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September 24, 2008

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Neil

So what's stopping one or both of the married couple getting full time jobs?

Giles

There are huge tradeoffs to be negotiated here: targetting money at the poor quite inevitably involves high marginal rates as the money has to be withdrawn. What would you do? Cut the level of benefits for the workless, increase the tax credit for those in work, and if the latter, how fast would you withdraw it? Nothing is easy in this area, except sniping. But I think in general what GB has done to the TaxBen system, (see Figure 18 of the IFS, "Has Labour made work pay?") has been one of his better things: inequality would be worse thisout it.

jameshigham

This is a major issue for me right now.

Marksany

There is an answer to benefit withdrawal rates causing very high marginal rates of tax to the poor.
Institute benefits that are not withdrawn at all, for everybody. Nothing else, logically, can fix the beneft withdrawl problem, which is the major cause of worklessness among the poor. The number of immigrants finding low paid work shows that the poor can get work, if it makes sense for them to do so.

tolkein

Marksany

At what level would you fix this benefit?

Mark Wadsworth

Great! The TBMT have been updated! Time for a bit of welfare porn, mehtinks!

As to Tolkein's question, I would start with the politically* and fiscally neutral Citizen's Income Trust booklet that assumes a basic benefit of £58 for adults (same as income support/JSA), a Citizen's Pension of £125 (same as Pensions Credit level) and a flat tax rate of 33%.

http://www.citizensincome.org/filelibrary/Citizen%27s%20Income%20booklet.pdf

Everybody is free to make up their own variations on this.

* i.e. it was co-written by a leftie Labour person, a Lib Dem, a closet Tory and a Ukipper.

Marksany

Tolkein, If you added up the costs of all the various welfare benefits there are and the cost of administrating them, I think the affordable citizen's income would be surprisngly high, and since any earned income does not reduce benefits, it can all be taxed at a flat rate. Net result would be a lot more people in employment, because it would be worth their while. Even small jobs, part time, short duration, stuff the benefits system does not work well with. Also there'd be a lot more people paying tax and therefore participating in the democratic system.

dsquared

Mark, a quick glance at page 112 of those tables reveals that the notional couple in Chris's example are in pretty bad trouble under your plan unless they've got a council house - with a £58/head (tax free?) CBI and 16 hours of work @ £5.52, taxed at 33%, their weekly income would be £175.17. That would give them post-housing cost income of £36.37/week if they were private tenants, versus £94.95 now. They do all right if they are LA tenants - their post-housing cost income actually goes up to £103.29 - but £2.59 per person per day strikes me as being very close indeed to starvation level in the UK.

dsquared

I did the calculation above assuming zero personal allowances because Mark's linked working paper seems to suggest they're going to be abolished, but even if you bring them back in at a level that takes someone doing 16 hours at minimum wage entirely out of the tax and NI system, this couple still go down to £65.52 per week. That's probably not actual starvation level but it's a 30% cut in their household income which looks pretty draconian.

Dipper

Left wing politics should be more than fairness. Liberation from chains of birth and circumstance, opportunity to fulfil your potential, right to control your own labour, equality of status.

Queing up at Brown's department of Fairness, having our equal lives handed to us by some all-powerful central authority shows a dead-end lack of ambition and imagination for the people.

Will

There's a point here that needs made, but calling it "negative wages" goes too far. Negative wages would be starting with nothing and having to "pay to play", not changing jobs and going from £140 a week to £120.

You make the mistake of accepting that benefit recipients are "not working". There are in fact certain conditions attached to the receipt of benefits, the meeting of which could reasonably be interpreted as work for payment.

So if I'm on the dole, my gross "wages" are

(JSA+HB+CTB+IT+NI)/T

where T=Time spent on approved jobsearch activities. If this comes to, what? ten hours a week - probably an overestimate for weeks where I'm basically mailing out CVs, but maybe not for weeks where I've got more than one or two application forms to fill in or interviews to attend, plus it's a nice round figure so let's run with it - then I'm currently on about £13 an hour: roughly half what I'm capable of earning in my professional field, but double what I'd get as an admin temp.

That hourly rate is deceptive, of course: I make more money working full time as an admin temp than I do signing on; but the point of equilibrium is around 20 or 24 hours a week, not 16. Working part-time is for mugs, and people with other sources of income that don't turn off automatically when they try to supplement them.

Sam

Neil:

Maybe they've got no useful skills and can't find full-time work. Maybe they've been out of work for so long that they need to ease back into a working routine. Maybe they're just lazy, but it doesn't really matter.

