Scrap Benefits and pay every adult, working, non working or retired, an unconditional basic income of £15,000 a year? Discuss

[CorruptBstard]

Hi

Ok Mumsnet, what do you think of this?

Pay every adult in the uk £15,000 a year, with no conditions attached, so that every adult is free to use their time to do stuff, just for the love of it.

This basic income would cover basic needs for food and shelter, if people wanted to earn more money they could go and work for someone else or start a business of their own

This would abolish poverty in one fell swoop.

Wheres the money coming from to pay for it?

well apart from scrapping all "state benefits", we could also scrap income tax and fund it all by taxing money every time its spent.

ie Government gives me £5. I pass that £5 round a group of 10 friends. By the time the £5 comes back to me, it has been "spent" 10 times. Creating a turnover of £50. If the government taxes that spending at 20%, it raises £10 in tax. Making a profit of £5.


Thoughts?

If you recieved £15,000 a year unconditionally, what would you do just for the love of it?

[merrymouse]

Not every landlord, just the landlords who charge rock bottom prices because currently their houses are in places where there are no jobs.

What I am questioning is the idea that the government could give everybody a guaranteed sum of money that would cover their basic living costs so work would be optional.

A massive advantage of your plan would be that you would reduce the cost of housing in the South East because there wouldn't be any advantage to living there any more.

It's just the 'optional working for all' thing that I can't get my head around. Even in freefall's moneyless economy people are working.

[merrymouse]

And of course the magic money theory, that's a bit of a stumbling block for me too.

I think you are confusing the minimum reserve which enables banks to lend other people's money, thus providing a service which enables other people to trade goods and services, thus growing the economy, with banks being able to create money magically.

Of course banks can manipulate exchange rates, interest rates and inflation to an extent. However, when they just print more money you get people trading a wheelbarrow of cash for a loaf of bread. You can't fundamentally change the value of the goods and services that are being exchanged. The value of these is governed by supply and demand.

[claig]

'you were born to live here and consume the earth without having to pay for it'

But they tell us that we are using up the earth's resources and they want us to pay for it. They want us to 'cut back', they want us to be 'sustainable'. They want to meter water, so that we pay for every drop of that resource.


'It's inflationary and a ponzi scheme that makes barclays look honest.'
According to the OP, it has something to do with Green party polcy.


'I thought Frank Field had been talking about this one for quite some time. A 'National Wage' or something like that? Those that have jobs and for whom the £15k is effectively spare would be expected to give to others less fortunate than themselves. Those that piss their £15k up the proverbial wall would have to ask others to help them out rather than the state. It all hinges, of course, on personal responsibility and a degree of public-spiritedness that is currently at odds with a society where charitable giving is comparatively rare. I'd also be concerned that it would promote idleness... one of Beveridge's five giants on the road of reconstruction.'


'Those that piss their £15k up the proverbial wall would have to ask others to help them out rather than the state'

So if someone invested their money in their business which collapses, or bought a bank product, which they later found had been mis-sold, would they then have to pass a begging bowl round to their friends and neighbours?

What about wheelchair users whose wheelchairs cost between £10,000 - £12,000?

[niceguy2]

Well said judgey. All this is, is a theory based upon a magic money tree. All paid for by that mystical person Mr "someone else".

It would only work in a fantasy world where humans are not fallible individuals whom given the choice would choose to be lazy.

If/when that world exists I will support it. Until then I'd best get ready for work.

[claig]

Do the Greens support 'universal credit'?

It sounds nice, they sell it with teh word 'universal', so that we all think we get something. But some who need more than their cap, will be limited and teh rest will be bought off by the 'universal' aspect, so they won't support the more needy.

How much will this save the state? Is this a means of 'cutting back' state expenditure in total, atr the expense of the needy? Is this part of their 'sustainability' agenda? Is there a 'carbon footprint' for every human being that they have calculated in their ivory towers? Is there a capped limit to every human being's benefits that they have calculated in their ivory towers? Is there no cap for their bonuses or their pensions or their bail outs but a cap for every member of the public after which they will have to rely on the Big Society?

[claig]

''Those that piss their £15k up the proverbial wall would have to ask others to help them out rather than the state'

Why do they want that for the public, but not the banks? Aren't we all in this together?

Why don't they see how far the banks would get if they asked the Big Society for help? I wonder how many of the public will lend them a hand and offer to bail them out?

There is one rule for them and 'universal credit' for us.

[MoreBeta]

To make this Universal Benefit scheme really work well, we would also need to get rid of minimum wage but the labour market woudl become more economically efficient.

