makers: that system change requires deep
involvement by such stakeholders. In chapter 9 Cox studies
labour market reform in a variety of countries and finds
that, where new ideas have been persuasively championed
by political parties, coherent reform has taken place; but
that where political parties have resisted change, the outcome
has been policy drift. In this latter case the result will
be that the inevitable adjustment to new ideas will lead
to more public discord than it might otherwise have done.
Klitgaard finds that greater knowledge of other countries'
educational policies and their outcomes is causing considerable
convergence between different countries' education policies.
The
editors offer a final concluding chapter which draws together
the conclusions of the different chapters into a picture
of continuing diversity within which a few trends are identifiable,
and in particular 'a withdrawal of the state from service
provision and a simultaneous extension of the state's responsibilities
for guaranteeing the delivery of an access to services'
(p.250).
We
draw another conclusion. A five page discussion of the Netherlands
pension system (pp.52-7) gives four lines to the residence-based
flat-rate Citizen's Pension and five pages to the funded
industry-based sector. The internal governance of Britain's
NHS is discussed but not its universal provision, which
really ought to have been compared with insurance-based
healthcare systems. The UK's Child Benefit doesn't get a
mention, even where it would have been highly relevant (e.g.,
pp.75-7). The editors and authors clearly regard universal
provision as not worth discussing, yet it has been a highly
successful welfare system in its own right. It has low administrative
costs, it doesn't contribute to labour market inflexibilities
and disincentives, and it doesn't disincentivise saving
for old age. So here is a hypothesis: Universal provision
is so successful when implemented that it creates no problems.
It is problems, not successes, which demand the attention
of policymakers and academics, so universal provision drops
off the policy agenda and therefore isn't considered as
an option when welfare reform options are discussed.
We
would be interested to hear our readers' responses to this
hypothesis, and suggestions as to how we might solve the
dilemma.
Tim
Horton and James Gregory, The Solidarity Society: Why
we can afford to end poverty, and how to do it with public
support, The Fabian Society, 2009, xxxiii + 271
pp, pbk 0 716 341109, £12.95
This
splendid result of a research project inspired by the centenary
of Beatrice Webb's Minority Report of the Royal Commission
on the Poor Law will be of inestimable value to the new
Government.
The
first chapter shows how institutional detail affects public
attitudes to poverty prevention and thus the extent to which
poverty can be prevented; chapter 2 discusses the challenges
facing policy-makers (particularly an ageing population)
and shows that what is required is a new poverty prevention
strategy designed to achieve public support; and chapter
3 offers lessons from the past sixty years: the universal
NHS remains popular, targeted social housing isn't, and
the NHS serves poverty reduction far more successfully than
social housing does. The authors show that benefits policy
has shifted towards means-testing and thus towards negative
public assessment of people receiving benefits.
Chapter
4 shows how targeting on the poor means that, in the longer
term, poor people actually receive less, and that, paradoxically,
allocating on the basis of need isn't the best way to help
people in need. Preventing poverty 'is not about how we
spend our next pound bringing about the largest possible
reduction in poverty, but rather about getting the underlying
institutional design right' (p.98, their italics). If
the design is wrong, then the evolutionary path will be
wrong, and only a redesign of the system can correct that.
Chapter
5 offers the results of research on public attitudes to
welfare provision, and chapter 6 takes the lessons learnt
during that and previous chapters and recommends universalism
and integration as the guiding principles for welfare system
design. In the housing field the authors recommend full
dispersal and integration of social housing, bringing housing
assistance into a single system, and a spectrum of funding
methods between ownership and non-ownership.
For
tax and benefits they recommend turning tax allowances into
a flat-rate tax credit and then making it payable to all,
thus creating a Citizen's Income (which the authors call
a Basic Income). It is the third step in their plan which
then poses a problem, for they recommend that the credit
be paid on a household basis (p.163). This was suggested
by Steven Webb in Samuel Britten and Steven Webb, Beyond
the Welfare State: An Examination of Basic Incomes in a
Market Economy (David Hume Institute, 1990). It was
a mistake then, and it would be a mistake now. Quite apart
from the fact that a household basis would lose the administrative
simplicity of a Citizen's Income paid to each individual,
we know that people prefer income tax to be calculated on
the basis of the individual and so Horton and Gregory's
own criterion of public acceptability requires an individual-based
Citizen's Income and prohibits a household tax credit. In
addition, the household's employment pattern choices would
be improved by an individual-based Citizen's Income, so
in this respect too an individual-based Citizen's Income
would prevent poverty more effectively than a household
benefit. Any government which decides to implement the report's
suggestions therefore needs to stop at the individualised
Citizen's Income and not transfer it to a household basis.
