Citizen’s Basic Income: A Christian social policy

Birmingham

12th September 2017

Dr. Malcolm Torry, Director, Citizen’s Basic Income Trust, and

Visiting Senior Fellow, London School of Economics

What is a Citizen’s Basic Income?

A Citizen’s Basic Income is an unconditional, automatic and nonwithdrawable payment to each individual as a right of citizenship.

(A Citizen’s Basic Income is sometimes called a Basic Income (BI), a Citizen’s Income, or a Universal Basic Income)

Notice the mistake?

Each chapter’s structure

• A title that represents a Christian doctrine or theme• A biblical text where the doctrine or theme is found• Commentary on the text, and on other passages

where the doctrine or theme is found• An explanation of the way in which the UK’s largely

means-tested benefits system fails to reflect the Christian doctrine or theme

• An explanation of the way in which Citizen’s Basic Income does reflect the Christian doctrine or theme

(not necessarily in that order)

An example: Citizen’s Basic Income would be an act of grace

• ‘And the Word became flesh and lived among us, and we have seen his glory, the glory as of a father’s only son, full of grace and truth. … From his fullness we have all received, grace upon grace.’ (John 1:14-16)

• At the heart of the Christian Faith is the grace of God: a nonwithdrawable love, an unconditional generosity. We do not earn God’s love: it is simply a gift.

• ‘The sabbath was made for humankind, and not humankind for the Sabbath.’ (Mark 2:27)

An example: Citizen’s Basic Income would be an act of grace (continued)

•For a Christian, the primary reason for pursuing the Citizen’s Basic Income debate has to be that it reflects the heart of the Christian Faith. The unconditionality at the heart of the Christian Gospel finds an echo in the unconditionality at the heart of Citizen’s Basic Income. It finds no echo in conditional benefits.•But that isn’t the end of the story, because a gift

can inspire a gift in response. Thus Jesus’ words in Matthew’s Gospel offer an invitation:• ‘You received without payment; give without

payment.’ (Matthew 10:8)

Chapter headings

•Citizen’s Basic Income would celebrate God-given abundance•Citizen’s Basic Income would be an act of grace•Citizen’s Basic Income would recognise our

individuality•Citizen’s Basic Income would recognise God’s equal

treatment of us•Citizen’s Basic Income would provide for the poor•Citizen’s Basic Income would not judge

Chapter headings (continued)

•Citizen’s Basic Income would constantly forgive•Citizen’s Basic Income would ensure that workers

would be paid for their work•Citizen’s Basic Income would be the basis of a

covenant•Citizen’s Basic Income would inspire us to be co-

creators•Citizen’s Basic Income would understand both our

original righteousness and our original corruption•Citizen’s Basic Income would recognise our mutual

dependency

Chapter headings (continued)

•Citizen’s Basic Income would facilitate a more just society•Citizen’s Basic Income would promote liberty•Citizen’s Basic Income would both relativise and

enhance the family•Citizen’s Basic Income would facilitate the duty to

serve•Citizen’s Basic Income would be welcoming and

hospitable•Paying for Citizen’s Basic Income•Citizen’s Basic Income would be an act of love

How would we pay for it?

By turning personal tax allowances into cash payments (so that all or most of earned income would then be taxed)and by reducing means-tested and other benefits

If a higher Citizen’s Basic Income were to be required then we could employ some of the other taxes that we have discussed

How would a Citizen’s Basic Income affect an individual?

A Citizen’s Basic Income would not be withdrawn as earnings rose, so net income would rise faster, and there would be more incentive to seek employment, to create self-employment, and to increase earnings.

The Citizen’s Basic Income would never be reduced, so it would provide a solid floor of economic security on which everyone could build, and therefore greater freedom to pursue a variety of paid and unpaid activities.

How would a Citizen’s Basic Income affect a family?

Cohabitation, civil partnership and marriage would be neither subsidised nor penalised. Each individual would receive their own Citizen’s Basic Income, so there would be more incentive to form and maintain relationships.

Members of a family would be free to work out together the employment pattern they wanted, without their choices affecting their Citizen’s Basic Incomes.

How would a Citizen’s Basic Income affect our society?

Everyone would receive a Citizen’s Basic Income, creating social cohesion.

The labour market could become more flexible without damaging workers’ economic security.

An illustrative Citizen’s Basic Income scheme

Citizen’s Pension per week (existing state pensions remain in payment)

£40

Working age adult Citizen’s Basic Income per week

£61

Young adult Citizen’s Basic Income per week

£50

(Child Benefit is increased by £20 per week) (£20)

Feasibilities• financial (Would it be possible to finance a Citizen's

Basic Income? Would implementation impose substantial financial losses on any households or individuals?)•psychological (Is the idea readily understood, and

understood to be beneficial?)•behavioural (Would a Citizen’s Basic Income have

the promised effects?)•administrative (Would it be possible to administer a

Citizen’s Basic Income? Would it be possible to manage the transition?)•political (Would the idea cohere with existing

political ideologies?)•policy process (Would the policy process be able to

process the idea to implementation?)

Financial feasibility

•A Citizen's Basic Income can be constructed in such a way that it can be paid for by reducing tax allowances and means-tested and other benefits•But that is not the only criterion for financial

feasibility. We have to be able to show that a Citizen’s Basic Income would not impose substantial losses on any household at the point of implementation, and that households with low disposable incomes would not experience any losses

Financial feasibilities of the illustrative scheme

Citizen’s Pension per week (existing state pensions remain in payment)

£40

Working age adult Citizen’s Basic Income per week £61Young adult Citizen’s Basic Income per week £50(Child Benefit is increased by £20 per week) (£20)Income Tax rate increase required for strict revenue neutrality 3 %Income Tax, basic rate (on £0 – 43,000) 23 %Income Tax, higher rate (on £43,000 – 150,000) 43 %Income Tax, top rate (on £150,000 – ) 48 %Proportion of households in the lowest original income quintile experiencing losses of over 10% at the point of implementation

1.6 %

Proportion of households in the lowest original income quintile experiencing losses of over 5% at the point of implementation

2.3 %

Proportion of all households experiencing losses of over 10% at the point of implementation

2.0 %

Proportion of all households experiencing losses of over 5% at the point of implementation

9.3 %

Net cost of scheme £1.96bn p.a.

]

Two implementation methods

1. All at once. On day 1, every legal resident receives a Citizen’s Basic Income and at the same time personal tax allowances are reduced, tax rates are changed, and means-tested and other benefits are recalculated

2. We could turn the new Single Tier State Pension into a Citizen’s Pension, turn Child Benefit into a Child Citizen’s Basic Income, then pay a young person’s Citizen’s Basic Income, and then perhaps a pre-retirement Citizen’s Basic Income, and finally we could fill gap in the middle

Citizen’s Basic Income: A feasible and desirable Christian social policy

A Citizen’s Basic Income is•Christian•desirable•feasible

What could we do to make it happen?

Recent research

EM 12/17

A variety of indicators evaluated for two implementation methods for a Citizen’s Basic Income

Malcolm Torry

May 2017

www.iser.essex.ac.uk/research/publications/working-papers/euromod/em12-17.pdf