Citizens income, why it is necessary and how it could be financed

 

In 2010 we had David Cameron's big society, today we have Boris Johnsons levelling up. What we have never really had is a solution to the problem of poverty that has any more substance to it than a sound bite. Our Benefits system is designed to be as difficult to use as possible, forcing the unemployed and disabled into low wage jobs. Things are now so bad that I keep expecting a statement from Priti Patel announcing the return of the workhouse. 

Philip Alston, the United Nations Special Rapporteur on extreme poverty and human rights, in his final report for the United Nations has said that Poverty is a Political Choice. That is certainly true in a country as wealthy as ours. There seems to be no shortage of money. The Bank of England has "printed" £1trillion over the last year in a quantitative easing (QE) stimulus package. Where the problem lies is in the distribution and entitlement to all the wealth. 

What real solutions are there available to us to end the poverty trap that so many find themselves in today? 

We propose as one of the cornerstones of our progressive policies a Citizens Income. This would be paid to all UK citizens regardless of their employment status putting an end to the benefits system, state pensions, family allowance, sickness benefits and food banks. Children's legal guardians would receive the child’s CI on their behalf up until the age of 16. All real poverty in society would finally be alleviated.

This would end unemployment as it is perceived today and retirement could be at the discretion of the individual. CI itself will not be taxed and all income over and above CI being taxed at the same flat rate. 

Having CI enables everyone to live at a basic level without the worry of becoming destitute through a lack of funds. The financial stability that CI brings would take the unnecessary stress out of everyday living, helping both families and individuals to fulfil their lives more productively. An augmented Citizen's Income (ACI) would be paid to those with disabilities. It will not be means-tested. Also, in recognition of their long years of service, a Seniority Supplement for all voters over the age of sixty-five will also be made. 

 CI is basically a dividend, as we are all shareholders in UK PLC. 

All well and good except that the amount of money this would cost is astronomical. So how could it be financed?

If CI was £10,000 a year for each adult and £5,000 for each child the cost of CI would equal that of the total annual tax revenue that the government currency receives. 

The Green party has a similar policy in their manifest that they would fund with a Carbon Tax. They do not however give an estimate as to how much extra revenue a Carbon Tax would bring. Whatever the amount such a tax would raise it could never be enough to finance a Citizens Income for all. So an alternative way of funding CI needs to be found other than creating a new tax or expecting general taxation on its own to be sufficient. 

 What is money and where does it come from?

We come here to an interesting question, what actually is money and where does it come from? If you do not already know you may be surprised by the answer. Only about 3% of money currently in circulation comes from the Bank of England. These are the coins and notes that we use that are made by the royal mint. The rest comes from debt and is made electronically by the banks when we borrow from them. 

If you use your bank overdraft or credit card, take out a personal loan or mortgage the credit that your bank extends to you is all new money. When Theresa May told the nurses that there was no magic money tree she was not being truthful. In fact, all our money comes from the magic tree, i.e. it comes out of nowhere. When we pay it back into our account the money that we have borrowed just disappears again. All that is left is the interest that our bank charges us. 

 A drawback with this system is that the Central Bank and the Government have little control over the money in the economy. So when things occasionally go wrong it can be costly to rectify the problem. 

The last economic crash is an example of this. Mostly caused by deregulation because past governments had decided that growth was more important than stability. George Osbourn when he became the Chancellor of the Exchequer decided to pay back the government borrowing that resulted from the bailout with an austerity program of reduced spending. Coupled with a tax cut for the rich to help stimulate growth. This was totally wrong thinking, the more governments spend the greater their income because it is their spending that stimulates economic growth. Therefore the bailout in the end cost us more than was necessary.  

QE has been used in the past to put money into the economy when the banks have stopped lending. The problem with QE is that it puts money into the markets when in fact it is most needed at the lower end of the economic spectrum. Another idea for solving this kind of liquidity trap is called a helicopter drop. Putting a lot of cash into the economy by Central Banks making payments directly to individuals. This has so far never been tried and is, like QE, a quick fix as opposed to a long term strategy for maintaining a stable economy. 

Direct monetary financing.

The Governments overdraft facility with the bank of England is a form of direct monetary financing. Instead of financing the Government indirectly with QE the Bank of England is now financing them directly. This has given them unlimited funds to fight Covid. But so far they have made no new Fiscal Policy that takes into account the possible ramifications of having unlimited credit. 

