The General Election is now over, so it is appropriate to review what the major parties said about the benefits system in their manifestos. The manifestos divide into three groups:
1. Means-testing is the right approach, and Universal Credit will reduce disincentives. The Conservative Party’s manifesto says this: ‘We will deliver Universal Credit, in order to provide the right incentives for people to work; target support at those who need it most; reduce fraud and error; and streamline administration of the welfare system.’ (p.28). Similarly, the Liberal Democrat manifesto promises to ‘complete the introduction of Universal Credit (UC), so people are always better off in work. We will review UC to address any issues regarding “cliff edges”, and ensure increased working hours are properly incentivised for all claimants.’ (p.43).
2. We’re not sure. The Labour Party manifesto ‘supports the principle behind Universal Credit – that there should be a smooth transition into work – but it must be affordable and fit for purpose, so we will pause and review the programme.’ (p.47). UKIP’s manifesto doesn’t mention Universal Credit or any alternative social security mechanisms.
3. We want to change the structure of the benefits system. As readers of the previous edition of the Citizen’s Income Newsletter will know, the Green Party’s Spring Conference in 2014 voted that Citizen’s Income should be Green Party policy. Accordingly, the manifesto says this: [5]
The Green Party thinks the time has come to reconsider the whole tax and benefits system and to rebuild it from the ground up – a system not built on punishing and isolating people, making them jump through hoops to get hand-outs from the state, but one that goes back to the founding principles of the welfare state, in the belief that, as members of society, we have a shared responsibility for one another’s well-being in times of need and a shared commitment to helping others play the most active role they can in our society. The idea in a nutshell is this. Scrap most of the existing benefits apart from disability benefits and Housing Benefit. Abolish the income tax personal allowance. Then pay every woman, man and child legally resident in the UK a guaranteed, non-means-tested income, sufficient to cover basic needs – a Basic Income. For those who earn, the Basic Income compensates for the loss of the personal allowance. Children will receive a reduced Basic Income, Child Benefit. Pensioners will receive their Basic Income at a higher level, as a Citizen’s Pension.
As the manifesto suggests,
The advantages are many and we support the principle of a Universal Basic Income because it has the potential to:
- Act as a springboard rather than a safety net; people can take jobs without fear of prosecution for working while on benefits;
- Prevent people falling into absolute poverty rather than trying to help them when they are already there;
- Reward people for all the work that’s done outside the formal economy, and most of this work is done by women;
- Encourage more of this unpaid activity, much of which – such as food growing, fixing things that have gone wrong, converting older buildings, protecting the natural environment – is a vital part of a transition to a more sustainable economy;
- Avoid the poverty trap in which an increase in wages leads to a massive loss of benefits;
- Make everyone who earns, however little, a citizen who contributes to society by paying taxes, giving almost everyone a stake – raising the personal allowance takes us in precisely the wrong direction;
Be simple to administer and easy to understand. We would use the forthcoming Parliament to
- Consult upon this scheme,
- Have government departments carry out and commission research (including research into behavioural changes and how
- Basic Income would affect those on the lowest incomes and child poverty), and
- Draft appropriate legislation, with a view to implementing the full scheme in the following Parliament. (p.54)
Similarly, the Scottish National Party says this: ‘We’ll prioritise the immediate scrapping of the Bedroom Tax and a halt to the rollout of Universal Credit … . The current tapers for Universal Credit have been set too low, which means claimants will still be caught in the benefits trap, with clear financial disincentives in place for work.’ (pp.5, 16)
Given that genuine reform of the social security system in the UK along the lines of a Citizen’s Income will probably take more than one parliament ( – not because a Citizen’s Income is complicated, but because the present system is), all-party agreement will be required. Universal Credit, although a means-tested benefit, might be a useful first step towards a Citizen’s Income, so there need be no contradiction between the different parties’ positions on whether to base the benefits system on means-testing or on universal benefits. This really is an issue over which the parties in the new parliament might be able to co-operate.