Archive for the 'Poverty and Inequality' Category

Would a Citizen’s Income make some people poorer than they are today?

The notion of a Citizen’s Income, an unconditional income for every individual as a right of citizenship, has been around for thirty years, thanks in no small part to the efforts of author and director of the Citizen’s Income Trust Dr Malcolm Torry. In today’s guest post, Dr Torry gives clarity and background to the recent debate over whether a Citizen’s Income would really leave some low-income families worse off.

Malcolm Torry, photo for websites, 2015An unconditional income for every individual as a right of citizenship would help to solve the problem of poverty and would create a more just society. This is no doubt why the Green Party voted to include a Citizen’s Income in its manifesto for the forthcoming General Election.

The details have not been published, but what is known is that the party intends a Citizen’s Income of £72 per week for every adult (less for children and young people, and more for elderly people), and that it would pay for it by abolishing personal tax allowances and means-tested benefits.

Current controversy around the Citizen’s Income was caused however by Andrew Neil’s interview with Natalie Bennett, the Leader of the Green Party. He suggested that because people would lose their personal tax allowance of something like £10,000, and would only receive £3,500 in Citizen’s Income, they would be worse off.

In making this suggestion it is clear that Neil had not understood that the cash value of a tax allowance is the value of the allowance multiplied by the tax rate; and Natalie Bennett didn’t pick him up on the mistake.

But even though the logic was erroneous, the idea was out there that a Citizen’s Income would lose people money.

Problem

The Green Party scheme might be similar to the Citizen Income Trust’s illustrative scheme that the Work and Pensions Select Committee published as evidence in 2006 and updated in 2013. There is no problem with affording this scheme, as the abolition of personal tax allowances, the abolition of means-tested benefits, and the restriction of pension contribution tax relief to the basic rate, would save enough money to pay for the whole of the UK population’s Citizen’s Incomes: but there is a problem with it.

For some low income households their Citizen’s Incomes would more than replace the value of their lost personal tax allowances, but they would not also replace the whole of their abolished Working Tax Credits.

Because the Citizen’s Income would never be withdrawn, additional earnings would produce more additional disposable income than additional earnings can produce in the context of means-tested benefits, so households suffering small losses at the point of implementation of a Citizen’s Income would be able to make them up quite easily by earning a little more. But this was clearly not a total solution, so more work was required.

In 2012 I used the Euromod modelling software maintained by the Institute for Social and Economic Research at the University of Essex to quantify the losses that low income households would experience; and during the summer of 2014 the Citizen’s Income Trust studied a number of schemes similar to our illustrative scheme. We found that we could reduce the losses but not eliminate them. So the search began for alternative methods of implementation.

Alternative

Work I subsequently carried out using Euromod showed that a revenue neutral Citizen’s Income scheme need not impose losses on low income households at the point of implementation if means-tested benefits are left in place and households’ Citizen’s Incomes are taken into account as income when their means-tested benefits are calculated. The 2012 and 2014 results were published together in an Institute for Social and Economic Research working paper and have been republished in a recent edition of the Citizen’s Income Newsletter.

The Guardian’s Political Editor, Patrick Wintour, then read our website, telephoned me for a discussion, and wrote an article stating that the Citizen’s Income Trust had said that the Green Party’s Citizen’s Income scheme would impose losses on low income families.

We had not said that – in fact, we had never commented on the Green Party’s scheme, except to note that they intended to develop one for their manifesto: but by noticing the similarities between our illustrative scheme and what the Green Party had so far said about theirs, Patrick Wintour had drawn his own conclusion and published it as if it was ours.

“…it is perfectly possible to implement a genuine Citizen’s Income of £72 a week without imposing losses on low income households…”

What he did not emphasise, which he might have done, is that we had proved that it is perfectly possible to implement a genuine Citizen’s Income of £72 a week without imposing losses on low income households if means-tested benefits are retained and households’ Citizen’s Incomes are taken into account when their benefits are calculated.

What other journalists have correctly noted is that if additional tax revenue is raised, either through higher Income Tax rates, through the implementation of a financial transaction tax, or through some other new tax, then a larger Citizen’s Income would become affordable. This would eliminate losses on low income households, and possibly on all households, without means-tested benefits having to be retained.