It is completely absurd that people can be in a situation where moving from being unemployed to being employed costs them money.

Mark Wadsworth

@ Dsquared

I am quite sure that the booklet says quite clearly that Housing Benefit and Council Tax Benefit are a totally separate issue and we will look at them separately. Which we did, different topic. You cannot minus off housing costs from the net income per the booklet.

http://www.citizensincome.org/discussion/index.shtml

And you assume correctly - we suggested that people get CI of £58 and pay tax at 33% on ALL their income, no personal allowance. That gives an effective personal allowance of about £9,000 (i.e. the point at which CI and tax paid nets off to nil).

I wanted them to suggest that people can choose between a £9,000 personal allowance OR £58 per week and no personal allowance but I was outvoted.

Marksany's explanation above is good, we didn't factor in dynamic effects of people coming off benefits.

dsquared

Mark, it's not a "different topic", given that the private sector average rent is what it is and people have to live in houses. And you absolutely *can* minus off the housing cost from the income, because the income is what they pay the housing costs out of. The cash income of this couple is £175. That's not enough to meet their unsubsidised housing costs and leave them with enough left over to live on. You either need a massive further subsidy to their housing costs (which blows out your revenue-neutrality calculations even if you can structure it in such a way as to not create withdrawal rate pinch points) or you need to conjure up literally millions of council houses out of nowhere; as far as I can see your working paper takes the second alternative.

Mark Wadsworth

@ Dsquared, the booklet only looks at income pre-housing costs. You have to compare like with like.

As to Housing Benefit, we batted various ideas back and forth, and came up with the idea discussed in my second link, that social tenants would just pay 20% of their income in social rent (i.e. instead of being asked to pay full rent and then claiming Housing Benefit and being asked to pay full Council Tax and then claiming CTBenefit). This would simplify matters greatly, reduce the overall marginal withdrawal rate to a maximum of 53% and be broadly fiscally neutral. You have to read the full paper for more details.

That only leaves housing benefit and council tax benefit for private sector tenants. The best idea that I have heard so far is to simply scrap HB and CTB for such people (as it is actually just a subsidy for private landlords) and just have Workfare jobs instead. The average HB/CTB claimed is about £100 per week, so why not have Workfare jobs paying £100 per week instead?

dsquared

I don't see how it's comparing like with like to ignore the fact that people live in houses. You can't ignore these things. And the answer to "why not have Workfare jobs paying £100 per week" is surely "because this would not be compatible with working 16 hours per week at minimum wage". If you're proposing a £100 flat rate weekly housing benefit, then it has the same problems of fiscal neutrality and withdrawal rates whether or not you make people do Workfare jobs for it.

By the way, even if you can solve these problems in the averages, there is a whole forest of problems waiting for you when we start taking into account the fact that there is geographical variation in rents; notoriously all these solutions to the problem of housing benefit (which as you know is the really big driver of all these pinch points that Chris blogs about) seem to end up assuming that you can constantly bus the unemployed around the country to where housing is cheapest. I'm not saying it's impossible but I've never yet seen the numbers add up.

Mark Wadsworth

@ Dsquared, It's not clear to me what point you are trying to make.

Allow me to restate:

1. What the booklet suggests is replacing a clearly defined list of benefits (Child Benefit, Tax Credits, Income Support, JSA, State pensions, Pensions Credit etc) with a clearly defined Citizen's Income at clearly defined rates with a single withdrawal rate (being the basic rate of tax) within existing expenditure constraints.

2. The booklet does NOT cover housing benefit/Council Tax Benefit or how these could be simplfied and replaced. The booklet does NOT suggest that these be scrapped, changed or anything else. The booklet basically glosses over/sidesteps these thorny issues.

So when you are comparing like with like, you have to compare pre-housing income per the TBMT with pre-housing income per the CI booklet. I'm not sure how much clearer I can make this.

3. The link I provided to a further paper on the CIT website explains how we could radically simplify the system of rents and benefits in social housing (again, on a fiscally neutral basis in such a manner as to keep marginal withdrawal rates as low as possible). I'd be grateful if you'd take the trouble to read it before you criticize things that we never said.