 A new idea that is being looked at by the worlds governments and central banks is Central bank digital currency (CBDC). We are all aware of Bitcoin and other digital currencies. The difference between those and a CBDC is that a digital currency made by a central bank would be guaranteed by them. So £50 in your central bank digital account would always be worth the same as a £50 note in your wallet. 

Everyone having a CBDC account would give the Bank of England the ability to helicopter drop money directly into the economy if liquidity had become a problem and the economy was stagnating.  

CBDC accounts however could alternatively be used as a way of paying CI to all citizens. Without undermining the role that the banks play in generating credit and being a safe place for savings and for making bill payments. 

 What are the dangers?

Putting too much new money into the economy can devalue the pound and cause inflation. This is where taxation comes in. Taxation is the most efficient way of removing surplus cash from the economy. Setting tax rates at the right level as well as interest rates can keep the currency stabilised. With the added ability to put more money in should it be needed. Giving far more control over the economy than is currently possible. 

Five small countries already have a CBDC. St. Kitts and Nevis, Antigua and Barbuda, St. Lucia, Grenada and the Bahama’s. We should not expect it to be long before larger economies such as ours do the same thing. Why not use this opportunity to create a Citizens Income for all and end poverty for good. 

 Philip Notley

progressiveeuropeanparty@gmail.com

Could Brexit have been a success?

The simple answer is yes. Provided we had stayed in the single market and had a customs union with the European Union it would have. The so-called Norway plus option. Norway is in the single market but they do not have a customs union with the EU. The EU’s customs union is for members only, but we can negotiate our own customs union with the EU.

This would make us rule takers but not rule makers as Farage once put it. But that is unavoidable, every country bordering the EU comes under their sphere of influence, even one as big as Russia.

The leave voters would, of course, cry foul at such an option, we need however to remember that many people who should have been entitled to vote were excluded. If that had not been the case we can be sure that the vote would have been a 50/50 split for leaving or staying.

If we had stayed in the single market I for one would have accepted the result and not become a political campaigner. We were told that leaving the single market was not going to be on the cards by more than one of the leave campaigners. Things went wrong because of Theresa May's “red lines” which were then taken to their logical conclusion by our present Government.

Ending freedom of movement was one of the main aims of many leave voters. With only half the electorate voting for leave, they should have accepted a compromise. We all know what happened, the extremists kept putting pressure on the Government until they became the Government and since then chaos has ensued. They are so desperate to have total independence from the EU that many babies have been thrown out with the bathwater. Trade deals, cooperation in science, human rights, you name it we have or are in the process of losing it. The possibility of our being a successful nation outside of the EU has been trashed. All for the sake of an unrealistic unworkable xenophobic political doctrine.

The country is now experiencing an unprecedented decline that will have long term consequences for generations to come. And we have nowhere reached rock bottom yet. After only nine months of Brexit, everything is falling apart. They can not even implement the full customs checks at the UK/EU border because we will run out of food if they do and shortages are beginning to become a problem even without them. Because of this EU imports have gone up while our exports to the EU where the full customs requirements are being made have gone down.

This hardly helps our balance of payments, we are becoming a bankrupted isolationist country full of miserable destitute people living below the poverty line. When we could have had independence without losing everything the EU had to offer.

Can our decline be reversed?

If we rejoin the single market and negotiate a customs union it can. We will probably not make up the lost ground for a long time to come but our decline can be stopped by doing this. For the longer term, I would identify the problem as being that we do not have a constitution. Our system relies on our elected leaders having some integrity. That was always taken for granted by past generations but it has now been taken advantage of by unscrupulous power-grabbing charlatans.

Where this will all end is unknown and unknowable. For sure things will continue to go downhill for the time being. In the end, however, the people will rise up either on the streets or at the ballot box, or both. Things will change but we are still in for a bumpy ride for the foreseeable future.

Philip Notley

progressiveeuropeanparty@gmail.com

Labour and Tony Blair

If we are going to have the slightest hope of returning the country once again into a viable democracy then the Labour Party has to win the next general election. 

I am no fan of Labour, however, with a two-party system, they are our only hope. Their present leader, Keir Stamer, has as much charisma as a damp flannel and stands no chance of winning against Johnson. The light may still be visible at the end of the tunnel if Labour accepts its predicament and goes for a new leader. 