The reason why we would no longer need a minimum wage is simply that everyone would have enough money to have a very basic standard of living and would only work if employers made it worthwhile working. The labour market would become much more flexible and the power of employees and employers would be more evenly balanced. The real value of work would be much more transparent. Low paid work would no longer subsidised by Govt paying tax credits or forced labour under workfare schemes. Paradoxically, overall pay levels might actually rise.

Those without work would have to move out of expensive areas to find cheaper housing or find work in that expensive area. The housing market would therefore also become more efficient. Retirees would move to smaller cheaper houses.

By my calculation, the actual level of the Universal Benefit would need to be £10k and untaxed which would be equivalent to about £15k additional gross pay for the average worker.

[merrymouse]

It's as inflationary as QE or bank bailouts

Leaving aside whether or not QE or bank bailouts are inflationary, a key difference is that governments have these policies to jump start economies by providing funds to trade in goods and services that don't yet exist.

If nobody goes on to provide these goods and services, you definitely get inflation.

Governments do not have QE or bank bailout policies to provide a basic wage to people so that they don't have to work (and never provide the goods and services).

[claig]

Beveridge's Children

Beveridge was a progressive.

'The aim of his committee?s discussions?which also looked at housing rents, and why working-class women spent more than men on clothing?was to set benefits at ?subsistence? level: preventing squalor without promoting idleness. Once more, coercion loomed. Beveridge wanted compulsory ?training camps? for malingerers.'


'Last month George Osborne, the chancellor of the exchequer, unveiled a cap on the benefits that any one family can receive, tied to the median net income of a working household. The British sense of ?fair play? would not tolerate people opting for welfare as a ?lifestyle choice?, Mr Osborne said. Mr Duncan Smith has vowed tougher sanctions for benefit claimants who refuse work, up to and including the loss of some benefits for three years.'


There will be no 'universal' idleness. Eventually the 'universal' benefit will probably be linked to contribution and work. 'Beveridge wanted compulsory ?training camps? for malingerers.'

[claig]

A large number of Labour MPs opposed Beveridge's plans and even the National Health Service in the early days. Ernest Bevin was against the Beveridge plan.

[claig]

What will happen to the millions of unemployed and idle who will be consuming green resources and not offsetting their 'carbon footprint' by paying 'carbon credits' earned through work? What would Beveridge, the progressive, think about that?

[MoreBeta]

I have been doing some academic research on the question of cost of living over the 20th Century.

It is interesting to see how the modern 2012 debate about poverty and benefits and living wage and inflation and 'benefits malingerers' is exactly the same language as was used in 1912.

In the early years of the 20th century the focus was very much on what the minimum level of male working class wages needed to be sustain a good basic standard of living for a working class family. Middle class spending patterns were not considered at all.

The working class cost of living was not used to set subsistence level wages and it did not assume the wife went out to work. It was a male wage level that sustained life at an acceptable level for a family with the man going out to work but with the familoy having few luxuries. Indeed, there was a famous house-to-house survey done across the UK to study what working class families actually consumed and a basic 'basket' of goods was worked out that was used to calculate the cost of living. That basic basket of goods did not change until after WWII.

There was no notion of relative poverty in those early days of the 20th century days and even social reformers like Rowntree were definitley focussed on absolute poverty. The debate about relative poverty only came in after WWII and that influenced the level of old age pension and benefits. It is this increasing use of 'relative' measures of poverty that pushed up benefits relative to actual wages over the last 50 years and now that has reached a breaking point.

In effect setting the level of Universal Benefit would be a decision about what basic level of income we need people to earn to sustain life at a basic level and woudl implicitly assume that if people want anything beyond that level then they have to earn it.

[MrJudgeyPants]

MoreBeta That would certainly set an interesting starting point - out of interest, do you have any idea what the basket of goods contained, and how much it would cost to buy in 2012?

[merrymouse]

But a subsistence level of living in 1912 meant no toilets, no inside tap, cooking over a fire and the eldest child starting work at 12, possibly leaving the house to go into service. You grew your own food in the countryside and were malnourished in the city. You wrapped your children in newspaper in the autumn and unwrapped them in the spring.

Surely you have to take into account rises in general standards of living?

[MrJudgeyPants]

merrymouse I agree with you but most people on this board seem to dispute the fact that the poorest have gotten a lot richer over the last 100 years!

"It was a male wage level that sustained life at an acceptable level for a family with the man going out to work but with the familoy having few luxuries."

This bloke would have been expected to work around 60 hours a week in a factory (by the fact that he had a job, he couldn't have been amongst the most impoverished of that era) - I am curious to know what was considered an acceptable return for that work 100 years ago and would love to compare it to the expectations of someone surviving on the likes of JSA today.

[MoreBeta]

MrJudgeyPants - the basic basket of goods was done in 1904 and again in 1918 by the UK Govt.

