26 Feb

Time for a Citizen’s Income on Benefits Street?

Posted By polity_admin_user

‘… I know quite a few working people that haven’t got £200 a week — and they’re working hard all day. That’s not right. I’ve read about teachers who have to use food banks. That’s not right. …  The benefits system does make people comfortable, and certainly makes some people not want to go and look for a job.’

This could be the Minister for Work and Pensions, Ian Duncan Smith, justifying the government’s welfare reforms designed to make sure ‘it always pays to work’. But it isn’t. This is single mother-of-two Deirdre Kelly, widely known as ‘White Dee’, from James Arthur Street in Birmingham, star of the Channel 4 series Benefits Street, which has re-ignited arguments about welfare, work and government policy. Kelly explains that she receives ‘about £200 a week’ in benefits, more than many working people get after tax, and ‘that’s not right’. The same point has been made endlessly over the last 30 years, but somehow, hearing it from people at the sharp end gives it an authenticity that well-heeled politicians could never achieve.  [Kelly’s Spectator article: http://www.spectator.co.uk/the-week/diary/9136981/diary-from-benefits-street-to-downing-street/

The coalition government elected in 2010 made welfare reform central to its economic policy, arguing that it should never be advantageous not to work, especially in an ‘age of austerity’. To that end it introduced a total benefit cap for households, with some important exceptions, such as those in receipt of Working Tax Credits and Disability Living Allowance. Housing benefit changes include ending the ‘spare room subsidy’ (or as opponents say, imposing a ‘bedroom tax’), forcing some claimants to pay part of their rent if the property is ‘under-occupied’. Duncan Smith also sought to simplify the complex benefits system with a ‘universal credit’ that rolls several benefits into one payment and has imposed stricter rules on the length of time people can claim. All of these measures are focused on the carrot of providing stronger incentives to work and the stick of making life on benefits less palatable. Of course, previous Labour governments had made benefits conditional on certain criteria and behaviour but the coalition has pushed this policy much further.

Is it working? Unemployment has been steadily falling, standing at 2.34 million in December 2013 (7.2 per cent of the economically active population), whilst more people, just over 30 million, were in employment (72.1 per cent). Consequently the number of people claiming unemployment benefit has fallen by 327,000 in the year to January 2014. This is the kind of macroeconomic data that government ministers argue supports their approach. But underemployment remains widespread as people work fewer hours than they need, living standards have not recovered to pre-recession levels and large numbers of working people depend on ‘in-work’ benefits to make ends meet. Perhaps it is time to revive a more radical alternative vision, which eliminates the divisive and lazy media stereotype of the ‘scrounging’ benefit claimant altogether. [February 2014 ONS data: http://www.ons.gov.uk/ons/dcp171778_350998.pdf

I remember reading a Green Party manifesto in the early 1980s which included (to me) a strange idea: a citizen’s income for everyone as a right, regardless of how much work they do or how much income they have. Yet the more I looked at this mad concept, the more logical and potentially attractive it became. Around the same time, French social theorist André Gorz analysed the impact of information technology and automation on society, arguing that conventional lifelong work was slowly being abolished as IT and robotics took over from massed ranks of workers. Gorz’s Paths to Paradise(1985) saw the need to separate ‘work’ (as productive activity) from ‘income’ (a reward for effort). Instead, said Gorz, we should be moving towards a ‘social income’ in a society where people will work less but the available work will be flexibly distributed. He approvingly cites the French CFDT (trade union confederation): ‘Less work means work for all … and a better life’. Whether it’s called a social, universal basic or a citizen’s income, the principle is more or less similar: ‘an unconditional, non-withdrawable income paid to every individual as a right of citizenship’. [Citizen’s Income Trust: http://www.citizensincome.org/

I can already hear the objections. People will take the citizen’s income and have no incentive to work, thus eroding the Protestant work ethic underpinning modern economies. But surely by generating numerous poverty-traps the current means-tested benefits system is already guilty of this? For instance, people looking to move into employment can lose their unemployment benefit if they work more than 16 hours a week, making it much more difficult to get off welfare. Introducing a guaranteed citizen’s income as a basic safety net should avoid such traps and make it easier for people to take part-time work and thus to improve their economic position or move out of poverty. But could society afford it? One recent analysis of a ‘partial’ citizen’s income scheme is based on 2012-13 rates of Income Support for 0-24 year-olds (£56.25 p.wk), over-25s Income Support (£71 p.wk) and the Pension Credit rate for over-65s (£142.70 p.wk). This scheme would replace most contributory and means-tested benefits, allow for a reduction in tax allowances and cost much less to administer. As a result, the scheme would be broadly revenue neutral. Malcolm Torry’s 2013 book, Money for Everyone, is a detailed exposition of the idea of a citizen’s income and contains some useful examples of how it could be implemented in a phased way. [Torry’s LSE blog: http://blogs.lse.ac.uk/politicsandpolicy/archives/34269

Yet beneath all the detailed arguments about financial feasibility lies a much deeper social significance. The guarantee of a basic citizen’s income for life begins the decentring of work, offering every individual citizen the prospect of moving into and out of paid employment at different times as necessary. Taking time out to care for a relative, to travel, take a sabbatical to write that novel, learn to paint or start a new business; life planning could become a new growth industry. In The German Ideology (1845) Karl Marx argued that only under communism would it be possible for people to ‘hunt in the morning, fish in the afternoon, rear cattle in the afternoon, criticise after dinner … without ever becoming hunter, fisherman, herdsman or critic’. A guaranteed citizen’s income would not take us quite that far, but it does promise to open up a whole new world of opportunities and choices for all. It would also make every citizenpart of a common ‘welfare community’ with no ‘benefit scroungers’ in sight. Sounds like Utopia? Well, ‘Progress is the realisation of Utopias’ (Wilde 1891) and if pilot schemes are needed then James Arthur Street could be just the place for a (televised?) trial run.          

References

Gorz, A. (1985) Paths to Paradise: On the Liberation From Work (London: Pluto Press).

Marx, K and Engels, F. (1970[1846]) The German Ideology (New York: International Publishers).

Torry, M. (2013) Money for Everyone: Why We Need a Citizen’s Income (Bristol: Policy Press).

Wilde, O. (2001[1891]) The Soul of Man Under Socialism (London: Penguin Classics, New Ed.)

 

The citizen’s income is not explicitly discussed in Sociology, but Chapter 13, Poverty, Social Exclusion and Welfare contains a wealth of useful material, especially pp.542-6 on routes into and out of poverty and pp.553-64 on the history of welfare in the developed economies. The backdrop to current welfare reform is discussed in Chapter 7, Work and the Economy where pp.249-252 cover the 2008 credit crunch and banking crisis, whilst the declining significance of paid work is discussed on pp.286-95.  

In Sociology: Introductory ReadingsReading 19 (Weber) describes the origins of the modern work ethic, whilst Reading 23 (Blinder) explores the changing world of work today.

Philip W. Sutton