An interesting consensus has emerged from recent reports on Citizen’s Basic Income.
The think tank Compass has published a new report, Basic Income for All: From desirability to feasibility, by Stewart Lansley and Howard Reed:
This paper examines some options for the introduction of a basic income scheme in the UK. It seeks to answer the central practical criticism that the payment levels are either too small to make a difference or too generous to be affordable.
A number of conditions are set that the scheme has to meet: the reduction of poverty and inequality; an increase in the universality of benefits; a decrease in means-testing; a reduction in the risk of destitution; affordability; few losses for low income households; and the avoidance of major changes to the existing tax and benefits system. The report then proposes a working age adult Citizen’s Basic Income of £60 per week funded by making changes to the current tax and benefits system.
There are minor differences between the Compass scheme and the scheme published by ISER last year. The former replaces Child Benefit and the Basic Income Pension with new unconditional payments, whereas the latter retains and increases Child Benefit, and retains the Basic State Pension and adds a small unconditional income on top. And although both schemes abolish the Income Tax Personal Allowance, and both make the same changes to National Insurance Contributions, there are minor differences between the two schemes’ treatments of Income Tax rates. But all of the differences are small. The two schemes are remarkably similar, and they satisfy similar sets of constraints.
Superficially different is a scheme recently published by the New Economics Foundation. The proposal is for a ‘Weekly National Allowance’ – an unconditional income of £48.08 per week for every adult over the age of 18 apart from those earning over £125,000. This looks remarkably like a Citizen’s Basic Income, and it would be one if it was paid to everyone. Also, it is funded by abolishing the Income Tax Personal Allowance, which is the same basic method as the Compass scheme and the scheme published by ISER. It would only require the Weekly National Allowance to be paid to everyone over the age of 18 for the incomes to become a genuine Citizen’s Basic Income. (High earners could be charged additional Income Tax to cover the additional cost and to prevent them from benefiting financially from the scheme.) It might be of interest that the report’s authors have chosen a name for the allowance that is very similar to the one proposed by a recent Citizen’s Basic Income Trust working group when it prepared draft illustrative legislation for a Citizen’s Basic Income: ‘Fair Allowance’.
It is a pleasure to see a new report from Compass, and a particular pleasure to see the New Economics Foundation engaging with the Citizen’s Basic Income debate. And it also a pleasure to see the two reports helping to build a consensus around a feasible Citizen’s Basic Income scheme.
For further reading:
Our review of the Compass report
The New Economics Foundation report
Our review of the New Economics Foundation report
The Citizen’s Basic Income Trust’s draft illustrative legislation for a Fair Allowance