Tories and Lib Dems consider flat tax
A flat tax is a single-rate tax on income (and possibly on other things as well). The idea is to have as wide a tax base as possible, so for a given amount of tax revenue collected, the marginal rate will be lower than in a non-flat tax; this is intended to boost economic activity.
Chris Dillow notes that The Times is reporting that Britain’s two main opposition parties, the Conservatives and Liberal Democrats, are considering flat tax proposals:
THE case for a “flat tax†is to be studied by the Tories as part of a review of the tax system.
George Osborne, the Shadow Chancellor, said that he would set up a commission to investigate a much more straightforward set of tax levels, including a single rate.
It is likely to be headed by a senior businessman and report next year on the way that the system works in other countries and the viability of introducing it to Britain.
The Times has also learnt that the Liberal Democrats are considering a radical new tax policy dubbed the “double deckerâ€Â. This hybrid of a flat tax would cut demands on the low-paid andn middle-earners but progressively squeeze the better-off.
Once More also has the story, pointing to this report in the Telegraph
The Conservative Party, to adapt Disraeli, is a low tax party, or it is nothing. As we report today, George Osborne, the shadow chancellor, will this week launch a commission that will look at flat taxes and tax simplification. This excellent initiative has the potential to liberate the Tories from a long period of self-censorship on tax policy, and to re-establish the Conservative Party as a force for modern, dynamic and just public policy.
As Mr Osborne has evidently grasped, flat taxation – where all (or almost all) tax exemptions are abolished and a single rate of tax is imposed – is an idea whose time has come. Already, 11 countries have introduced such a system, and others look set to follow. The most spectacular examples of success have been in so-called “New Europe”: Lithuania, Latvia and Estonia. But “Old Europe” is waking up to the idea, too. In Germany, Angela Merkel, the CDU leader in this month’s election, has appointed a prominent advocate of flat taxation as her economic adviser.
Under Godon Brown, tax has become a positively neuralgic matter, a forest of bureaucracy, reliefs, rates and allowances. A simple system would reduce evasion dramatically. It would also – in time – encourage increased revenues, as the disincentives to enterprise posed by higher tax rates were removed and the economy grew. Flat taxation would remove from politicians the tool of tax policy as a weapon of electoral bribery, or a means of dictating the public’s behaviour. Mr Brown wants a complex system of tax credits as a mechanism of social engineering. The natural Tory response should be to sweep away such measures: in the case of flat taxation, liberty, prosperity and simplicity march together.
Once More is a pro-Tory group blog, so the discussion naturally turned to whether this would be electorally beneficial to the Conservatives. One concern was whether it would be presented as a tax cut for the rich. For example, “srs” commented:
The major danger is the media, they along with Labour/Lib Dems will present it as a tax cut for the rich. Added to the fact that they will not give the tories a chance to counter will be the greatest danger, along with the Wets who will appear claiming that you are the nasty party.
Whether it could be presented as a tax cut for the rich would depend –at least in part — on whether it was so. One of the main problems with the tax and benefits system as it currently stands is that people on low pay often pay absurdly high marginal tax taxes:
Take a married couple with two children under 11 and pre-tax earnings of £200 a week. If they get a better job, raising their earnings to £300 a week, by how much does their net income rise?
£60? £50? £40?
Nope. £8.52.
Yes. £8.52. That’s a marginal deduction rate of 91.5 per cent.
One way to help alleviate this would be to reduce marginal tax rates for people on low pay. Why should someone on the minimum wage pay income tax at all? they shouldn’t; the minimum wage works out as about £10,000 a year, so the annual tax allowance (the amount you can earn which doesn’t attach income tax) should be set at this amount.
If the Tories were serious about having a flat tax in order to make the economy grow faster (as opposed to having a flat tax in order to make the rich richer), they would include these proposals:
- Raise the income tax allowance. It should be equal to working on the minimum wage for a year — about £10,000. The higher the allowance, the more lower-paid workers benefit from any changes.
- Abolish national insurance, and increase the rate on income tax to make up for any shortfall. This is both administratively more efficient (NI is just income tax under and other name), increases the tax base (because you only pay NI on earned and not unearned income), and egalitarian (because people whose income is mainly unearned tend to be richer than people whose income is mainly earned).