I have copied this sumamry table of General Average Weekly Expenditure for a Standard Working Class Family in 1914 (in old shillings and pennies.

Food 24s 11d
Sundries 1s 2d
Fuel and light 2s 4d
Rent 6s 7d
Fares 0s 10d
Insurance 3s 0d
Clothing 5s 6d

TOTAL 44s 4 d

By comparison an average print worker (including young unmarried men) was 42s 7d and that was for a 50 hour week. An older skilled and likley married man would have earned more than the average obviously.


Paradoxically, despite The Great Depression, by the mid 1930s deflation in food and other prices but not in wages meants many men who actually still had a job were a lot better off in real terms and poverty among working class families that actually had a male wage earner in work was much lower than in earlier years.

[claig]

'But a subsistence level of living in 1912 meant no toilets, no inside tap, cooking'

Yes, but Beveridge didn't decide it should mean no toilets, no inside tap water", he decided it should be a "subsistence" level, and the reason he did that is because he wanted to encourage them to work. That is the philosophy behind "subsistence". Then it was "subsistence", now it is "sustainability". Plus ca change.

'most people on this board seem to dispute the fact that the poorest have gotten a lot richer over the last 100 years'

Of course the poor have got better off over the past 100 years and we also have the vote now. That is as it should be. That is real progress and real social justice. But the battle for social justice isn't over, the battle against the "subsistence" philosophy for some has not ended. People still die in hospital wards of dehydration and Bob Diamond's bonus is equivalent to the entire budget of homeless charity Shelter, according to John Mann, Labour MP.

[claig]

£15,000 for everyone and universal credit.
I don't know if this £15,000 for everyone is really Green policy.

But, beware of Greens bearing gifts. They giveth with one hand and taketh away with the other.

[MoreBeta]

By thw way, inflating 44s 4d per week up to current levels would be equivalent to about £210 per week in 2012 money.

That equates to about £11,00 per year. As people on low pay paid paid little or no income tax in those days but paid emplyment insurance (like NI), it would be quite similar to the minimum wage level we see today.

[MrJudgeyPants]

Thanks MoreBeta. I've run the number you gave (44s 4d) through various online inflation calculators and get a modern day value of between £170 and £210 per week - so I can only assume that the calculators don't work very well!

It's also worth noting that these figures will be after tax, but won't take into account VAT. Trying to figure out what items attract VAT today will be a nightmare to try and work out given the distance in time, but as a rough 'back-of-an-envelope' guestimate, the average living costs in 1914 would equate to requiring an annual salary of between approximately £9,300 and £12,500.

Now, that's interesting because today, working a 40 hour week on minimum wage pays £12,646. Take income tax and NI off that and you get £10,962, which is pretty much smack bang in the middle of the estimate above.

Factor in that the poor bugger in 1914 was working at least an extra 10 hours a week, and that he'd have been an AVERAGE earner, rather than at the lower end of the earnings spectrum and it's obvious at a glance that we are all much, much richer than our forefathers. Hopefully, we can put to bed this ridiculous assertion, often repeated on these boards that we are no richer than in the past.

[merrymouse]

I expect many people thought it was perfectly normal not to have a loo in 1912 and didn't expect anything different. My point is that because of changes in society the subsistence level has changed.

We don't all need iPhones but we do all need plumbing. There are countries where true slums exist next to modern cities - how do we prevent this happening in the UK if acceptable standards of living for the poor aren't linked to those of the more well off?

[MrJudgeyPants]

Sorry MoreBeta must have cross posted - good to see our maths hang together though!!!

[CorruptBstard]

Quantative Easing now stands at £375 billion. Enough to pay half the country £15,000 in unconditional basic income. m.bbc.co.uk/news/business-18724010

[MrJudgeyPants]

CorruptBstard As I said last night "I hope I don't have to explain the difference between finding the money for a once-in-a-century event and annual expenditure!"

Please tell me you understand the point I made above about the difference between, hopefully, an exceptional set of payments caused by exceptional circumstances and run of the mill government spending. Please give me some hope that this thread isn't going to descend into a farce. Please give me some hope that you still aren't wedded to the magic money tree school of economics.

Please.

[niceguy2]

Let's use your figures for now. To pay everyone your notional £15k of income per year it would mean the government having to raise £750billion per year in taxes just to fund this. That does not include any goods/services it must buy elsewhere (eg. drugs, defence hardware, books, paper etc. etc.)

So given our total tax income at the moment is about £430 billion, where will the government be able to get another £750 billion from? Even if you doubled every single tax we have and somehow not lose a penny in tax avoidance or mass emmigration, you are still not even close to raising over a trillion pounds which you would need to fund your idea.

Let's be honest, it's just bollocks really isn't it?