On the plus side, Patrick Wintour’s article, and the many articles that have followed it, in the Guardian, the Times, the Financial Times, and elsewhere, have stimulated a substantial increase in the level of the debate, which is exciting for the Citizen’s Income Trust. We have never before had so many people asking to join our mailing list, our website has never experienced so many daily visits, and we have never had so many new Twitter followers.

Later this year  Policy Press will be publishing my new book, 101 Reasons for a Citizen’s Income. This will be a short introduction to the subject, and cheap enough to enable readers to give copies to their friends, colleagues and relatives.

The need for the book is clearly urgent, and I’m working as hard as I can to finish it.

You can keep up to date with Citizen’s Income by following them on twitter @Citizensincome


Torry-MoneyForEveryoneDr Malcolm Torry’s book Money for Everyone: Why we need a Citizen’s Income (Policy Press, 2013) is available at a 20% discount from the Policy Press website – here.

His new book 101 Reasons for a Citizen’s Income publishes later this year. Sign up to our newsletter to get the latest information on forthcoming publications, be part of the Policy Press community and access members special offers.

The Citizen’s Income Trust was formed from a group of people who had gathered together thirty years ago to discuss how they might promote debate on a Citizen’s Income (then and sometimes still called a Basic Income), they became the Basic Income Research Group, and then the Citizen’s Income Trust. They promote debate on the desirability and feasibility of a Citizen’s Income. They publish the Citizen’s Income Newsletter, maintain a library and a website, hold meetings and conferences, and respond to requests for information. They run on voluntary labour and a shoestring budget. More information is available via their website – here.

The views and opinions expressed on this blog site are solely those of the original blogpost authors and other contributors. These views and opinions do not necessarily represent those of the Policy Press and/or any/all contributors to this site.

Happy National Voter Registration Day 2015 #TakePower

One of the things we have been talking about at Policy Press is how we can do more to affect social change. Given that this is an election year our first area of focus is around increasing youth voter participation and so we are pleased to be supporting National Voter Registration Day today. Alison Shaw shares her thoughts on why Policy Press are supporting the campaign…

Policy Press - 018 resizeThe Scottish Referendum in September last year had the highest voter turn out in recent history, with a staggering 84.59% of people voting. The election enabled 16 – 17 year olds to vote for the first time in the UK and over 100,000 of them turned out, shattering the idea that young people as a whole are disengaged by the political process. 

Of course turning up at the polling station and making your mark in the voting booth is really the end point of a much longer journey – and one that starts with making sure that people are registered to vote.

Living in a democracy, as we do, voting is the main way in which we all have the power to make our voices heard. Consequently we’re supporting National Voter Registration Day (#NVRD) today. The campaign was set up in response to the lack of education and awareness around voter registration in the UK and last year NVRD registered 50,000 people. Raising the bar even higher, this year they have set a target of registering 250,000 people.

417-2NVRD focus on encouraging young people to register to vote and a quick look at the figures show why this is such an important group to focus on. In the 1964 general election just over 76% of 18 – 24 year olds turned out to vote. By 2010 that figure had fallen to 52% – though that was at least up on the 38% of young people who had turned out to vote in the 2005 general election.

What worries me is the sense that we have moved from a position of action and activism in the sixties, to a place of increasing youth voter apathy from the nineties, to a position now, potentially, of actively choosing not to vote. Whilst influential celebrities such as Russell Brand have done a sterling job of putting politics into the spotlight for a more disengaged generation, the idea of actively not voting as a way to give voice to the opinion that those who govern us do not fully represent us, is deeply counterintuitive to me.

I believe that not voting is a way to give those who go on to govern us more power not less. The lack of an overall majority in the 2010 general election left us with a hung parliament, resolved by the coalition of Conservatives and Liberal Democrats. In effect the Conservative party became the first party on the basis of achieving only 36% of the overall vote. By not voting, we effectively give politicians a mandate to do as they see fit, irrespective of whether that is in our best interests (and with a good chance that it won’t be).

Voting now is more important than ever. Since 2010 we have seen the rise and rise of austerity measures in politics and the impact that has on the lives of everyday people, including young people. Nearly 17% of 16 – 24 year olds are unemployed, and those who have opted to go to university will start their working lives with high levels of debt, and no guarantee of jobs when they graduate.