- Abolish tax avoidance schemes. (Of course, flat tax schemes tend to result in lower marginal tax rates, which in themselves will tend to reduce tax avoidance). Tax avoidance schemes tend only to be available to the rich, and ending them will have the beneficial effect of increasing the tax base.This could be done by ruling that any complex financial scheme whose only or main purpose is to pay less tax is null and void; and that people using such schemes not only have to pay the tax that they would have had to, but also the amount they would have avoided on top.
- Tax inheritances the same as any other income; in other words, add inheritances to the tax base on which income tax is levied.
I suspect the Tories will do none of these things, particularly not the last one. To misquote John Major, the Tories want to see “inherited privilege cascade down the generations”; they are anti-egalitarian and anti-meritocratic, even when this leads to a loss of economic efficiency.
(This article is also posted on my blog here).
Tax avoidance is the legally sanctioned organising of your affairs so as to pay the minimum tax. The problem with wishing it away is that it is very difficult, if not impossible, to define it in a way so as to stop the schemes for the rich but not everyday avoidance by everyone else. For example buying duty free alcohol is a form of tax avoidance. A booze cruise is tax avoidance writ large. If I buy books from Amazon in the US I can (sometimes) avoid VAT. Is this tax avoidance? Is it a complex financial scheme? Who can say?
If the government could come up with a way to stop the avoidance industry they would have done it long ago.
More than a little cynical, Phil – or maybe not cynical enough. My guess is that a (very) hypothetical Tory Government would raise the allowance as the priority. The party’s very sensitive these days to charges of being pro-rich, and also quite keen on stuff like that, to raise opportunities. There are few votes in cutting the basic rate any more – but raising the allowance looks like being pro-poor when it’s actually pro-middle income (they get the full value of the allowance handout).
Also, few Tories would be against abolishing NI as such (at least in my experience) – it’s just the likely hue and cry over the end of the contributory principle that puts them off.
Abolishing tax avoidance schemes is precisely the point of the flat tax – so, if the principle is followed, that would be done too. Free market purity isn’t always so friendly to fat-cattery, after all.
On inheritance, yes, you’re right – very unlikely to be increased.
But in terms of economic efficiency: raising the personal allowance seems likely to have a limited effect. For most people in the workforce, all it will do is give them a one-off increase in salary with no effect on incentives to earn more (in fact, by raising income without changing marginal rates, it might lead to a marginal withdrawal of labour). Those for whom it will change incentives are, for the most part, facing those very high marginal rates of withdrawal because of Tax Credits – the most that will happen for them is to cut, say, 90-odd% to 70-odd%.
If economic efficiency is the objective, these workers might anyway be less responsive than higher earners would to a top-rate cut – they tend to be more work-driven and have greater control over their employment situations (less exploitative relationships, etc). But regardless, barring abolition or radical change to the tax credits system, the impact of an increased allowance on low-end work incentives will be very limited.
As for Tories being “anti-egalitarian and anti-meritocratic”: guilty and proud on the first; but on the second, since Thatcher, the party tends to be head-bangingly meritocratic. Meritocracy and equality don’t typically agree, of course.
Blimpish: More than a little cynical, Phil – or maybe not cynical enough.
:-) I’ve certainly got a jaundiced view where politicians are concerned.
Also, few Tories would be against abolishing NI as such (at least in my experience) – it’s just the likely hue and cry over the end of the contributory principle that puts them off.
I suspect the real reason neither they nor Labour abolish it is because it would make the “headline” rate of income tax higher. Sadly the press, particularly the popular press, shows little interest in explaining tax policy to its readers in any detail.
Those for whom it will change incentives are, for the most part, facing those very high marginal rates of withdrawal because of Tax Credits – the most that will happen for them is to cut, say, 90-odd% to 70-odd%.
70% is still too much in my opinion, however it’s still 3 times better than 90% (because the person keeps three times more).
If economic efficiency is the objective, these workers might anyway be less responsive than higher earners would to a top-rate cut – they tend to be more work-driven
That’s probably true, to some extent. However, a 90%+ marginal tax rate is very much more likely to act as a disincentive than a 40% one. Especially when you consider costs of working such as transport costs, which mean someone may be worse off working than not — that’s got to be a big disincentive.
So it seems to me that concentrating on where the marginal rates are highest is the best way to avoid having disincentives to working. The other issue is, as you say, Tax Credits and other benefits, which is why a Citizen’s Income is an intriging idea (although I’m not sure whether it’d be workable).
