Individual Freedom and Basic Income

A basic tenet of Conservatism is that the individual ought to be able to get on through his or her individual efforts but that there should be a safety net in place. In part, that’s universally accepted. The debate is round the height of the net and how easy it is to climb out of it.

Universal Credit is intended to make the transition between in and out of work less dramatic, with the idea that benefits would look more like wages. Regardless of one’s view of the implementation, that seems like a good idea. However, the bureaucracy and inertia of the system has the potential to leave someone vulnerable as they cross over the join. The benefits system, which was unwieldy and opaque before, is likely to remain so to some degree or other.

On Saturday 28th January in Kelty, Fife, there is an event discussing how there could be a simpler way to structure the benefits system and reduce the vulnerability of individuals receiving support.

For me, from a maths and engineering background, UBI is appealing because it’s elegant, at least by comparison with the status quo. In its purest form, everyone gets the Basic Income, the complexities of the benefits system disappear and the incentive to move into employment, even briefly, is clear.

However, the purest form of anything rarely sits well in the real world. For example, is it appropriate to do away with all other benefits? The likely answer is “no”. Disability is an obvious area. Housing too has been mentioned. So part of the case against UBI is the concern that it’ll become overlain with a top up benefits system as ad hoc and irrational as the one we have now.

What is the right level of BI to allow everyone to at least subsist on it? What is “subsist” and is that the right measure? The lower we set it, the greater the need to bolt on extras; the higher we set it, the less the incentive to go out and do something. We read recently of predictions that machines will render most of us redundant fairly soon. I’m old enough to remember similar predictions over many decades. How many people were in Internet-related jobs in 1977? Work will continue as the norm for quite some time to come.

How do we test UBI? It’s to be tested in a locality in Fife, though no detail has yet been worked up. It’s easy to see the £ signs flashing in local councillors’ eyes, as they see their patches getting extra dosh. Yet a meaningful test of UBI can’t simply mean paying everyone in a town or village in addition to whatever they get at the moment by way of payments from the state. That would be grossly unfair on the village next door. It’s instructive to look at the much mentioned Finnish experiment, which isn’t universal at any geographical level but is instead a control experiment using a random selection of the unemployed.

And last but by no means least, how will it all be paid for? It’s assumed that UBI will be tax free. It’s hardly sensible for the state to give out money and immediately take it back. Will it be set at the level of the personal allowance for income tax? If so, the first £ from employment will be taxed, though that probably happens anyway in lots of cases through clawback of benefits. However it’s done, the broad result will be that folk up to a certain level of income will gain and those above will lose. In effect, the tax curve will steepen.

As a card-carrying Conservative, I’m instinctively twitchy about that. Our starting point is that folk should get to keep what they earn and that the state should seek to minimise what it takes. I’ve seen estimates of the increases in income tax needed to fund UBI and, in themselves, they’re scary. Any scheme will need a lot of thought and a lot of salesmanship.

So, in summary, the case for UBI lies in its elegance, simplicity and the advantages it offers for those moving often across the in work/out of work boundary. The case against lies in the current lack of detail around any national scheme or how it might be trialled locally. The devil is in that detail, as always, and the devil could have a field day here.

The Conservative Group on Fife Council is supportive of the Council’s plan to organise a trial somewhere in Fife. We look forward to scrutinising the detailed proposal when that comes forward.

  • Dave Dempsey, Conservative Fife Councillor for Inverkeithing, Dalgety Bay, and Aberdour

Find Dave on Facebook and Twitter @cllrdavedempsey

2 thoughts on “Individual Freedom and Basic Income”

  1. Whilst I broadly welcome the comments above, the Tory cannot help himself when it comes to the issue of taxation, and misleads.

    Anyone who has looked at any of the proposed systems of basic income or citizens income for the UK in recent years understands that the most likely way to introduce this is to do away with personal allowances, therefore increasing taxes. However, those whose income is only the basic income, they are not liable, as this is tax free.

    As everyone gets the basic income, the vast majority are better off. The increased tax burden is therefore only felt by those with a high income – the minority – who can afford it.

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