I believe we have a responsibility to be actively engaged in our democracy and to actively engage other people, including young people, in the process of democracy. What is positive is that we have access to more information, analysis and opinion on politics and policies today than we’ve ever had in modern history. And more than ever it would seem people are accessing this information from a variety of different sources, hungry for information they can trust.

The first step however is to make sure that people are registered to vote. Then, and only then, can we take the next steps to support them on that journey to the polling booth. We will be watching with interest today and engaging with bitetheballot.co.uk activities over the coming months, keeping you updated on our progress here. #TakePower #NVRD

If you enjoyed this, you may be interested in reading…

….the first in a new election series from the University of Bristol called Speakers’ Corner:

Speakers’ Corner: Have the Liberal Democrats lost the student vote?

Getting By, getting published and getting to ‘that London’

Writer, academic and guest blogger Lisa Mckenzie provides a personal and powerful insight into what it means to see her book Getting By published this week.

Lisa Mckenzie, author of 'Getting by'

Lisa Mckenzie, author of ‘Getting by’

After a lifetime of working class experience (mine as well as those in the book) and ten years’ of research, Getting By, is being published.

I have mixed feelings about reaching this stage of my research and my life: I am nervous about its publication, but also about the route my life is taking. I appear to have become part of the establishment at the London School of Economics, and, heaven help me, in ‘that London’.

The anxieties I have over my book becoming an item that you can hold in your hands, and something people can buy, are I suppose the normal anxieties every writer has when their thoughts are allowed out of their heads and into the public domain. Will anyone read this book? I hope they do, is my first reaction, quickly followed by, I hope they don’t.

With this book there is an added anxiety about how I have represented the people who have given me their time, their stories, allowed me to share in their lives. I carry a responsibility, as all researchers do to their respondents, to ensure they are not misrepresented. The way working class people, especially those who live on council estates, are misrepresented is at the heart of this book, and at the heart of the activism I undertake.

Devaluing and dehumanising

I know first-hand the painful consequences of what happens when working class people are devalued, what it means to be ‘looked down on’, ‘laughed at’, ‘ridiculed’ and despised. It hurts, and it is damaging. This type of institutional devaluing of any human being is also dangerous.

“the process of devaluing people…has been at the root of fascism, racism, slavery, and capitalism”

Without being too dramatic (actually why not, it is dramatic), the process of devaluing people is a way of dehumanising them which has been at the root of fascism, racism, slavery, and capitalism. It allows for the justification of the process and outcome of inequality, where some people can be treated badly, and/or cruelly while others receive equally unfair societal advantage.

The essence of this book is to show that the people who live on St Ann’s council estate in Nottingham have been subject to unfair disadvantages because they are working class, because they live in social housing, because they are low paid, unemployed and precarious. The book also makes clear that this kind of disadvantage, and any systematic devaluing of groups of people is structural, purposeful and historical.

People ‘like me’

I left school before I was 16, worked in a factory making tights for nine years, and am now researcher, author, teacher at the LSE, and in ‘that London’.

In 1984 when I left school at the beginning of the Miners’ Strike, education was not for the likes of me. My school careers interview consisted of asking me which factory I wanted to work in, and had I got one lined up? I said ‘yes thank you I’m going to work with my mum’, and I did.

“I believed the rhetoric and thought that it was my fault: I hadn’t worked hard enough at school”

My own story demonstrates clearly and obviously that I was subject to the unfair disadvantages that class inequality bestows on people ‘like me’. I, like many, believed the rhetoric and thought that it was my fault: I hadn’t worked hard enough at school and I wasn’t interested in education as a child.

However (and fortunately) that changed as I somehow found myself doing a sociology degree at the University of Nottingham as a mature student. It didn’t take me long to understand that I should have always been in higher education.

1415838227-class-war-women-wear-red-at-poor-doors-aldgate-protest_6252752A university education is a remarkable thing, and I am grateful for it, and to those who have imparted their knowledge to me, helped me and supported me. However that doesn’t stop me from being angry for my friends, my family, my community and my class, that the process of de-valuing working class people hurts them, and benefits others.

A question of representation

Consequently it lies heavy on me that I represent people who I think of ‘like me’ fairly and accurately. Does this mean that I show the people of St Ann’s in Nottingham as tireless working class heroes, chirpy in the face of inequality like the Downton Abbey servants? The deserving, humble, and not-angry-at-all working class? I’m sure those who are advantaged by our disadvantage would like that.