Anyone — and I mean anyone — is better than the conservatives

It always looked unlikely to happen and not worth giving any credence to the rumours that have sprung up over the years, but this time it is actually happening. Tony Blair is coming back into politics and he wants to be the Labour leader again.

No matter what any of us may feel about him, he certainly has history. And no matter how difficult it may be for him to achieve it. If Blair does become Labour leader again we must vote for him. And quite possibly temporarily abandon our own political affiliations and campaign for him as well. 

It is the only hope we have of escaping the new dark age that is slowly enveloping our lives our country and our futures.

Happy Europe Day

 

Transport in the future

  Progressive European Party

I spend most of my political time on Twitter @Prog_Party, unfortunately I get into a lot of rows and it is mostly with other rejoiners. One recent set too was in response to a comment I made on a Tweet from Andrew Adonis @Andrew_Adonis. Andrew said that the high-speed train needed to go to Scotland soon. I said it would be out of date before it was up and running. That set them off, I of course don’t know what I am talking about and it would take so many people in just a few hours how could it get out of date. 

 

What is not being taken into consideration with regards to travel time is that passengers do not live at railway stations. Passenger's all have different points of departure and different destinations to get to. They could be coming from Wales or Cornwall and travelling to Dumfries or Inverness. The time saved by a high speed train from London to Edinburgh is only a small part of the journey time if you have far to travel. What works better is transport that can take a passenger from door to door. 

That transport is of course the car. With the coming of electric engines, this form of transport will no longer be a major contributor to air pollution. The most significant change for public transport will come from self-driving cars, the autonomous vehicles of science fiction have become a reality. Some semi automated cars that can change lanes and park themselves are already on the market and completely driverless cars are on our streets in the development stage.

 

As soon as this evolution in transport moves to its next level of development, which is the fully autonomous taxi, public transport can be totally transformed. Robotaxis are already operating in China and with 6G, which is expected to be rolled out in 2030, the transport revolution can be completed.

 

When low cost Robotaxis are available countrywide it will no longer be necessary to own a car. Private cars spend most of their life immobile, but still costing their owner money. Why put up with all the expense of private ownership when you can call a cab from an app on your phone that will drop you anywhere you need to go. 

 

The driverless cars of today still have a sterling wheel and all the controls and a driver just in case. Much as the computer controlled trains that run on some Metro systems still have a driver in the cab, just in case. Very soon this will no longer be necessary as the technology progresses at a fast pace and will be proved to be safe and reliable.

 

This will transform our world, not just because we can get in a taxi, give it the address and sit back and relax as it takes us there. The car itself will no longer need controls in the cab or a windscreen allowing interiors to be completely redesigned. A table and chairs, a bed, a drinks cabinet, a tv. Anything you like that fits into the space and makes life more comfortable.

Motorways can be restricted for the use of autonomous vehicles only making the completion of long journeys far faster. Imagine Robotaxis all moving at the same speed all at the same distance apart, always in the right lane and moving at the correct speed for the road conditions. There will be no need for motorway lighting, no reason to slow down because of fog and no speed limits as they will always be moving at the highest safe speed. 

 

A criticism could be that taxies are expensive compared to public transport, not everyone will be able to afford them. This would not prove to be the case with Robotaxis as most of the cost of a taxi fare pays the wages of the driver and the staff who take your booking. These jobs will go, making a Robotaxi far cheaper than a current taxi. Local authorities subsidise bus routes, on many of these bus journeys the bus is less than half full and it runs on some arbitrary time table. Far better to subsidise the Robotaxi service. The OAP bus pass can become a Robotaxi pass, pensioners will clearly benefit from a service that is available day and night and can take them from door to door. 

 

There are other benefits over conventional transport. The huge amount of space that is taken up by shopping centre car parks will become unnecessary. Drop off and pick up points and loading bays will be all that is required. Side streets will no longer be full of parked cars as the total number of cars will be reduced. Buses can be assigned to the history books and the extraordinarily high costs of HS2, Birmingham to Edinburgh £100bn+, can be forgone. 