Similarly,
the authors' suggestion of a participation income also needs
to be resisted. The casework approach required by this policy
would render it socially unacceptable, which on its own
would suggest that the authors ought to have resisted the
idea. Also, the money saved by refusing the benefit to a
tiny proportion of the population would be far less than
the additional administrative costs of monitoring everyone.
The authors correctly recognise the NHS to be a primary
model for welfare policy because its unconditionality results
in positive public assessment of those it serves and of
the service itself. The same would be true of a Citizen's
Income, and for the same reason.
The
report's final chapter asks for a new welfare contract based
on reciprocity. Here again, the authors haven't quite learnt
their own lessons. If the NHS is the public's favourite
part of the welfare state ( - and Child Benefit would, I
suspect, run it a close second, or even beat it into first
place), then it is universality, and not reciprocity, which
generates public approval and so ought to be the basis of
any new welfare contract.
It
is certainly time for a redesign, and this report contains
everything necessary for doing that. Now we need a second
edition which doesn't draw back from the lessons learnt
during the first few chapters. The evidence points towards
a welfare state founded on universal provision, with reciprocity
a consequence of universality and not as the system's hallmark.
The evidence points towards a Citizen's Income: universal,
unconditional, and paid to each individual - not to households.
Whilst
flawed, this report is a fine piece of work, and the authors
are to be congratulated.
Jane
Millar (ed.), Understanding Social Security,
2nd edition, Policy Press, 2009, xxii + 322 pp, pbk, 1 847
421869, £21.99, hbk 1 847 421876, £65
Howard
Glennerster, Understanding the Finance of Welfare,
2nd edition, Policy Press, 2009, xvii + 245 pp, pbk, 1 847
421081, £21.99, hbk 1 847 421098, £65
Both
of these are text books in the Policy Press's Understanding
Welfare series.
The
first is an edited collection, with different authors tackling
a variety of aspects of the benefits system: foundation
and contexts, lifecourse and labour markets, and users and
providers. This is a 'second edition', but not every chapter
has been brought as thoroughly up to date as it might have
been. For instance: chapter 2, on 'social security: reforms
and challenges', discusses the Fowler reviews of the mid-'80s
and the Commission on Social Justice of 1994 but fails to
mention the Pensions Commission which reported in 2005 and
2006 or the Work and Pensions Select Committee's report
Benefits Simplification of 2007, both of which are
arguably as significant in policy terms. (The Commission
gets a mention later in the book).
In
her chapter 'From cradle to grave' Karen Rowlingson discusses
a Citizen's income as a possible future reform and perhaps
accidentally expresses an important inconsistency which
too frequently characterises debate of this option: 'There
would be no direct disincentive to work and/or save, as
individuals would keep the basic income even if they earned
or saved large sums of money. However, it is argued that
if basic income payments were set at a level to cover people's
needs there might be no incentive for people to work at
all' (p.145). Again, in relation to options for the future,
it's a pity that neither the Pensions Commission's recommendation
of a Citizen's Pension nor the Pension Policy Institute's
detailed research on this option gets a mention.
We
hope to see a third edition of this excellent resource in
which a series of options for reform get chapters of their
own, so that future policy makers can think through the
feasibility and desirability of different ways of reforming
the tax and benefits system.
In
the second of the books under review, a single author discusses
the wide variety of ways in which different social provisions
are funded. For instance, the chapter on income security
discusses private insurance, the cost of income maintenance,
particular fiscal instruments (and particularly tax credits
and tax allowances), work and savings incentives, the funding
of pensions, and the state's role in income replacement
and poverty relief. In relation to the funding of pensions,
New Zealand's universal pension is discussed.
Both
of these books are well written, comprehensive and attractive
text books which will provide students of social policy
with a good grounding in the UK's social security system
and in the financing of that system and of other social
provision. They are essential reading not only for students
who might in the future make social policy but also for
those who make policy today.