4. The CIT have never taken a view on the least worst way of dealing with HB/CTB for private tenants. What I said above was somebody else's idea and it's the best one I've heard so far. Perhaps you have a better idea, if so, please tell me.

dsquared

But for the family in question, housing benefit is four-sevenths of their pre-housing cost income. Pre-housing income isn't enough to pay rent at this level. Which means that most of the withdrawal rate calculations from pre-housing income in your working paper are meaningless, because the big driver of the withdrawal rates actually experienced is housing benefit. (Chris's point is different - the withdrawal rate of >100% is there simply because JSA has been foolishly set at six quid above the minimum income from working in the tables rather than six quid below, creating a pinch point of doubtful real-world interest).

Since your proposal raises the marginal tax rate on income from wages to 33% for the majority of taxpayers in order to pay a benefit more generous than JSA, it does raise the incomes of the poorest. But it doesn't affect the marginal rates unless you do something about housing benefit, which is surely the point you were trying to make.

(looking back, though, I was wrong in my "starvation" post, as I had not, at the time, realised that the couple with £175 CBI-plus-wages would also be receiving housing benefit - most CBI proposals I've seen beforehand have scrapped it - so sorry for that).

dsquared

In fact, we can see what happens to Chris's imaginary couple under Mark's plan with the current housing benefit arrangements in place by looking at the line for gross income of £200/wk, which gives nearly the same take-home pay as my £175/wk example. If we assume an unchanged housing benefit and CTB regime based on take home pay, they'd get household income post housing costs of £115.20. This would compare to £106.24 for the same household with only the CBI (take home pay of £116, roughly on the gross income line of £120). So for working 16 hours @5.52 = £88.32 earned income, you'd see an increase of roughly £10, a withdrawal rate of about 89%, which is (obviously, as it's driven entirely by the same benefit) nearly exactly the same as the current system.

So AFAICS, the housing benefit problem is the whole problem here. If your mate literally means "a workfare benefit", then it would be lost the moment someone started paid work, which would be a catastrophic pinch point (here we would literally be in the starvation example). If it's going to refer to a benefit that you can still get while getting some wage earnings, then it's going to have a withdrawal rate which if it's more tapered than the current one, is going to blow out the revenue neturality. You might be able to reduce the amount in order to improve the taper, but I'm guessing that if there were big improvements to be made here, HMT would have spotted them.

Mark Wadsworth

@ Dsquared

Agreed, the 85% withdrawal rate for Housing Benefit/Council Tax benefit would, if tacked on to the CI proposals pretty much defeat the object.

The HB/CTB issue can be split into two:

1. People in social housing (three quarters of HB claimants)

The second paper to which I linked sorts this out rather neatly (and this wasn't my idea originally, I just did the numbers).

Here's the link again:

http://www.citizensincome.org/filelibrary/doc/Housing%20Benefit%20Discussion%20paper.doc

2. People in private rented accommodation claiming HB/CTB.

Like I said, I have not yet found a perfect solution for this. My personal opinion is (having read books on this* and looked at all sorts of ideas), as mentioned, if you are a private tenant and lose your job, the local council offers to pay your rent/Council Tax if you take on a workfare job.

Average job would pay £100 tax free, plus you keep the £58 CBI (of course) = £158 (pre housing costs), assuming the job is for 4 days x 7 hours, that works out rather neatly at £5.52 per hour GROSS FOR NET.

There is NO PINCH POINT. If, in your one day off per week you find another full time job, even if only at NMW, great, your net wages are £129, so for an extra day work you keep an extra £29. Plus you still keep the £58 CBI= £181*.

* As against pre-housing income of £169 per the TBMT, Table 1.1d.

dearieme

The way to sell it to the masses, Mark, is to call it the "free beer policy".

dsquared

1. With regard to the LA tenants, as far as I can see the solution in your paper has a very obvious dynamic consistency problem in it; the revenue-neutrality assumption relies on the average income of council house tenants not changing, but the paper itself is clearly aware that the highest income tenants will have an incentive to leave the LA system.

2. With regard to the workfare plan, is this basically going to work as a guarantee of 28 hours of minimum wage employment per week then? If so, I think it clearly creates another pinch point at 29 hours of minimum wage employment (plus, I think your calculation doesn't take into account the £17.90 of council tax that the private sector tenant would presumably have to pay, unless CTB is going to be continued as previously)

Alianora La Canta

At the moment, I'm having to pay well over a third of my income in order to get to work. I'm also paying my own lunches on workdays instead of having meals paid for by other household members. In addition, I'm now having to pay for courses I need instead of getting them free (my employer can't afford to send me on all the courses I require for the job). I also lose out on subsidised glasses (which I require for my job, and my employer might not pay for). All this means that it's costing me an average of nearly £200 a month (or nearly £50 a week) in order to work. So anything below about twice JSA would put me in negative wages.

