Some people are against the idea of any welfare payments whatsoever, there's no point in debating with them, they have missed the whole point. Most people are vaguely in favour of welfare in some forms or in general but oppose UBI.
* The hard left vaguely grasp that UBI is negative taxation, so they want it means tested and focused on low-income recipients; that means that higher earners pay more in tax and/or receive less in UBI (modest tax rebates). I suppose that's intelletually coherent, even though expressed badly and not really thought through.
* The hard right are more in favour of the contributory principle, which is the opposite of means-testing and pointless. If you take this to the logical conclusion, you might as well just tax people less when they are earning and expect them to save up for the bad times. Most will, some won't, tough.
*Then of course there are the outright authoritarians with no grasp of maths or logic who support both means-testing AND the contributory principle.
* Many UBI supporters make a different glaring - and rather embarrassing - error, which is to assume that this would be a radical overhaul and/or would require additional taxes.
Nothing of the sort. The UK's tax and welfare systems, if viewed in the round, are already pretty close to UBI, so the easiest way to introduce UBI is by administrative stealth. The DWP and HMRC could simply merge all working age benefits into a single benefit and do claw-backs via PAYE. They can keep the old names and attach different conditions if they want to maintain the pretense and keep the authoritarians happy, but really it's just UBI.
Let's take a few major working age benefits. How different are they really?
* Income Support and Carer's Allowance are to all intents and purposes the same thing, just with different qualifying conditions. £60 to £75 a week for a single adult. No time limit.
* Statutory Maternity Pay is up to £151 a week for 39 weeks.
* Student Loans are £8,000 - £12,000 a year for up to three years. These loans are supposed to be repaid via a savagely higher tax rate if you are over certain income thresholds, so combine the worst aspects of debt and higher taxes. Maybe only half ever gets repaid, so they might as well just give students £4,000 a year and tell them to keep it.
* Working Tax Credits for lower earners. This is largely smoke and mirrors. To qualify, you have to work a certain number of hours i.e. earn a certain amount of money i.e. they are paying some PAYE and reclaiming a similar amount in WTC. In net terms, it pushes up the tax-free personal allowance up to about £15,000.
What do all these have in common? People who (probably) aren't earning much get a bit of extra money. People are all people; money is just money.
They could simply set the weekly rate for all these benefits at whatever £ amount is required to keep total expenditure on all these groups constant, probably somewhere in the region of £80 a week [see footnote] and pretty much abandon all the qualifying conditions. If you get this £ amount correct, it would of course require no increase in tax rates on earnings (which are far too high anyway).
As to means-testing, if the purpose of this is to minimise total expenditure, then we have to remember the Laffer Curve. If the clawback rate is too high (overall clawback rates of 80% - 100% are not uncommon) then people who can only reasonably expect to earn minimum wage £10 an hour gross won't bother. If the clawback rate is too low, then clearly nominal expenditure will be high.
So why not set the official clawback rate at 40%-odd, which is
a) close to the tax-raising/expenditure clawback maximum on the Laffer Curve and
b) happens to be total clawback PAYE rate, including income tax and two layers of NIC, for basic rate taxpayers? We wouldn't need a separate means-testing system. UBI claimants just get a BR PAYE code (with an extra tick in the box for 'liable to NIC on all earnings') which means they get 40%-odd deducted from their wages at source.
For mothers with young kids, it's a two-edged sword, the weekly amount would be maybe half as much, but they could extend the qualifying period of 39 weeks up to 36 months (or until youngest child has reached school age or whatever), and also roll the Childcare Element of WTC back into Child Benefit and make Child Benefit £50 per child per week (instead of a miserly £20-odd for most people plus £60-odd WTC for the lower half), so overall, what they lose on the swings they gain on the roundabouts.
Once people have wised up to this, claimants wouldn't go through the bother of... claiming pseudo-SMP and having to provide children's birth certificates; claiming pseudo-Carer's Allowance and providing details of the elderly or disabled person they are 'caring for' for 35 hours a week; claiming pseudo-student grants and providing proof of what course they are doing at what Uni etc.
They'd just all go for the pseudo-WTC/Income Support option by ticking the box saying "I expect to earn a gross wage of less than £1,250 a month for the remainder of this tax year", provide home address, NI number, copy of passport or driving license (for checking identities - the only possible fraud in a UBI system is multiple claims by one person) and job done.
And if pseudo-WTC claimants are lying and they know they are earning more than £15,000? So what? Most would be stupid to do so, as the extra PAYE/NIC they would have deducted would be slightly more than their pseudo-WTC. Some people would voluntarily do this if they know they will be working part-time, seasonally, on zero-hours contracts etc. At least they have some regular income, however small - the fact that they extra earnings when working are a bit less than otherwise is a price worth paying, a kind of self-insurance.
Of course, there are some people who currently don't bother working because their spouse or partner earns enough for both of them, they could claim as well. Again, so what? This is much the same as a transferable personal allowance, assuming the couple pool their income, it's like giving the working partner a double-personal allowance (most countries still have joint-taxation of couples). And if claimants 'waste' their £80 a week on going to the beauty salon or dining out more often, that's good for the lower paid people in beauty salons and resturants (so they'd be paying more tax and the government gets most of it back indirectly).
To keep the authoritarians and meddlers happy, they could make the forms seem really complicated, do occasional spot checks and occasionally throw some claimants under the bus to generate the required headlines for the bloodthirsty Daily MailExpressGraph crowd and the Guardian/Mirror hand-wringers. This is all smoke and mirrors - apart from genuine admin screw-ups, the worst that can happen is they stop somebody's pseudo-Carer's Allowance or SMP and pay them pseudo-WTC instead.
And because the claw back rate is relatively low, they can generate a lot of positive statistics showing how many claimants are actually working and how much this saves the taxpayer. That should keep most people happy.
Here endeth this week's rant. Why do so few people undertand all this?
Footnote: Quite how high you think the weekly £ amount 'should' be depends largely on where you sit on the political/economic spectrum and whether you would roll in housing related benefits. I personally would go for about £120/week and scrap Housing and Council Tax Benefit. If you are hard right, the weekly amount would be £zero.
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