As for Tories being “anti-egalitarian and anti-meritocraticâ€Â: guilty and proud on the first; but on the second, since Thatcher, the party tends to be head-bangingly meritocratic. Meritocracy and equality don’t typically agree, of course.
You’re right in that equality of opportunity and equality of outcome are different and incompatible things.
I disagree that the Tories are, in fact, meritocratic, even though their rhetoric is. If they were, they’d favour increasing inheritance tax to fund a reduction income tax. They’d also favour policies that help clever kids from poor backgrounds and attending crap schools get university places that currently go to thick kids with parents who can afford private schooling.
Of course, all political parties say they are meritocratic, but that means nothing because politicians tell whatever lies they need to get votes. (Saying uncomfortable truths to voters is unlikely to be a winning election strategy).
Let’s look at the reality of Britain: social mobility has decreased in the last quarter century. This is due to the policies of both Tory and Labour governments, who’ve favoured polices that have reduced social mobility. (I suspect this has something to do with the observation that they are both chasing the same middle-class floating voters in marginal constituencies).
If people are serious about reducing disincentives caused by high marginal rates of tax & benefit withdrawal, then, as pointed out earlier in this thread the real impact of these disincetives is on the poor. Phil says that the rate of tax & benefit withdrawl [note: it is not so much the tax rates as the fast rates at which means-tested benefits disappear that make the rate so high] can be as high as 91.5%. This is far higher than the 40% the rich pay.
The solution, though, is far more expensive [in terms of public spending] than introducting a flat tax would be. The solution is to _reduce_ the rates at which means-tested benefits taper.
For example, if – in the current system – a worker gets £100 pw in wages and £100 pw in benefits [these benefits might not only be in cash, they might be free school meals or milk tokens for her children] then – if she works longer hours or trains and gets a better-paid job – she does not enjoy the full amount of her extra earnings. If her salary goes from £100pw to £150pw then she may lose, for the sake of argument, £40-worth of benefits. I.E. she is paying a 80% (£50 gross pay rise & £40 reduction in benefits => 80%) marginal rate. The solution is to reduce the cut in means-tested benefits as her income rises [e.g. reduce the cut from £40 to £20]. This would reduce her marginal rate to 40% [the same as the richest people in society]. But this means that the state would have to spend (or forego the saving of) £20 extra in public spending to achieve this [i.e. not claw back benefits when it could].
What this means is that the key issue for incentives for the poorest [who get money in working families’ benefits] is to ensure that the state doesn’t claw back too much money in benefits as their wage income rises. Anyone serious about incentives and disincetnives will have to tackle this. However, tackling this will mean increasing spending social security benefits [as we will have to keep paying them as people’s incomes rise to stop disincentivising them]. Somehow, i don’t think the Tories will ever propose that. This is why their talk of a flat tax is simply a way of disguising a tax cut for the rich, as they do not want to actually tackle the disincentives caused by means-tested benefits [because means-tested benefits are cheaper in terms of public expenditure than universal ones].
Phil: you and I might be the only two people in the blogosphere with any doubts about the Citizen’s Income.
Re the social mobility thing – my guess is, much more to do with education than tax regimes. There is though, another side to meritocracy – that, leaving aside the question of material inherited wealth, our genes and our upbringing will have an impact on where we end up. The first round of meritocracy is very vibrant, as poor kids use their intellect to topple the privileged kids; but then the new rich are there because they are intelligent and hard-working, traits which (to some extent) get carried through to their children. So, social mobility explodes but then diminishes.
(Tories’ commitment to meritocracy stops at inheritance tax for two reasons: vested interests of the rich, but also a competing good, of supporting family obligations.)
Unfortunately, the only way out of the incentives problem isn’t tinkering with rates of means-tested benefits. It is flat rate benefits only, and ones that don’t withdraw as income changes. There’s always going to be a withdrawal rate problem while tax credits persist, and breed. They are in the long run destructive, and as we’ve seen recently, botched in their application. A flat tax with a high personal allowance is a start, though: at least a poor single mother working an extra ten hours a week cleaning will get to keep what she makes, rather than losing benefit and paying tax on the extra few quid she earns – to fund a re-fit to the Royal Opera House, maybe? It’s obscene.