Or do I represent them as downtrodden victims of the endless misery that class distinction, and class inequality produces, perhaps in the way that George Orwell does in the Road to Wigan Pier?

And of course there are other ways to represent working class people and the neighbourhoods where they live as one-dimensional ghettos full of gangs, drugs, sex, and violence. This view would definitely grab the headlines give me a bit of fame, perhaps allow me to curry a bit of favour with the Daily Mail, and even get the ear of a Minister, they love that sort of thing.

None of this would be true, it wouldn’t be fair, and it would say nothing about the complexity of family life, community, and inequality in Britain today, or in actual fact, ever.

So what I have tried to do is bring to life the life, the people, and the situations I have known and lived. These are all of the above – heroes, villains, victims – and everything in between.

Stories from the ‘inside’

And lastly, since I have been in constant turmoil and anxiety of my own class position and how it relates to this book, my research, and now my life… why did I write this book at all?

I wanted and still want to tell the stories from the inside, from the position of a working class woman, with a common Nottingham accent. From the position of an academic who doesn’t know the correct grammatical use of ‘borrow’ and ‘lend’. From a granddaughter whose Granddad couldn’t read and write, and died from emphysema from working down the pit his whole life. And whose Grandma had 10 children and only left Nottinghamshire to go to Skegness for our holidays. She had never been to ‘that London’.

Getting by [FC]Getting by publishes on Wednesday 14th January and copies can be purchased at a 20% discount from the Policy Press website – here

The views and opinions expressed on this blog site are solely those of the original blogpost authors and other contributors. These views and opinions do not necessarily represent those of the Policy Press and/or any/all contributors to this site.

Austerity Christmas: Why are the most vulnerable footing the bill for the country’s debts?

In addition to the revelry and merry making, Christmas is a time for reflecting on the past year. Director Alison Shaw looks back on the political play of 2014 and throws out some tough questions well worth ruminating on over the turkey and the cake this holiday season.

Policy Press - 018 resizeWhilst we publish work at Policy Press that challenges social problems, our team, like most of our readers and community, will be spending time this Christmas in comfort with families and friends (for which I am extremely grateful). I am conscious however that there are an enormous number of people who face a Christmas of poverty, distress and loneliness.

I can’t help but think, at this time of giving gifts and consuming an abundance of food, what about those people who cannot do this for their children and family, who are suffering from yet more cuts to their income and the services that support them? How do you actually live when your benefits have been sanctioned and you have no money for a month or three – nothing – zero. How about this for Christmas cheer:

“It’s Christmas Day. You don’t do any jobsearch, because it’s Christmas Day. So you get sanctioned. For not looking to see if anyone has advertised a new job on Christmas Day.” (Source: Poverty Alliance)

It is positively Dickensian. And not in the warm, comforting glow of A Christmas Carol.

The surprised look on the childrens faces when Father Christmas tells them he has fogotton the presents Credit: TheirHistory

1930s: The surprised look on the childrens’ faces when Father Christmas tells them he has forgotten the presents. Photo credit: TheirHistory

Reflecting on 2014, we have seen tough public spending cuts in the UK with promises of substantially more taking us back to 1930s level of public spending. What pains me is the severe hardship some of our most vulnerable citizens are in. There is constant talk from all the main parties of reducing the deficit, a seeming consensus, but what surprises me is the lack of animated public debate about this assumption. Surely the political decisions as to where the cuts happen, how much money needs to be saved and over what period needs questioning when the poor and vulnerable are seemingly bearing the biggest burden.

historic picture

I briefly looked at the historic picture to gain a longer view. According to the ONS September 2014 data General Government net borrowing (‘deficit’) was 5.9% of GDP in 2013/14 and gross debt was 87.8% of GDP. I think our debt has ranged from over 200% of GDP during World War II to as low as 25% in 1992, with the period from the 1920s to the mid 60s seeing debts of at least 100%, and often much higher, which seems to suggest we can live for long periods with a debt that is higher than the current one.

