Debate Magazine

Killer Arguments Against Citizen's Income, Not (25)

Posted on the 18 March 2020 by Markwadsworth @Mark_Wadsworth

The tired old arguments are being trotted out again:
From City AM:
DEBATE: Is now [i.e. during coronavirus pan{dem)ic] the time for the UK to trial a temporary Universal Basic Income?
YES, says Julian Jessop, an economics fellow at the Institute of Economic Affairs...

Good stuff from the IEA.
NO, says Matt Kilcoyne, head of communications at the Adam Smith Institute...
We need liquidity for households and struggling firms — a kind of state-backed insurer of last resort — but money must be targeted where it can do most good. Don’t splash cash, target limited resources at those who need it the most.

The question isn't so much about how much people who are suddenly out of work get (that is a different debate); it is about how quickly they can get it.
If you don't want to increase total spending or transfers (and I don't), then you offer a UBI to everybody, pitched at a sensible amount similar to current Income Support levels... but the quid pro quo is you forego the income tax personal allowance/National Insurance Threshold if you do.
So the extra tax/NIC you'd pay is equal and opposite to the UBI you'd get. Those in steady jobs won't bother; those who have lost their jobs, or worry that they might, or are on benefits anyway, can opt to get the UBI. They'll have to fill in a form or two, but payments can start more or less immediately, like Child Benefit starts the week a child is born, and after that there is no more form filling ever again.
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Emailed in by ShineyMart, from CityUnslicker:
To give an example, the NHS costs around £2200 per person, with UBI we would have to give say £500 a month for it to be realistic - so £6,000 a year. That plus the NHS is £8,2000 [sic] per person per annum. At over £750 billion, that is more than the UK Government's entire spending and 250% more than we currently spend on all social benefits and the NHS added together.
*Sigh*
[His calculator must be broken - £8,200 x pop. 66.4 million = £550 billion, a bit more than one-quarter of GDP]
The NHS costs what it costs; it's cheaper than a US style system, and we can clearly afford it. And that has nothing to do with UBI. No extra cost.
Where does he get the figure £500 from? It's easy to prove that something is unaffordable if you set an arbitrarily high amount.
A UBI is, or should start off as, a replacement for existing 'stuff'. There is little or no extra cost.
Pensioners already get a UBI of an average of £160/week, it's called "state pension". No further UBI needed. No extra cost.
If you add together Child Tax Credits and Child Benefit, that's enough to pay a UBI of £75/week to the first child in each household and £50/week to second and subsequent children (average £60/week). No extra cost.
Putting Housing Benefit and child benefits to one side, existing welfare claimants already receive on average £75/week each. No extra cost.
For people in steady jobs, who are lucky enough not to lose them, see above. No extra cost.
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Even if you are no good at maths, surely you grasp that UBI is mainly just income smoothing, and not particularly redistributive? The people paying the tax now were children once (and got child benefit); are adults now (and are getting part of their tax back as UBI); and will be pensioners one day (and will get pension/UBI). Average earners get their money back, they are paying back their child benefit and pre-paying their pension.
Can average earners 'afford' so spread their income like this? Of course they can.
For sure, that's over-layered with some redistribution from high earners to low earners, but that is a relatively small chunk of the total collected and paid out.
And can high earners 'afford' to hand over some of their income to be shared between the far larger number of low earners? Of course they can.


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