Luckily, my job pays somewhat more than that if I worked it full-time by the standards of the organisation I work for. Unluckily, it's only about half a working week (average 15.5 hours/week), and the Jobcentre won't let me have any benefits whatsoever in combination with the job due to my circumstances.

That's the most hours I can get from a job right now, because the market for full-time work in anything I can actually do (i.e. intellectual-based work rather than cleaning or cooking). In point of fact, there are 1.5 million more people on benefits (including the incapacity brigade) than there are job vacancies for them to fill. This is part of the reason for the increase in part-time jobs and the decline of full-time ones.

I'm marginally into negative wages in the literal sense. I am one of those people paying to work. Lucky I have no housing expenses and few food expenses yet.
It also helps that I see working at this wage as an investment for the day when I can actually earn money doing something I'm good at, rather than being a drain on the state all my life.

It's fewer hours than I worked under JSA, I'll admit - it took 6 hours for me to do the average application form (and thus 18 hours to do JSA requirements in some weeks), even after I finally got training in how to do it through a disability-related substitute for New Deal (I was rejected for the standard New Deal on the grounds that doing the 10 activities per week would put me into a Working-Time-Directive-busting 60-hour week). In the early days, applications took two whole days including evenings and I struggled even to meet the minimum criteria in the fortnight given.

Still, I had naively assumed that getting a job would actually earn me money instead of losing it. No wonder there's so little motivation on the part of job-hunters to get out of benefits - it pays them to stay put, if they can tolerate the workload caused by being on JSA.

Mark Wadsworth

@ Dsquared

1. Easing the 'better off poor' our of social housing is part of the plan! That keeps the waiting lists down! It is far, far cheaper to house somebody in social housing than in private rented, so even if average wages of social tenants go down (unlikely, as under CBI the marginal withdrawal rate is far lower so they are more likely to work) the overall deal is cost neutral.

2. There is no pinchpoint (part 94):

On workfare job you get £100* workfare wage tax free plus £58 CI = £158 before housing costs.

If you find a 29 hours a week job paying £5.52, your net income before housing costs is £165, i.e. £58 CBI plus 29 x £5.52 x 67%. So you are £7 better off in this example.

* BTW, the £100 is not an absolute figure, what this means in reality is that 'If you want the council to pay your rent and council tax you have to do a Workfare Job', that might in some cases be more than and in some cases less than £100.

dsquared

What happens to the £17.90 of council tax? Do you still get it paid for you if you're working 29hrs and not doing your workfare job - if so, what's the withdrawal rate of this benefit, and if not then you're £10.90 worse off.

And you seem to have a "magic asterisk" there which is how you've got rid of the pinch point - private sector rent in the tax tables is £120/wk and council tax is £17.90, so this benefit needs to be £137.90 if it's actually going to pay the bill.

dsquared

Just to make that clearer, the situation under Mark's asterisk (the council pays your bills and ctax if you're on workfare) is the one that needs to be considered, not the one in the calculation (the council pays you £100), because £100 isn't enough to cover rent and tax.

In this case, on workfare your man gets £58 CBI, plus rent of £120 paid and council tax of £17.90 paid, giving him pre housing cost income of £195.90 and post housing cost income of £58 (ie the CBI)

On 29 hours @5.52, he gets £107.25 income from labour and £58 CBI, giving him pre housing cost income of £165.25. Even if you keep the council tax benefit that's a pretty nasty pinch.

By the way, how does this work for households? I know that one of the CBI principles is that it should deal with individuals rather than households, but people do live in households and we did start off talking about a two-person, no kids unit.

Assuming that the rent benefit gets split in two would leave the household on workfare with £116 of CBI and £137.90 of housing benefit workfare replacement (or would it? presumably if there's two people doing the workfare job they ought to get more than if there was only one? But then isn't this a pretty significant departure from the CBI principle?) for total pre housing cost income of £253.90, and the household with one working member a bit better off: £107.25 from work, £116 of CBI and £68.95 of HBWR for total PHCI of £292.20. That makes things better than they were for the single guy, but it's still a withdrawal rate of 76% (earned income of £160 increases total income by £38) or a take-home net "Dillow wage" of £1.32/hr.

Neil

Damn you with your 'numbers' and 'facts', Davies!