“..it makes me question whether the mantra that we have to cut the deficit is in fact a political position…”

I guess the key issue is the cost of servicing the debt, and again a longer view helps put the current situation in context: post World War II we paid about 4% of GDP in interest and by the 2000s it had dropped to 2%. The cost is now expected to be around 3%. So it makes me question whether the mantra that we have to cut the deficit is in fact a political position being taken around the size of government and public spending and not based on a necessity, as we are led to believe.

So, the point of all this is to really question why we are pulling back from helping those most in need? I admit to being incredulous that when we are one of the wealthiest countries in the world over 900,000 UK citizens had to be fed by The Trussel Trust food banks in 2013-14 because they could not eat without it. How did we get here?

I’m grateful that there is a growing body of accessible data on the subject of government spending and that we’ve been able to contribute to this over the past couple of months, enabling people to take a closer look at the numbers through publishing books such as Good times, bad times and Why we can’t afford the rich. Getting that kind of research out into the public domain is to my mind essential and it is only by increasing awareness of the cold hard facts, of encouraging people to interrogate the numbers with ever greater attention to detail, that we’re really going to be able to call our politicians to account. This of course is going to be something that will become ever more important as we run into the General Election in the UK next year.

Robin in the snow, Martin Mere. Photo credit: Gidzy

Robin in the snow, Martin Mere. Photo credit: Gidzy

Thanks to the tremendous support we’ve received this year from our authors and editors, customers and readers, retailers and suppliers. Policy Press has had a fabulous year publishing some really ground-breaking and influential work. As we all step back and take a few days’ break I hope that there will be time for reflection, as well as time to recharge batteries, ready to fling ourselves back into the fray in the New Year and keep on keeping on to get us to a better, fairer and more just society.

And now, stepping down from the soap box for 2014, I’d just like to wish you all a truly wonderful Christmas and New Year from everyone at Policy Press.

FACT: We can’t afford the rich

Academic and Policy Press author Andrew Sayer latest book Why we can’t afford the rich publishes today. In today’s guest blog post Andrew provides some insights into what motivated him to write the book and why he believes we really can’t afford the rich…

Sayer0002Yes, I really do mean we can’t afford the rich. The richer they are, the more likely they are to be extracting more wealth than they create.

It’s not about rich individuals but about the mechanisms by which they accumulate excessive wealth – wealth that others, by and large, have created.

As I explain in the book, these mechanisms are both unjust and dysfunctional, and have a lot to do with the current economic crisis. They primarily involve controlling key assets – like land, property and money – that others lack but need, and using them to extract wealth via rent, interest payments, profit from production, dividends, capital gains, and speculative gains.

Here’s an example: you have, or buy, a house purely to rent out to others. The production costs of the house have already been paid for. Once you have deducted any maintenance costs, then that rent is unearned income, as are any capital gains resulting from rising house prices. The house already existed and was paid for, so the rent is something for nothing, because you haven’t provided anything that didn’t already exist.  Continue reading ‘FACT: We can’t afford the rich’

Inequality: The debate that won’t go away

Policy Press Director Alison Shaw has been passionately engaged with the subject of inequality for many years, trying to puzzle out the causes and what can be done to resolve the situation. This month she is pleased to be launching two books that she believes add to the debate in an engaging, accessible, rigorously researched way.

Policy Press - 018 resize“As a young person, a now distant memory, it seemed perplexing to me why some people had immense wealth and privilege and others had nothing, even within wealthy Western societies never mind globally.

This somewhat naive question has led to me to try to understand over the years why this is the case, and more importantly perhaps, what can be done. What happens when you have so little that you can’t feed your children? When you have to borrow money to get through a week but this means you get into further debt the next? When jobs are poorly paid and insecure (if you can find them at all) and when the much heralded welfare safety net has holes in it big enough to regularly fall through because the system can’t keep up with changes in work patterns and so you get no money? What then? Continue reading ‘Inequality: The debate that won’t go away’

Myth busting: How the Treasury really spends your money

In light of the Treasury’s example ‘annual tax summaries’ and the implications in terms of welfare spending, academic and Policy Press author John Hills has shared some infographics with us to help us understand the difference between what we’re told and what the numbers actually show.

According to Hills’ research, when the social security budget was described to members of the British public – covering state pensions, child benefits, tax credits for those in work, benefits for unemployed and disabled people – half of people said they thought that 40% or more of spending went on the unemployed. The actual figure is closer to 4%. Continue reading ‘Myth busting: How the Treasury really spends your money’


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