The Citizen’s Basic Income Trust’s review of the Green Party manifesto’s section on Universal Basic Income
The Green Party’s manifesto for the 2019 General Election proposes a Universal Basic Income (UBI), because it believes that ‘financial security is a key building block of a good society. No one currently in receipt of benefits will be worse off under UBI – and many will be much better off’ (p. 26).
The manifesto states that the adult rate of UBI will be £89 per week, and that ‘someone earning the minimum wage and working 37.5 hours a week would see their income increase by 10 to 15% through UBI’. The UBI would be phased in; it would be ‘sufficient to cover an adult’s basic needs’ (p. 26); and it would replace most existing social security benefits.
The pensioner rate would be £178 per week. Disabled people would receive a ‘supplement to the UBI, as will lone parents and lone pensioners … Families with an income of under £50,000 per year will receive an additional supplement of £70 per week for each of their first two children and a further £50 per week for each additional child. Families with an income of over £50,000 per year will receive smaller additional supplements per child, with the amount decreasing further the more a family earns’ (p. 27). Housing Benefit will continue for those already on it.
The funding would be provided by the Green Party’s proposed carbon tax (p. 27) and by removing the Income Tax Personal Allowance (p. 73).
The Citizen’s Basic Income Trust recognises the Green Party’s proposal as a significant contribution to the Citizen’s Basic Income debate. The plan, once phased in, would fulfil the main aim of the proposal: to provide a secure layer of income on which individuals and families could build. The plan would offer better employment incentives for people currently on means-tested benefits, because the UBI would not be reduced as earnings rose; and the fact that everyone would receive a UBI would contribute to social cohesion.
Manifestos are inevitably condensed summaries of often complex proposals, and there are issues on which further detail would be welcome:
A Universal Basic Income is an income of the same amount for everyone of the same age: so, paying more to pensioners than to working age adults is entirely legitimate, but any other differentiation would not be. If a genuine UBI is to be paid, then the additions for people with disabilities, for lone parents, and for lone pensioners, will have to be separate benefits, separately administered and delivered.
The child supplements are income-tested, and so cannot be called UBIs. It would be preferable to pay entirely unconditional child supplements – for after all, the wealthier families to whom the proposed taper would apply would be paying more tax than they would be receiving in child supplements. If for some reason this route cannot be taken, then the child supplements should become entirely separate benefits, and not attached to the UBI.
The manifesto claims that £89 per week would be sufficient to cover an adult’s basic needs (p. 26), but £89 per week is far less than the EU’s poverty benchmark of £148 per week for 2019-20.
The manifesto suggests that the system proposed would be simpler than the current system. The UBI will be simple to understand and to administer if the additions become separate benefits, but if they do not then it will not be. And similarly, only if the child supplements are not reduced as household income rises can the proposal be simple to administer. The virtue of a genuine Universal Basic Income is that it needs no active administration. This aim will be met the various additions are separate benefits and the child supplements are the same for all children.
It is not clear to what extent the proposal has been tested for financial feasibility, nor have we been shown the evidence for the claim that no-one currently in receipt of benefits will be worse off. They might be. They will no longer be receiving an Income Tax Personal Allowance if they are employed, so they will be paying more Income Tax; they will no longer be receiving Working Tax Credits, Child Tax Credits, or Universal Credit; and their fuel bills will be higher because of the new Carbon Tax. It is possible that nobody currently receiving benefits would be worse off: but it is also possible that the scheme as a whole could prove to be regressive. Only microsimulation testing would be able to tell us whether there would be losers in the original lower gross income deciles, and how large any losses might be. Such testing would be complicated because the requirement to add a supplement or new benefit for lone parents and pensioners would be difficult to operationalise (which of course suggests that it would be intrusive and onerous to administer): but the attempt should be made. The absence of even a small Income Tax Personal Allowance means that the first £1 of income received by each person will be subject to income tax, leading to extra burdens on both taxpayer and the HMRC.
The verdict: It would take only a few changes to turn the Green Party’s proposal into a genuine Universal Basic Income; and if microsimulation testing were to show that the amended scheme would not impose significant numbers of significant losses on low income households, then the amended manifesto proposal would be an important addition to the set of feasible illustrative Universal Basic Income schemes.
The Citizen’s Basic Income Trust is a Charitable Incorporated Organisation, registered charity number 1171533. Its object is ‘to advance public education about the economic and social advantages and feasibilities of a Citizen’s Basic Income: that is, an unconditional, automatic and nonwithdrawable income paid to every individual as a right of citizenship’. The Trust is not aligned to any political parties, and it neither endorses nor declines to endorse any particular Citizen’s Basic Income proposals published by political parties. Its publication of reviews of Citizen’s Basic Income proposals published in political party manifestos is in fulfilment of its educational charitable object.
Anne Miller, Chair; Dr. Malcolm Torry, Director
To read the Green Party’s manifesto, click here.