The Institute for Fiscal Studies has published Living Standards, Poverty and Inequality in the UK: 2016: ‘Median income for those aged 60 and over is now 11% above its 2007-08 level, for 31- to 59-year-olds it has returned to its 2007-08 level, but for 22- to 30-year-olds it is still 7% below (despite growing by 4.5% in the last two years as the labour market has recovered). … The ratio between incomes at the 90th and 10th percentiles in Great Britain fell from 4.4 to 3.9 between 1990 and 2014-15, but the share of income going to the top 1% rose from 5.7% to 7.9%. … For the poorest fifth of children, the proportion of net income coming from employment is now 42%, up from … 27% in 1994-95. The proportion coming from benefits has fallen from 73% to 61% over the 20 years. In contrast, middle-income children now get 30% of household income from beneifts, compared with 22% in 1994-95, while the proportion coming from employment has fallen from 77% to 70% … Eliminating household worklessness entirely would reduce child income poverty by no more than 5 percentage pionts, from 28% to 23% (and probably less than that). to the extent that the government wishes to improve the current living standards of children (as well as the ‘life chances’), its heavy emphasis on worklessness looks somewhat narrow’ (pp. 3, 16, 39, 55).
On the 11th October 2017 the Institute for Policy Research at the University of Bath held a research seminar on the state of the Citizen’s Income debate. For further details, see
The Institute for Social and Economic Research has published research that ‘disincentives arising when means-tested benefits are taken away from people who increase their earnings may be stronger than those implied by the financial losses alone. Low skilled, loss-averse individuals may be less inclined to take up paid work than their better off peers partly because the environment they face triggers different perception and behavioural cues. … A radical approach would be to reconsider the prominence of means-testing in the British system in favour of a more universalistic and/or contributory system paid for by higher taxation’, ‘Losing benefits hurts more than paying taxes and this should be reflected in how we frame and design policy’, an LSE blog. For full details of the research, see Silvia Avram, Benefit Losses Loom Larger than Taxes: The Effects of Framing and Loss Aversion on Behavioural Responses to Taxes and Benefits.
The Work and Pensions Committee has heard evidence about the way in which Concentrix, under contract to HMRC to manage to fraud and errors in the Tax Credits system, sent letters to claimants and stopped their Tax Credits if they did not respond. Concentrix is now to lose its contract. The Chair of the committee, Frank Field MP, said ‘The Committee was astonished by the extraordinary evidence we heard. From Concentrix we saw a company desperately out of their depth and unable to deliver on the contract awarded to them by HMRC. From senior HMRC officials we saw a palpable disregard for the human implications of this gross failure of public service. From the tax credit claimants we saw dignity in the face of appalling and traumatic experiences’. For further details, see the article in The Independent: ; and the committee hearing.
An update on the Finnish Basic Income experiment
The preliminary report from Kansaneläkelaitos Kela; Social Insurance Institution of Finland Kela, From idea to experiment. Report on universal basic income experiment in Finland, originally published in Finnish in March 2016, is now available in English. The Finnish government has now published a consultation document on a proposed Basic Income experiment, and Olli Kangas, Research Director at Kela, has issued an article that discusses the differences between the recommendations in the preliminary report and the government’s proposal: . The experiment is due to begin in January 2017.
On the 15th November the ICAEW (Institute for Chartered Accountants of England and Wales) held a consultation on four Citizen’s Income implementation methods described in their new publication, How might we implement a Citizen’s Income? Three groups of policy experts created methods for scoring an implementation method; participants then voted on the scoring methods in order to choose one of them; and the groups then used that scoring method to score the four implementation methods described in the report. The three groups’ scores were then combined to give overall scores. (Nobody is claiming that the groups were in any sense representative of anything other than themselves; and whether it is legitimate to add feasibility and desirability scores to each other is of course debatable).
The results were as follows:
|Feasibility score||Desirability score||Feasibility score + desirability score|
To read the report, click here.
On Saturday 19th November, the BBC World Service broadcast an ‘In the Balance’ programme about Universal Basic Income.
On the 9th November, Professor David Piachaud led a Centre for the Analysis of Social Exclusion seminar at the London School of Economics on ‘Citizen’s Income: Rights and Wrongs’.