Mark Wadsworth

@ Dsquared. It would be up to each local council to decide what is a reasonable rent (inclusive of C Tax bill!!); what the Workfare jobs pay; and how many hours they work.

If you want to live somewhere that costs £120 a week with a £18 C Tax bill, then fine, maybe the Council will make you do a 40 hour a week workfare job for £138. I am sure that in 90% of the UK a single adult can find somewhere to rent for considerably less than £120 a week. (My family rents a very large house in a very nice area in Outer London for £400 a week with a £48 C Tax bill)

The council might also say "Hey, some of the better off poor have moved out of social housing, so here's your council flat", and save themselves £140 a week.

Of course it's not a perfect system, but it's got to be better than what we've got. If you have an idea on how to improve it on a fiscally neutral basis, then I am happy to consider your ideas!

dsquared

Mark, I didn't pull £120.90 out of the air - it's the number in the tax tables, which is why I don't agree that the country is full of private rented accomodation for less than £100 (I did screw up by not including the single occupant council tax adjustment though).

[If you want to live somewhere that costs £120 a week with a £18 C Tax bill, then fine, maybe the Council will make you do a 40 hour a week workfare job for £138]

this is definitely going to create pinch points though, to say the least; how do you transition someone from this to 16 hours at minimum wage?

My point is that I don't think there is a way of squaring this circle on a fiscally neutral basis - in many ways I admire the Herculean efforts of the Citizen's Income people, but it can't be done without a big (and in my view politically impossible) tax increase, and I therefore rather suspect that it's a cover for a cut in the benefits system.

Mark Wadsworth

@ Dsquared. I replied to that but my comment seems to have disappeared.

Long story short, AFAIAC, C Tax benefit and H Benenfit are the same thing and all count as 'rent'.

I envisage, each local council decides what a reasonable 'rent' is and adjusts the pay and number of hours worked for a Workfare job to suit local circumstances.

£120 rent for a single adult seems very much on the high side to me for 90% of the UK.

And with the 'better off poor' being eased out of social housing, private tenants will move into social housing and the problem sorts itself out.

Mark Wadsworth

Oops.

A CI does not require a large total increase in welfare spending or taxation!!! Or else I would not be recommending it.

I think (pls confirm) that you are broadly happy with the proposals for cash benefits and social rents?

Then our only sticking point here is H Benefit/C Tax Benefit for private tenants. If you grind the figures, the total cost of this is about £5 billion or something (1 million claimants x £100 pw x 52 weeks), out of a total welfare bill of £70-plus billion (excluding pensions!).

So whether the cost of this goes up or down a bit (and I can't claim to know the answer) is irrelevant in an economy where the gummint wastes £100 billion a year on quangoes.

Mark Wadsworth

Furthermore, the Minimum Wage is an arbitrary figure. If we had some sort of Workfare system to cover a reasonable rent, then people wouldn't take on jobs in private sector unless they paid more, so private sector wages would adjust up or down to suit local circumstances.

So we wouldn't need an explicit official NMW either, yet again, market forces ride to the rescue!

And how is it a 'pinch point' if somebody goes from doing a 40 hour workfare job to doing a 16 hour NMW job and ends up worse off? Of course he's worse off! He's just cut his working hours by 60%!!!

Will

I've previously been a supporter of CI, but all this talk of "workfare" is starting to make it look like I've been sold a pup. What happened to the administration savings we were supposed to get from simplifying the system? Those jobsearch supervisors, programme coordinators and patronising b-sorry, mentors- don't come cheap, and all they do is maintain the punitive attitude to the poor we're supposed to be trying to get away from.

The idea of universal CI should be that even the most meagre part-time job becomes a viable bonus for anyone who feels like doing it, rather than a sentence handed down by some gauleiter with a sanctions target to meet. So sack the snoopers, set CI at a level that INCLUDES average rent per person (rather than the absurd £58 a week discussed, which is actually lower than JSA!) and let people supplement it as they will.

Theres's probably a case for some kind of transitional relief scheme for those who'd lose out by moving to CI from the current benefits regime in one fell swoop; but since the benefits they're currently on are subject to discretionary sanction already, it shouldn't take more than a year or two to make the switch - and the savings from more relaxed claim-monitoring will be seen long before that process is complete.

dsquared

[1 million claimants x £100 pw x 52 weeks]

ONS seems to have total 4m claimants, of which 2.4m are non-LA tenants, at an average of £77.30 per claimant headcount, so you're out by a factor of 2 here. Your figure of £100bn for "money wasted on quangos" is from a very dodgy Taxpayers' Alliance study that, IIRC, includes every Job Centre in the country, the BBC and the Royal Mail.