Jarndyce, i agree but the difficulty with fully flat-rate benefits is that they are v expensive [as you are giving sufficient money to lift people above the poverty line to a lot of people]. I don’t have a problem with universality [esp for pensions and child benefits]. But it is v expensive. If people are willing to pay taxes to fund this then this is fine. However, the experience of voting behaviour (4 successive victories for the Tories on a tax-cutting programme) and general anecdoatal view from the public that they think taxes are high suggests that they aren’t willing to pay the taxes to fund decent universal benefits that are in themselves [without any need for means-testing] sufficient to lift people above the poverty line
The main aim of a flat tax is to simplify tax administration and lift a substantial proportion of poorly-paid workers out of paying tax and claiming benefits altogether. A consideration of the benefits system makes a good case for a flat tax.
The combined (Income Support, Job-seekers’ Allowance, Minimum Income Guarantee & Pension Credit) national results for errors are taken from latest DWP statistics:
Fraud: 3.0% cases incorrect, 149,000 cases.
Customer Error: 8.1% cases incorrect, 405,000 cases.
Official Error: 10.7% cases incorrect, 538,000 cases.
Total: 19.8% cases incorrect, 995,000 cases.
The total amount involved in all these errors was £1.11 billion; the housing benefit statistics aren’t any better. Overpayment of housing benefit was first estimated at £700m (5.4% of budget) & at the latest estimate is £600m (4.9% of budget). The target is to reduce this overpayment by 25% over 3 years.
Thus we tax the poorest-paid workers and then make them claim back money via an error-prone system. Where is the logic in that? Of course, if one is wedded to the socialist ideal of wealth redistribution through means testing & progressive taxation then it is probably a price worth paying. The tax payer also has the privilege of having to pay for such a system.
Well, if we’re prepared to make difficult choices, it can be afforded: with a Citizen’s Basic Income. I wrote about it here. Chris Dillow thumbnail-costed it here, with some of the sacrifices that might be required laid out. Most of which, BTW, I could easily live without (Dept. of Culture, Media, Sport…?), and some like scrapping the minimum wage (which after all is only a 2nd best solution – the real problem is the power dynamic in the workplace, surely) that could have positive economic benefits.
Thanks for the links, Jarndyce. I like the simplicity of the Citizen’s Income idea of the Greens; but there are a no of issues:
Will allowance be made for:
1. Disability
2. Housing costs
3. Dependant children
Also, there is the danger that if it is paid to people _regardless of willingness to work_ it might increase the willingness of people to withdraw from the labour force. Although, there are people who are on JSA nowadays who aren’t really looking for a job, this is a relatively minor problem [given the number of sanctions in the system to attempt to deter it] compared to changing the rules to allow _anyone_ to claim a subsistance-level allowance if they don’t wish to work.
Okay, another link for you. A great (anti-) post from the Torybloggers here, followed by a super-long comments thread, where we ended up covering your points, and some more, and then still not agreeing, obviously.
In brief, IMO,
1. No extra cash, though all necessary services provided completely free.
2. No extra cash. It’s a living wage, not a living in Belsize Park wage.
3. Yes, a flat payment like child benefit.
And on your final point, yes it might. But:
1. they are probably the layabouts anyway – what sort of tax take could we expect from them in an ideal world? If they’re faking on incapacity benefit, with all the add-ons, transferring them to CBI might actually save the rest of us money, too.
2. there will be a huge incentive to work: you get to keep any extra cash you make up to the start of the flat tax threshold. No benefit withdrawal rate. This incentive will be especially powerful at the bottom (an extra 50 quid a week is worth a whole lot more…).
Anyway, like I said, that debate with the Torybloggers covers all this and more…if you’re interested and have 20 mins to spare I can recommend it.
As others have said: I don’t see the connection between the tax and benefits system. It’s possible to have a flat tax, but sharply graded benefits that produce an high marginal tax rate. It’s also possible to have universal benefits and a low marginal tax rate, combined with a progressive tax system.
I think the elephant in the room is the Child Tax Credit, and related support, and Brown’s use of it. The Telegraph’s “complex system of tax credits as a mechanism of social engineering” is basically a system for redistributing money to those with children, compared to those without, primarily aimed at helping poor waged families. That’s what produces the disincentives that are being complained about.