Orsolya
Lelkes and Holly Sutherland (eds), Tax and Benefit Policies
in the Enlarged Europe: Assessing the Impact with Microsimulation
Models, Ashgate, 2009, 214 pp, pbk, 0 7546 7848
9, £35
For
forty years Tony Atkinson has been at the forefront of tax-benefit
modelling, and for over twenty years Holly Sutherland has
been deeply involved in the development of tax-benefit models.
It is a remarkable story of persistence and hard work in
an important cause: the discovery of the effects of current
and proposed tax and benefits systems, not just in the aggregate,
but for individual households; and not just in theory but
in relation to how money is actually earned and spent in
the real world.
The
immediate reason for the publication under review is the
extension of the tax-benefit modelling software EUROMOD
from a model built to handle the tax-benefit systems and
datasets for the fifteen countries which constituted the
European Union until 2004 into a version which can handle
the systems and datasets of nineteen countries and soon
of all twenty-seven of the current member states. Given
the complexities of the twenty-seven different systems involved,
and the added complexity of different datasets available
for each member state, this is really quite a remarkable
achievement. Those of us who were impressed at the way in
which the early POLIMOD could process the UK's Family Expenditure
Survey data to tell us the difference which a change in
a benefit level or in the structure of the benefits system
would make to actual net earnings in a particular earnings
decile can only marvel at software which will soon do that
and more for all twenty-seven EU countries.
But
to get back to the book: The first two historical chapters
close with plans for the future which include the use of
a Eurostat dataset rather than household surveys differently
organised in different countries, and further expansion
of the number of countries around the world which are now
using modelling software based on EUROMOD's structure. Then
follow chapters which employ EUROMOD to study the effects
of current tax-benefit systems on net incomes in nineteen
EU countries, the effects which proposed flat tax schemes
would have in Estonia, Hungary and Slovenia (the costs of
the changes would be borne by lower income groups), the
effects of alternative tax-benefit proposals on child poverty
in Poland, the effects of reforming child allowances in
Lithuania, and the effects of replacing in-work benefits
with a revenue-equivalent tax-free labour income. (This
chapter takes into account the likely effects of the current
and proposed systems on labour market participation and
finds that a tax-free labour income would increase labour
market participation.)
The
final chapter suggests that the payoff of the considerable
investment which tax-benefit models represent should be
maximised by making them as accessible as possible to a
wide range of users. We can only agree.
The
authors are to be congratulated on a most useful book, but
even more on the model-building and research projects which
it's all about.
Martin
Evans and Lewis Williams, A Generation of Change, a Lifetime
of Difference? Policy Press, 2009, ix + 339pp, pbk,
1 847 423047, £24.99, hbk 1 847 423054, £65
Whether
you're an undergraduate studying social policy or a policy-maker
trying to understand income maintenance policy and its effects,
this book is a wonderful learning tool.
Social
policy makers often divide people into categories: one set
of policies and rules for children, another for working
age adults, and another for the elderly. Evans and Williams
take a rather different 'lifetime' approach, asking how
different policy regimes since the 1970s treat people's
entire lifecycles. To do this they take us to a theoretical
world in which the rules of a particular decade's policies
remain constant for an entire lifetime. The sets of policies
and regulations they choose are those in force in January
1979 (Old Labour), April 1997 (Thatcherism) and December
2008 (New Labour). The authors restrict themselves to policies
which directly influence income, and they achieve accessibility
in a complex field by studying five hypothetical families:
the Nunns (no employed), the Lowes (50% of median earnings),
the Meades (median full-time earners in 1979, 1997 and 2008),
the Moores (twice median earnings), and the Evan-Moores
(very high earners).
After
introductory chapters on how the welfare state and the economy
have changed during the past thirty years, each of the main
chapters takes one section of the lifecycle (childhood,
working age - here four chapters tackle different policy
areas - and old age) and asks how the three different sets
of rules would affect different hypothetical families. A
chapter on aggregate outcomes of the three different sets
of policies follows, and then a discussion of the Lifetime
Opportunities and Incentives Simulation (LOIS) computer
model. The final chapters use the model to show how the
three different policy sets would affect the hypothetical
families across their lifetimes rather than just during
particular parts of them.
