Progressive European PartyCitizens Income or CI (sometimes also called a Universal Basic Income or UBI), has been one of the cornerstones of Progressive policy since the late 1990s. The main question that always arises in connection with CI is: How can it possibly be financed?
The introduction of CI would, in fact, generate major savings. In the first place, it would render nearly all other benefit payments obsolete and unnecessary.
Housing benefit alone, for instance, cost the UK £24 billion in 2014/15.
CI, therefore, can be set at a level that covers all reasonable rents.
The inefficient, costly and wasteful bureaucracy that has evolved to maintain the present complicated benefits system can likewise be almost completely dismantled.
Additional monies can be saved by discontinuing tax subsidies that are currently given to businesses and to the wealthy.
Payment of straightforward flat rates of taxation by businesses and by individuals, coupled with savings resulting from the simplification of the benefits system, will yield greatly increased sums available for more pressing social needs. This radical shift in priorities will enable a Progressive administration to give every person in the UK over the age of sixteen an annual Citizens’ Income of £10,000 while all children up to the age of fifteen (or their legal guardians) will receive £5000.
No tax subsidies are proposed by The Progressive European Party in our reform of the taxation system. Instead, all tax will be paid under the streamlined tax mechanisms outlined above. By these means, the payment of CI out of general taxation becomes perfectly feasible.
The high rents charged in today’s economy are a direct result of the acute shortage of housing in the UK. Citizens’ Income, consequently, must be set at a level that is sufficient both to cover accommodation charges and to provide an adequate, if basic, standard of living. It needs, in other words, to be enough for everyone to live on - even when it is their only income.
It is for these reasons that pEp has elaborated a new housing policy to be implemented before CI can be rolled out to all citizens.
Our housing policy is simplicity itself. Local authorities will be allowed to borrow money for the purpose of building new housing. A percentage of these new homes will then be sold to cover the cost of the loans. In this way, approximately 50% of new builds, conversions and refurbishments of existing properties will become available for allocation to all those who are on housing waiting lists. For free.
When I tell people that the Progressive party has a plan to house everyone on the council waiting lists at no cost to the taxpayer, they immediately imagine that I am living in a fantasy world. So I will say it again. We shall be able to house everyone who needs it for free.
It is to be expected that, in some areas, the cost of building new homes will not be fully met by the selling of a percentage of them. Nevertheless, a large proportion of the loan could still be paid off and the local council will simultaneously be gaining an income from the rented properties. In either case, there will be no cost to the taxpayer.
Because we shall be selling homes as well as renting them, this scheme will also provide housing for people who are in a position to buy their own homes. By these means, all housing shortages, both public and private, will be alleviated in a relatively short time span.
When affordable housing reaches a sufficient level it will become possible for CI to be implemented for all citizens.
Will anyone be worse off?
Inevitably some private landlords will have to reduce their rents in order to compete with the new social housing. Property values may initially stagnate or be reduced by the availability of more homes on the market. It should be remembered, however, that the current high rents and the high cost of housing are artificial products of long-standing shortages. They are an artefact of the markets rather than a true reflection of value.
Poverty and homelessness are a disgrace to our society which should never have been allowed to arise in the first place. The Progressive European Party’s housing policy, together with CI, would eradicate these stains from our social fabric for good.
CI itself does have a downside for another group: the money lenders. Under the new universal credit scheme that is currently being rolled out across the country, there can be a two month delay between joining the scheme and receiving the first payment. This long wait imposes an enormous financial strain on claimants who are already living on the poverty line. Payments are then only received monthly, not weekly. Anyone who has had to live on a low income will tell you that they are obliged to budget from one week to another - and not on a monthly basis. Most people run short of money long before the end of the month. Many citizens who are dependant on the current benefits system are forced to use short-term loans just in order to pay their basic bills. CI, on the other hand, could be paid weekly. Since everyone will receive CI from birth, unfair delays would be avoided.
It may well be asked why a rich person, who has no real need for CI, should be paid the same amount as those who are desperate. CI is for all citizens as a share of the prosperity that our country has built up over the generations. Everyone is entitled to it as a right no matter how rich or poor they may be. CI will not be taxed: whereas earnings over and above CI will be subject to taxation.
Another question about CI is: will it make people lazy and less productive? In fact, the opposite has been found to be true wherever it has been tried. Unemployment is reduced, more new business start-ups are made possible and, rather surprisingly, fewer divorces and family break-ups occur.
People who have the security that financial independence confers are more able to live in a dignified and productive way.
We and our forebears work or have worked in the mines, in the steel mills, on the farms, in the factories, as well as in shops and offices. We and our ancestors have all contributed to the enormous wealth that our country has produced over the centuries. It is only right that we should all now share in that prosperity.