I’m not a fan. But these are quite large sums of money that are being redistributed – even to well off families – and it’s all quite popular. No-one really has the balls to say “scrap the Child Tax Credit”. If they think that, they should come out and say so directly. But they won’t, because if the wrong people feel threatened because of this the policy it would be politically disastrous.
In political terms, Brown’s neutralised the unemployed (by connecting the benefit to work) and brought the middle class on board (by giving them some of the action, based on the same moral justification). It’s a huge success.
P.S. One last point. There may be high marginal tax rates, but there may not be many people on them, and they may not be on them for very long. If that’s the case, then they may make interesting anecdotes, but to they have much effect in economic terms?
nik: not quite, though, because right now the threshold for paying tax is so low that the benefits are being withdrawn as well as the extra income being taxed, producing astronmical marginal tax rates.
J: to be fair, marginal ‘tax rates’ (i.e., tax and benefit deductions) aren’t as bad as they used to be. The problem with the tax credit system is that it removed the worst points in the MRW curve, but did so by drawing many more people into it.
I realise that the 100% plus benefit traps that were there when I did my Public Economics module 14 or so years ago have gone, but 91.5% found by Chris in those DWP figures has still gotta be a huge disincentive to work. As Phil says, add on the bus fare and you’re back in Negative Net Benefit territory. Whichever way you look at it, though, we shouldn’t be taxing people earning pittances. And to make it worse, we shouldn’t be taxing their wages, having them stigmatised and confused by hours of form filling and phone calls, employing bureaucrats to read those forms (and get the sums wrong?), just to give them back some or all of the money they’ve just been taxed on in the first place…it’s insanity.
Jarndyce;
I’m not really sure the income tax rates make much difference in the grand scheme of things. In the example quoted from stumbling and mumbling; there were no income tax payable at all between £200 a week and £300, the total amount they’d benefit by would be £22. For a total of £30.52 instead of £8.52.
The 70% marginal rate is lower. But is the £30 going to motivate them do something they wouldn’t have for the £8.52? It’s basically £5 an hour week for 20 hours, and getting £1.50 an hour of it. While no tax changes the marginal rate a lot, I’m not sure the incentives to change your behaviour are altered that much.
Worse, given the interaction of income and substitution effects, the still-high marginal rates, combined with a boost to weekly income (10% of gross wages extra) might lead some towards a withdrawal of labour supply.
(Written as the whistle was blown for full-time. Pathetic.)
“No extra cash. It’s a living wage, not a living in Belsize Park wage.”
The average weekly rent for social housing in London is £70. It varies from borough to borough, but in Tower Hamlets its £70 too – hardly Belsize Park. Rents do not vary clearly according to how nice an area is – they are in many cases quirks of housing finance history. Oh, and rents are rising faster than inflation.
So that’s 70% of your CBI gone on rent. Given that only around 30% of social renting tenants are actually in work, even after assuming a miraculous leap in employment due to the need to avoid starvation, you’re still looking at tens of thousands of the poorest people being forced to leave London, if they can afford to move that is – remind me, would we be abolishing VAT relief on transport?
So maybe you can jack up the CBI, or give more child benefit, or make a lot more services free of charge (particularly child care). Suddenly it’s looking more expensive. Maybe we can target some of these increases just at particular groups or particular areas, then. Hmm, but then it’s no longer a flat rate.
Overall, I think a CBI could be any one or even two of affordable, universal and adequate, but not all three.
Jim: just clarify for me. That’s £70 per property, right? So for flatmates, shared housing and families, it wouldn’t be 70% of it gone. Did you have your own place when you were shit-poor, a student or skint? I didn’t. Most nurses don’t. Aussies and Kiwis over here for a couple of years don’t.
And, yes, I’d happily see much more free social child care. My kid’s at a SureStart nursery. Otherwise, she’d be at home with me. I thoroughly approve.
And, yes, I would expect a rise in employment. There are tons of (shit, admittedly) jobs going in London. Anyone who isn’t ill or disabled has no excuse at all for being unemployed. Grab your bike (or “liberate” one) and take it along to a courier office. You’ll be delivering mail by lunchtime.
I admit, though, I’m no expert on this. It obviously hasn’t been costed fully. But in principle, I think it answers lots of the problems with the welfare state, as well as being thoroughly egalitarian.