The
book is packed with detailed results ( - particularly interesting
is the material on the effective marginal deduction rates
and the attendant work incentives which the different family
types experience under different policy regimes); and the
concluding chapter is equally packed with important detail,
and particularly the finding that taxation has become more
regressive. The authors' more general conclusion is that
the Meades are in much the same position as before; the
Moores have done 'very nicely, thank you' (p.312); and the
Lowes experienced serious losses between 1979 and 1997,
a partial recovery by 2008, and 'are now more firmly locked
into low-income lifetimes than they were in 1979 due to
a combination of risk and policy response' (p.314). A higher
risk of employment interruption and of means-tested benefits
not keeping up with average earnings means a worsening position
for low paid families.
This
is an important book: full of relevant research findings,
clear exposition, and judicious judgements. However, there
is one verdict which I think we must question: 'If a policy
lasts the term of a government unchanged it is unusual'
(p.3). This is surely not true of income maintenance policy.
Since the Elizabethan Poor Law we have divided people into
categories to which we have allocated different income maintenance
regimes; and since the Beveridge Report in 1942 income maintenance
strategy has been based on insurance benefits, means-tested
benefits (including tax credits), and a universal benefit
for children (originally Family Allowance, now Child Benefit).
The names have changed and the regulations have changed,
but the structure hasn't changed.
As
the authors recognise, today 'the losers and the gainers
are further apart than ever. A new architecture for financial
risk suggests new structures for sharing risk, and social
policy must respond accordingly' (p.315). The structures
haven't changed for nearly seventy years. Perhaps it's time
they did.
Martin
Powell (ed.), Modernising the welfare state,
Policy Press, 2008, x + 290 pp, pbk, 1 847 420398, £24.99,
hbk 1 847 420404, £65
This
edited collection examines the main changes to the welfare
state since New Labour came to power in 1997, and asks whether
the 'Blair legacy' of welfare reform constitutes a coherent
'modernisation' strategy across the different parts of the
welfare state. The editor's early verdict is that 'the term
['modernisation'] is rarely or poorly defined by government
or commentators, and it appears to have many different meanings,
which results in no generally accepted definition' (p.3).
This verdict is borne out by the final chapter's careful
analysis of the evidence and conclusions advanced in the
intervening chapters.
As
well as asking 'what?' change has occurred, the authors
also ask 'how much?', and the editor's analysis employs
a threefold understanding of policymaking: goals (overall
aims of policy-makers), techniques (how things are to be
done), and settings (e.g., the level of a budget). First
order change (in settings) happens all the time, second
order change (of settings and techniques) happens frequently,
but third order change (of goals, techniques and settings)
constitutes a paradigm shift and happens only rarely. Each
of the chapter authors asks whether paradigm shift has occurred,
and in health, housing, social security, social care, education,
criminal justice, risk, private welfare, choice, and conditionality
paradigm shifts are discovered (see table 15.3 on p.266).
(In their chapter 'social investment: the discourse and
the dimensions of change', Alexander Dobrowolsky and Ruth
Lister also find paradigm change, but for some reason this
has been omitted from table 15.3).
There
isn't space in this review to discuss the different chapters
in detail, but it is worth mentioning the conclusions of
chapter 4 on 'social security and welfare reform' by Stephen
McKay and Karen Rowlingson. 'The UK social security system
is a large, complex juggernaut that has grown in a largely
incremental way over at least the last century' (p.53).
(We couldn't have put it better).
Means
testing remains a key feature of the UK system ….
Radical change, or third order change …. is rare
in the social security system and 10 years of New Labour
have, in the main, failed to achieve such change. (p.53)
The
authors of this chapter construct a list of what they suggest
are third order changes: the commitment to end child and
pensioner poverty; the National Minimum Wage; asset-based
welfare; and the New Deal. Certainly putting the word 'poverty'
back on the agenda has been a major change, but all of the
changes in goals, techniques and settings are in quite circumscribed
areas of the system, all of them can be understood as developments
of existing trends, and none of them are unambiguously paradigm
shifts. The authors express some surprise that Labour's
second term didn't see more significant change.
The
reason is surely the perceived complexity of the problem.
Yes, every social policy field has its complexities, but
the complexity of the 'juggernaut' and ministers' relative
inexperience in this complex field mean that it is easier
to tinker than to create coordinated goal and technique
change across the system as a whole: which is why we are
still awaiting genuine paradigm shifts.