[I think (pls confirm) that you are broadly happy with the proposals for cash benefits and social rents?]

definitely not. I am broadly happy with the cash benefits because they constitute a large and progressive redistribution through the tax system (which I don't think would be remotely politically possible) and completely unhappy with the social rents plan.

dsquared

(and as an addendum, I'm only happy with the cash benefits plan if you ignore the housing benefit implications, which I don't think is reasonable to do).

Will

I've previously been a supporter of CI, but all this talk of "workfare" is starting to make it look like I've been sold a pup. What happened to the administration savings we were supposed to get from simplifying the system? Those jobsearch supervisors, programme coordinators and patronising b-sorry, mentors- don't come cheap, and all they do is maintain the punitive attitude to the poor we're supposed to be trying to get away from.

The idea of universal CI should be that even the most meagre part-time job becomes a viable bonus for anyone who feels like doing it, rather than a sentence handed down by some gauleiter with a sanctions target to meet. So sack the snoopers, set CI at a level that INCLUDES average rent per person (rather than the absurd £58 a week discussed, which is actually lower than JSA!) and let people supplement it as they will.

Theres's probably a case for some kind of transitional relief scheme for those who'd lose out by moving to CI from the current benefits regime in one fell swoop; but since the benefits they're currently on are subject to discretionary sanction already, it shouldn't take more than a year or two to make the switch - and the savings from more relaxed claim-monitoring will be seen long before that process is complete.

Mark Wadsworth

@ Will, I said £58 because the CI booklet we were discussing is based on 2006-07 rates. At the time it was of course equivalent to JSA rate, so this year we'd propose £60 or £61 or whatever it is.

If you want the CI to be high enough to cover basic housing costs, you'd have to double the rate, which would mean a significant increase in the total cost.

But most people don't need help with housing costs. So I split up the problem a bit, with one suggestion for social tenants and another for private tenants. The workfare idea only applies to private tenants who don't have a job. Maybe there's a better idea but I haven't heard it yet.

The idea of universal CI should be that even the most meagre part-time job becomes a viable bonus for anyone who feels like doing it

Agreed on that last bit.

Mark Wadsworth

@ Dsquared. What's wrong with the social rents plan? Social tenants would just pay a flat 20% of their income in rent (incl. council tax), which gets marginal deduction rate down to 53%.

Do you have a better plan? If so tell me, I am in the market for bright ideas.

I have looked up the figure for HB claimants in privately rented accommodation and it is in fact rather LESS than 1 million, see page 9 of this

http://www.dwp.gov.uk/asd/asd1/stats_summary/Stats_Summary_may_2008.pdf

I suspect the discrepancy the DWP figure and the ONS figure that you quote is because Housing Associations are sometimes classified as 'private landlords' and sometimes as 'social landlords'. AFAIAC, they are social landlords, which is what the DWP assume.

And the £100 billion waste is not far off the mark. There were far too many public sector workers back in 1997 (6 million) and there are now 8 million (if you included parastatals and quangoes etc). So there are two or three million people with handsome pensions on the taxpayer payroll doing sweet bugger all. Except hounding benefit claimants, for example.

That's 8 million using ILO definition BTW, not strict legal definition which excludes GPs and university lecturers.

Will

Mark,

fair catch on the 2006 benefit rates. But yeah, I do think that a basic income scheme that doesn't cover basic housing costs is missing the mark in a pretty obvious way. If that means the sums need redone, well that's too bad; but one of the goals here is to simplify the system, so why reintroduce complexity with differential schemes depending on whose house claimants live in? Pay the same amount to everyone and let them use it as they see fit.

Mark Wadsworth

@ Will

I can see the appeal of doubling or trebling the CI rate so that it would also cover housing costs, but this would be prohibitively expensive.

Hence my own three pronged solution.
1. Homeowners get nothing.
2. Social tenants pay a basic rent of £nil plus 20% of their income.
3. Private tenants out of work take a Workfare job which will cover rent plus C Tax for basic accommodation.

This three-pronged solution keeps within existing expenditure constraints. To call for the cost of welfare state to be doubled or trebled is a totally political thing and the CI are politically neutral as far as possible.

I am sure they'd happily call for welfare spending to go up by 10% or so if that were really necessary, but not doubled or trebled.

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