Yes, it’s £70 per property, but it’s an average, and while a lot of people in social housing are single tenants, family housing does cost more. The point remains: social housing rent is very expensive even in areas of London which are not particularly nice – there is no ‘market’ in council rents, so expecting people to shop around because they can no longer afford to live in Tower Hamlets is absurd.
As for all those without jobs suddenly becoming cycle couriers, maybe I’m naive but I didn’t think there were that many suicidal sociopaths among London’s unemployed. I’ve no doubt that if you abolished the minimum wage there would be sufficient shitty, barely-paid jobs in London, but again forcing people into accepting them because they live in an expensive (but again, not particularly nice) area seems to me to go against the empowering objectives of the CBI.
_expecting people to shop around because they can no longer afford to live in Tower Hamlets is absurd_
Why? My partner was born and bred in Camden Town. But she can’t live there anymore because it’s too pricey, so we shopped around (which I was glad of – I hate Camden). What’s the big deal?
_I didn’t think there were that many suicidal sociopaths_
Well, it worked for me. I didn’t fancy it much at first to be honest. But in the end it’s a responsibility for everyone to provide for themselves, as a first best option. The second best option, the state, is supposed to be for those who can’t not those who won’t, whether because they think delivering mail beneath them or whatever. The less scroungers taking the piss on “disability”, the more SureStart nurseries for people who actually need them.
_I’ve no doubt that if you abolished the minimum wage there would be sufficient shitty, barely-paid jobs in London_
There are plenty already, whether we get rid of the minimum wage or not, something which I’d only countenance if the power relationship at work was rebalanced a little, with a CBI giving workers a credible threat to leave.
They’d also favour policies that help clever kids from poor backgrounds and attending crap schools get university places that currently go to thick kids with parents who can afford private schooling.
This may seem a minor point, and even a little off topic, but – damn! – I had to pick it up. What it shows is a total lack of original thinking. At what stage, exactly, did we decide that University is automatically the best option?
With the current spate of reports (yes, I’ll try to find links) showing how low the financial benefits of going to University are (in many cases, especially Arts, rather lower over a lifetime than the present cost of going), why are we still assuming that tertiary education – especially in our debased and poor-value University system – is the best thing?
I’m a graphic designer: I learnt “on the job”, as it were, in a printers (I’m a bright guy from a middle-class family, went to Eton, dropped out of my Microbiology course. Because I was bright enough to realise what I’m about to amplify). Now, I realise that this will mean little to anyone outside this industry, but I’ve had to explain – to University-educated designers – what a spot colour is. This is a bit like you having to tell your electrician how to wire a plug. And that’s not even the most heinous instance of ignorance amongst the tertiary-educated idiots that I’ve come across. Believe me, if you think that comprehensive school teachers are bad – and many (most?) are – Uni lecturers are, in many cases, considerably worse (mainly because they are hired primarily to research, not to teach). Universities have stuff all to do with meritocracy.
On topic, in order to maximise benefits of a flat rate tax, the whole system has to be changed. You know this 91.5% marginal tax rate? Is it marginal tax rate? No, it’s withdrawal of benefits, i.e. money given to the illustrated family by other people (who are taxed to the hilt anyway) so the this family can afford their kids. Let me clarify: I, as a single man, pay exorbitant Council Tax to pay for this family’s kids’ nursery. I pay exorbitant rates of tax on my personal income, the business income and my workers’ income, to benefit a couple so that they can afford to have children and (presumably) live in a house rather bigger than my one bedroom flat.
We are not talking about marginal tax rates here: we are talking about withdrawal of unearned income. No, hang on: it’s earned by someone else, and given, unearned, to our hypothetical family. So, were we to sweep away the entire benefits system and replace it with a CBI, we would automatically lose this 91.5% marginal tax rate rubbish.
There are things to be ironed out, but my economic revolution is taking place here, here, here and here. There is also a post on VAT, which I will have to rethink, and a couple of posts on Inheritance Tax here (with a Trackback to Jarndyce’s comment), and my reply here.
DK
The less scroungers taking the piss on “disabilityâ€Â
[James Earl Jones]
Ah, Jarndyce. Yet another step closer to the dark side. Join the right wing. It is your destiny.
[/James Earl Jones]
“Why?”