This
book deserves careful study and anyone interested in social
security reform should read at least chapters 1, 4, 8, 10
(pp.165-67), 12 and 15. Each of the chapters raises the
question 'What next?' and this is particularly the case
with chapter 4. Further work for the editor and authors
on what would constitute genuine paradigm change
in the social security system is required.
Can
the juggernaut be turned?
Ed
Wallis (ed.), From the Workhouse to Welfare: What Beatrice
Webb's 1909 Minority Report can teach us today,
The Fabian Society, 2009, v + 93 pp, pbk 0 716 341062,
£9.95
In
1909 the Poor Law Commission reported. A majority report
recommended services tailored to specific needs: sheltered
housing for the elderly, a welfare to work scheme for people
of working age, services for children, and generally a casework
approach to poverty amelioration with voluntary organisations
as major providers. This is very much the way the welfare
state went during the first half of the twentieth century
and in which it is now going again.
Beatrice
Webb's minority report argued that poverty had structural
causes and was not the fault of the poor, so what was required
was poverty prevention, not poverty amelioration
- and to do this a 'national minimum' was required: a national
minimum wage, and a national system of benefits for those
out of work to replace the locally organised Poor Law. The
Webbs (for the concept of the 'national minimum' was Sidney's
as much as Beatrice's) argued for services which didn't
discriminate between the poor and the non-poor, as only
universal education and health care could prevent
the conditions for a permanent pauper class.
It
was this vision which was finally enacted during and after
the Second World War and which underpinned the welfare state
during most of the second half of the twentieth century.
The
Fabian Society is to be congratulated on marking the centenary
of the minority report. The Webbs were early and influential
Fabians, so it is the minority report which is here celebrated;
but Nick Bosanquet, a cousin by marriage of Helen Bosanquet,
who contributed substantially to the majority report, not
only defends the majority report as appropriate to its time,
but also shows how it remains relevant. Sunder Katwala,
General Secretary of the Fabian Society, shows in his introduction
how it is often personal connections which influence policy
change (Beveridge worked as a researcher on the minority
report); Tim Horton provides a history and summary of the
minority report ('From the workhouse to welfare'), Roy Hattersley
suggests that equality is a necessary condition for freedom,
Sarah Wise tell us what it was really like in the Poor Law
workhouse, Jon Trickett relates how in 1905 Poor Law Guardians
refused help to families during a lock-out in West Yorkshire,
Dianne Hayter suggests that today's policy-makers could
learn from the way in which Beatrice Webb combined the roles
of researcher and campaigner, Jose Harris asks why the Webbs
didn't have the impact in their time that their researcher
William Beveridge had in his, Seema Malhotva discusses the
role of other Fabian women in fighting poverty, and Peter
Townsend applies the Webbs' methods to today's global poverty.
The book closes with a study guide, adverts for Fabian Society
publications, an application form for joining the Society,
and a direct debit form. This is all as it should be.
As
Nick Bosanquet suggests, virtue wasn't all on one side of
the debate, but it is surely right to remind us of that
debate and of its short- and long-term outcomes. One outcome
for which we are still waiting, of course, is a Citizen's
Income.
Kari
Melby, Anna-Birte Ravn and Christina Carlsson Wetterberg
(eds), Gender equality and welfare politics in Scandinavia,
Policy Press, 2008, xi + 244 pp, hbk 1 847 420664, £70
The
papers collected in this volume study the connections and
disconnections between understandings of gender equality
and policies aimed at gender equality in different Nordic
countries. Common to Nordic welfare states is a stress on
employment (the dual breadwinner model) and gender neutrality;
and still common are gender segregated labour markets and
women bearing a greater domestic and caring burden than
men. Two understandings of women's economic rights are at
work here: the right to an income from employment, and the
attachment of economic rights to caring responsibilities.
Of
particular interest to readers of this Newsletter
will be chapter 3 on married women's right to pay taxes.
The chapter charts increasing opposition to Denmark's gendered
tax system, the move to separate taxation of spouses' incomes,
and continuing gendered aspects of the system. In her postscript
Ruth Lister discusses homecare allowances and asks whether
they harm women's longer term labour market participation.