 

What does Government need to do to implement this transport revolution? Very little is the answer. Private companies are funding the research and development of autonomous vehicles. What Central Government could do is make sure G6 is rolled out on time and stop spending billions of pounds on prestigious high speed rail projects. Projects that can only ever benefit a small number of citizens compared to autonomous vehicles which will benefit everyone. It is far better to put the investment into maintaining and developing our existing road and rail networks and embracing the new technology as soon as it arrives. 

 

Philip Notley 

progressiveeuropeanparty@gmail.com

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The housing crisis for first time buyers

    Progressive European Party

In response to a tweet by Tom Harwood

Tom Harwood

@tomhfh

The only people around my age I know who have been able to buy a house are those who have not had to pay rent. Stuck forking out a third to half your income on rent? You're stuffed. No other generation had to put up with this.

The Progressive Party has a solution for the housing crisis that would provide more properties for first time buyers and end the council waiting lists without costing taxpayers any money. I will cut and paste our housing policy below.

The problems come about because banks don’t lend money for mortgages from their cash reserves. They generate the money electronically. This creates a lot of free money and therefore artificially inflates house prices. 

Building developers are mostly interested in building three bedroom houses because that is where most of their profits lie. Whereas the trend in society is for more people living on their own. What is needed are more one bedroom and studio flats which would also help first time buyers get on the housing ladder. 

Local authorities have been restricted by the government in how much new housing they can build. And when people are paying rent their landlord most probably has a mortgage on the property themselves so they have to charge rent higher than the costs in order to make a profit. Add all these things together and you have the perfect storm for high rents and house prices. 

The Progressive European Party 

New Housing Initiatives

One of the most pressing issues of our time is the inadequate provision of social housing. It is an area of policy that has been neglected by successive governments for many decades.

The results of this neglect are all too obvious in both urban and rural areas. The demand for housing far outstrips the supply and secure, adequate and affordable housing is now a distant dream for the majority of families and individuals.

The Progressive European Party intends to address this problem from its very roots.

Central government does not, at present, allow local government to borrow against the value of their housing stock in order to raise the finance necessary to build new housing. In addition local government is not allowed to use the money it generates from the right to buy scheme to build new housing. If such borrowing and relocation of funds were to be allowed, new social housing could be built at no cost to the taxpayer. If, furthermore, 50% per cent of these new builds were sold on the private market, the revenue from these sales could be put towards the cost of each project. Such a scheme would work perfectly in predominantly urban areas. In such cases the high building costs would be offset by high house prices. Thus the revenues from properties sold would be more than enough to cover the costs of the entire project. In other words, each well-managed project would provide new social housing completely free of cost. In some areas of the country, the whole cost of building might not be fully recoverable from private sales. In such instances, however, it would still be possible to build social housing at approximately half the cost of solely social estates. The savings generated would thus be enormous. The effect of this would be that the chronic housing shortages in the private sector would at last be alleviated. Social housing would at last be available to all who need it.

The total cost of building could not be expected to be reimbursed from the sales in every part of the UK. Nevertheless, each project would still ultimately cost nothing. For any remaining unsold properties would be rented. This rental revenue would easily cover interest payments on any outstanding loans. These housing initiatives will also provide an opportunity to upgrade building regulations to require high standards of safe, fire-proof insulation for all new builds. Catastrophes of the type typified by the Grenfell Tower disaster would be averted and winter heating costs would simultaneously be minimised. New flats, for instance, would have only one outside wall. Thus insulation cost per unit would not be significantly greater. New building regulations would also make solar panels and, where appropriate, mounted wind-turbines mandatory. The electricity generated could either be used directly for heating or, at times of surplus, be sold into the National Grid. Technologies such as storage radiators and efficient insulation would provide efficient and cheap or cost-free heating. Fuel poverty for occupants would become a thing of the past. Providing suitable housing for all would save local authorities millions of pounds. Currently local authorities spend large sums on bed and breakfast accommodation for the homeless. By the same token, at present, when a family becomes homeless, children have to be taken into care. This is inordinately expensive. Central government, moreover, currently spends £25 billion on the UK's housing benefit bill. To sum up, the need for local authorities to build low-cost, inferior housing would be obviated. Because about half of new homes would be sold on the open market they would need to be of a high standard to attract buyers. Finally, therefore, the plight of first time buyers and council waiting lists would, in due course, be ended. Good quality homes would be available for everyone at no cost to the taxpayer.