Because in social rented housing there isn’t the trade off between price and quality of area that you get in the private sector. For this reason and because there’s a massive scarcity of social housing in general in London, there can be no market for it. Cut people’s incomes by introducing a CBI (and for many it will be an income cut), and you’ll be forcing poor people to either (a) move en masse to other regions of the country or (b) to take up any job they can find, no matter how badly paid, which pushes the balance of power firmly back in favour of employers, exactly the opposite of the intended effect.
By the way, I’m unconvinced by the assertion that there’s loads of decent jobs out there, particularly as the only example given so far is one which only the most able bodied and reckless could consider.
I didn’t say there were loads of decent jobs. Just loads of jobs. For instance, I’m pretty sure I could get myself on a construction site, or into a call centre, or waiting tables somewhere by the end of today. Shit pay, crap hours, and so on. But if I’m able to do that, why should taxpayers pay for my lifestyle if the only thing stopping me is that I’m unwilling? And a CBI gives me a credible threat to leave – no form filling, stigmatizing visits to the dole office and so on like now. And the CBI money is sufficient, even without working, to afford shared private housing (of which there’s a glut at the moment), or family social housing (with a flat child payment). Aussies and Kiwis manage it. Why shouldn’t Brits?
On necessarily limited expenditure budgets, the unwilling to work are taking money directly from people who can least afford it: say, single mothers who would like to work but find there are no Sure Start places nearby. That seems, not leftist, but Darwinian to me; the biggest bastards thrive, fuck everyone else. A CBI also removes the nonsensical situation of benefit withdrawal, which leaves people right now working 30 hour weeks for an effective 1.50 an hour… Aside from those who won’t work, and assuming those in real need like the disabled will have all their (non-monetary) requirements taken care of, who exactly is going to be left destitute?
Jarndyce,
Asolutely right, although this below sounds like a bit of a non sequitur to me. A sort of rich bashing for the hell of it.
“On necessarily limited expenditure budgets, the *unwilling to work are taking money directly from people who can least afford it*: say, single mothers who would like to work but find there are no Sure Start places nearby. That seems, not leftist, but Darwinian to me; *the biggest bastards thrive, fuck everyone else*”
DK
“I’m pretty sure I could get myself on a construction site, or into a call centre, or waiting tables somewhere by the end of today.”
Perhaps. And perhaps someone who isn’t young or physically able and who has to look after children couldn’t. I don’t think we should assume that people whose benefits have been cut (if that’s what the CBI would amount to for some) will automatically be able to promptly get a job. Throw in free childcare for all, though, and you’re a significant part of the way towards convincing me. An adjustment for the significant differences in costs of living between regions too, because it’s not just rents that are higher in London – everything else is more expensive too.
“why should taxpayers pay for my lifestyle if the only thing stopping me is that I’m unwilling?”
But that would still happen with a CBI, perhaps more so in fact, if monetary benefits aren’t lower and all the stigma and hassle of being unemployed and relying on JSA is removed.
“And the CBI money is sufficient, even without working, to afford shared private housing (of which there’s a glut at the moment), or family social housing (with a flat child payment). Aussies and Kiwis manage it. Why shouldn’t Brits?”
What, single Aussies and Kiwis are living in London on £100 a week? All the ones I’ve ever met have jobs, which I imagine they find easier to get than your average unemployed council tenant because they’re young and skilled, plus they usually come with significant savings or the promise of a bail-out from home if things are hard, plus they don’t usually have children. No, again, this is not a good example: I can certainly see the attractions of the CBI in principle, but it doesn’t fill me with confidence if its proponents are only looking at the impact on those least likely to be affected.
Kids, and people who begrudge them : –
Dev’s K in this case : –
“No, it’s withdrawal of benefits, i.e. money given to the illustrated family by other people (who are taxed to the hilt anyway) so the this family can afford their kids”
That’s certainly one way of looking at it.
Alternatively “so that the future of society is secured by a stable demographic profile”.
Or “so that children aren’t put at risk by catastrophic family events”
Or even “so the bodies don’t pile up in the streets”.
Children aren’t possessions to be afforded.
Also the consequences to the economy of the rate of childbirth reducing to an “affordable” level would be far more dangerous than the maintenance of the still pitifully low levels of state support currently grudgingly and inefficiently provided.
Jim: obviously, this has gone a bit dead, but just to make clear: IMO any decent society, especially one based on the assumption that all must work to live, ought to be making provision for decent childcare for those who have no other option. As Dave says above, aping the words of George Benson if I recall correctly, “the children are our future”.
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