The Progressive European Party’s three reforms of Taxation, Housing and Citizens Income, even though they are separate and distinct policies, work together to create a fairer and more inclusive society in which everyone's worth is properly recognised.
The inefficient, costly and wasteful bureaucracy that has evolved to maintain the present complicated benefits system can likewise be almost completely dismantled.
Additional monies can be saved by discontinuing tax subsidies that are currently given to businesses and to the wealthy.
Payment of straightforward flat rates of taxation by businesses and by individuals, coupled with savings resulting from the simplification of the benefits system, will yield greatly increased sums available for more pressing social needs. This radical shift in priorities will enable a Progressive administration to give every person in the UK over the age of sixteen an annual Citizens’ Income of £10,000 while all children up to the age of fifteen (or their legal guardians) will receive £5000.
No tax subsidies are proposed by The Progressive European Party in our reform of the taxation system. Instead, all tax will be paid under the streamlined tax mechanisms outlined above. By these means, the payment of CI out of general taxation becomes perfectly feasible.
The high rents charged in today’s economy are a direct result of the acute shortage of housing in the UK. Citizens’ Income, consequently, must be set at a level that is sufficient both to cover accommodation charges and to provide an adequate, if basic, standard of living. It needs, in other words, to be enough for everyone to live on - even when it is their only income.
It is for these reasons that pEp has elaborated a new housing policy to be implemented before CI can be rolled out to all citizens.
Our housing policy is simplicity itself. Local authorities will be allowed to borrow money for the purpose of building new housing. A percentage of these new homes will then be sold to cover the cost of the loans. In this way, approximately 50% of new builds, conversions and refurbishments of existing properties will become available for allocation to all those who are on housing waiting lists. For free.
When I tell people that the Progressive party has a plan to house everyone on the council waiting lists at no cost to the taxpayer, they immediately imagine that I am living in a fantasy world. So I will say it again. We shall be able to house everyone who needs it for free.
It is to be expected that, in some areas, the cost of building new homes will not be fully met by the selling of a percentage of them. Nevertheless, a large proportion of the loan could still be paid off and the local council will simultaneously be gaining an income from the rented properties. In either case, there will be no cost to the taxpayer.
Because we shall be selling homes as well as renting them, this scheme will also provide housing for people who are in a position to buy their own homes. By these means, all housing shortages, both public and private, will be alleviated in a relatively short time span.
When affordable housing reaches a sufficient level it will become possible for CI to be implemented for all citizens.
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Will anyone be worse off?
Inevitably some private landlords will have to reduce their rents in order to compete with the new social housing. Property values may initially stagnate or be reduced by the availability of more homes on the market. It should be remembered, however, that the current high rents and the high cost of housing are artificial products of long-standing shortages. They are an artefact of the markets rather than a true reflection of value.
Poverty and homelessness are a disgrace to our society which should never have been allowed to arise in the first place. The Progressive European Party’s housing policy, together with CI, would eradicate these stains from our social fabric for good.
CI itself does have a downside for another group: the money lenders. Under the new universal credit scheme that is currently being rolled out across the country, there can be a two month delay between joining the scheme and receiving the first payment. This long wait imposes an enormous financial strain on claimants who are already living on the poverty line. Payments are then only received monthly, not weekly. Anyone who has had to live on a low income will tell you that they are obliged to budget from one week to another - and not on a monthly basis. Most people run short of money long before the end of the month. Many citizens who are dependant on the current benefits system are forced to use short-term loans just in order to pay their basic bills. CI, on the other hand, could be paid weekly. Since everyone will receive CI from birth, unfair delays would be avoided.
It may well be asked why a rich person, who has no real need for CI, should be paid the same amount as those who are desperate. CI is for all citizens as a share of the prosperity that our country has built up over the generations. Everyone is entitled to it as a right no matter how rich or poor they may be. CI will not be taxed: whereas earnings over and above CI will be subject to taxation.
Another question about CI is: will it make people lazy and less productive? In fact, the opposite has been found to be true wherever it has been tried. Unemployment is reduced, more new business start-ups are made possible and, rather surprisingly, fewer divorces and family break-ups occur.
People who have the security that financial independence confers are more able to live in a dignified and productive way.
We and our forebears work or have worked in the mines, in the steel mills, on the farms, in the factories, as well as in shops and offices. We and our ancestors have all contributed to the enormous wealth that our country has produced over the centuries. It is only right that we should all now share in that prosperity.
The Progressive European Party’s three reforms of Taxation, Housing and Citizens Income, even though they are separate and distinct policies, work together to create a fairer and more inclusive society in which everyone's worth is properly recognised.
Philip Notley
progressiveeuropeanparty@gmail.com
Additional material
John Coats
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