There
is much of interest in this collection, and particularly
the different discussions of parental leave in different
chapters. Unfortunately there isn't a thorough discussion
of social security benefits and the ways in which they are
and are not gendered. Perhaps another book?
Viewpoint
Stumbling
Backwards into the Future of Welfare
By
Bill Jordan
The
history of social policy is more of a winding country lane,
with poorly-signposted crossroads, than a majestic motorway.
Iain Duncan Smith's proposed radical welfare reforms, announced
on May 27, were very much in this tradition. But they conceal
the germs of an important innovation.
After
all, the social insurance principle was a stratagem by the
anti-democratic German Chancellor, Otto Von Bismarck, to
stymie the liberal opposition; and Lloyd George's embryonic
welfare state schemes of 1910 were opposed by trade unions
and friendly societies. Duncan Smith's proposals are a mixture
between increased conditionality and cuts, and the first
step towards a truly progressive integration of the tax-benefits
system.
In
an interview in the New Statesman on 29 October last
year, the controversial political philosopher, Slavoj Žižek,
referred to the idea of universal basic incomes (unconditional
sums for all citizens) as the only new idea from the Left,
but one which was doomed as 'the last desperate attempt
to make capitalism work for socialist ends'. Now it seems
that he was looking in the wrong direction; the economic
crisis has led the Conservatives towards this idea as the
technical fix for systems failures in means-tested benefits,
the poverty and unemployment traps.
Duncan
Smith's plan, outlined in a report by his Centre for Social
Justice in September last year, is to merge the present
complex conditions of elegibility for these benefits into
just two elements, and to ensure that they are withdrawn
consecutively rather than simultaneously. Together with
allowing claimants to keep a far larger proportion of their
earnings for work of less than 16 hours per week, this would
create a smooth withdrawal rate of 55 per cent as earnings
rise, and greatly improve incentives to take 'entry jobs'
in fragmented labour markets.
At
first sight, this has nothing to do with the grand principle
of ending means-testing which has informed the basic income
approach, and in the Duncan Smith version it is combined
with increased, not diminished, work enforcement. Worse
still, it is based on household, not individual entitlement.
Yet the decision to administer all benefits for poor people
of working age as parts of the tax system would be a necessary
first step to any basic income scheme, and one that no previous
government has been willing to take.
Advocates
of basic income have tended to approach the issues as ones
of political freedom and equality - as allowing all citizens
to enter labour markets and household arrangements on the
same (independent) basis. For this reason the idea has recently
appealed to Old Marxists like André Gorz, to analytical
socialists like Philippe Van Parijs, and to feminists like
Carole Pateman, as well as to liberals like Brian Barry.
The only parliamentary manifesto which contained its endorsement
was that of the Greens' Caroline Lucas.
All
of these expected progress to basic income to proceed along
the highway of 'decommodification', via an enlightened awareness
of the demands of justice in co-operation for the common
good, and for the future of the planet. Instead, the motives
for this crucial reform are far more closely related to
the analyses by the High Tory, Hermione Parker.
She
focused on the self-defeating features of the interactions
between the onset of taxation and the withdrawal of benefits,
which were only partly mitigated by tax credits. Duncan
Smith's measures would fit squarely in her tradition, even
if they violate the principles of the purists.
But
it seems to me to be only partly because of the manifest
perversities of the current system that the time for this
idea has come. The vision of the Big Society, which was
the only new idea for the future on offer at the election,
depends on mass participation in a wide range of local,
associational, mutual and co-operative activities.
As
they stood, the benefit rules would have kept all claimants
out of any part in these developments, which would in turn
have scuppered any prospects for them to be included in
the drive to mend 'Broken Britain'. Duncan Smith's scheme
would mean that they could join in, as part-time paid workers
or as volunteers.
This
may go some way to mitigating the disappointment of basic
income advocates that tax-benefit integration should arrive
by this ignominious route. They can also console themselves
with the thought that this foundation can be used to develop
more liberal, unconditional superstructures, and that at
least it proves that the idea was not as 'utopian' as Žižek
(and many others) have supposed.
Bill
Jordan is Professor of Social Policy at Plymouth University.
He is the author of What's Wrong with Social Policy and
How to Fix It, published by Polity Press in March this
year.
©
Citizen's Income Trust, 2010
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