What happens to European citizenship?

Decisions have consequences.  Like many others, I’m deeply unhappy with the vote to leave the EU, and have had to think about the implications for myself and my family.  The first and most obvious solution is to seek to be part of a country that does want to be in the European Union.  I did not vote for Scottish independence last time; I will next time.

I have also been looking at the implications of the withdrawal of European citizenship.  Citizenship rights are part of the Charter of Fundamental Rights of the European Union. (The UK did not opt out of the Charter.  The protocols on the UK say that judicial and legislative powers relating to those rights rest with the UK.)

It seems that there is no legal basis to continue to hold European citizenship when the UK leaves – which rather undermines the description of citizenship as a ‘fundamental right’ in the Charter.  (See for example comments by Steve Peers in the seventh question he addresses.)  That does not mean that there is no moral or political argument, or that the process is impossible.   In some other realignments citizens have been given options to retain citizenship on application – many people are currently taking advantage of the arrangements  in Northern Ireland.  The European Parliament has consistently pressed for European citizenship to be treated distinctly from nationality in the member states, and I am considering a petition to the Parliament on that basis.

A few things the EU has done, and a few more it could still do

There doesn’t seem to be much that’s positive in the referendum campaign.  Here are a few things that the EU has made possible for people in Britain.

  • The right to live, work or retire in Europe.  About 2.2 million Britons are doing this at present.  (The estimate is from the IPPR.  Lower figures from the House of Commons library rely on the UK Census – which does not count Britons living abroad – and unhelpfully exclude people who live in other European countries for part of the year.)  Scandalously, many of them have been denied a vote in this referendum.
  • Taking easy, safe holidays in Europe.  About 80% of all UK holidays abroad are taken in the EU.  I’m old enough to remember not being able to go on a planned holiday in Prague because of  visa restrictions.
  • Workers rights.  The EU’s record is patchy, but think about the Working Time Directive – which British governments have constantly griped about – or parental leave.
  • Gender equality.  Perhaps, again, people don’t remember the discriminatory rules for pensions or disability benefits that the EU has made us change, much to the fury of the UK government.  Housewives Non-Contributory Pension, anyone?
  • Consumer protection.  Much of this seems minor now, because we take the protections for granted – covering, for example, goods by post, customs, phone networks,  savings accounts – but there was a time when they weren’t there.
  • Environmental controls.  If, for example, you live somewhere near the coast – most of us do – you may have noticed the push to clean up the waters.  The UK can’t clean the seas or the air on its own.
  • Providing millions of jobs.  It doesn’t follow, because the UK now has large numbers of related jobs in finance,  cultural industries, education, science or that all of those jobs will be lost – but the reason those jobs are there has been our trade with Europe.
  • Infrastructure projects.  Unbridled free trade has a downside, which may mean the decline of local industries and regions.  The EU has a set of compensatory mechanisms to mitigate this – the social fund and the regional funds – and several of our regions have benefitted from them, at a time when London-based government was ready to let the market rip.
  • Security.  Again, perhaps people don’t remember the dictatorships, the wars or the Iron Curtain.  The EU was set up to stop this, and stop it it has.
  • Influence.  Britain has consistently pushed to extend EU influence in foreign policy and the effect has been to achieve things, e.g. on nuclear non-proliferation, which otherwise would not have happened.

The EU could do more:

  • controlling multinationals
  • limiting tax evasion
  • reducing the costs of currency exchange
  • creating a financial transactions tax
  • guaranteeing rights for its citizens
  • distributing its funds so as to reduce poverty
  • giving the European Parliament the power to legislate, allowing decisions of the ECJ to be set aside, and other powers to reduce the democratic deficit

However, it will only be able to do things like this if the member states let it.

On Charles Murray: a response to Andrew Dunn

I’ve been catching up on some reading, and one of the books I read today was Andrew Dunn’s 2014 study, Rethinking unemployment and the work ethic.  He has a go at a couple of things I’ve said about Charles Murray.  The first, on page 48, is this:

“Writing about Murray, Spicker notes “Looking at his arguments seriously seems to dignify them as something that is worthy of attention, and a long series of social scientists have refused to engage in the mud-slinging.”

Well, actually, that wasn’t a comment about Murray’s arguments, but the quotation has been altered to make it seem that it was.  In The Idea of Poverty, I gave three examples of people throwing insults at the poor, and Murray was the one in the middle. Here’s a longer excerpt from that passage:

Here are some examples. The first is from Edward Banfield’s book, The unheavenly city:

‘The lower class individual lives in a slum and sees little or no reason to complain. He does not care how dirty and dilapidated his housing is either inside or out, nor does he mind the inadequacy of such public facilities as schools, parks and libraries; indeed, where such things exist he destroys them by acts of vandalism if he can’.

Charles Murray associates the underclass with “drugs, crime, illegitimacy, homelessness, drop-out from the job market, drop-out from school and casual violence” … A recent report from South Africa comments:

‘The government has ordered an urgent countrywide study of 14000 households to determine whether women are having babies to cash in on child-support grants. …. In a report in the Herald on Tuesday, a Port Elizabeth social worker alleged that many young mothers were “generally corrupt” and deliberately fell pregnant “to benefit themselves”.’

It is difficult to know how to deal with this kind of material. Looking at the arguments seriously seems to dignify them as something that is worthy of attention, and a long series of social scientists have refused to engage in the mud-slinging, arguing that since the material has no foundation at all, it is not worth talking about. The problem with this is that the arguments keep coming back; they are not going to go away because we ignore them.

I did, however, have more to say specifically about what’s wrong with Murray’s case.  Here’s what Dunn thinks I said:

“Murray has only ever claimed that welfare payments made people averse to doing the worst category of jobs, yet this is routinely overlooked, as is Losing Ground’s lengthy discussion of non-economic work motivation, For example, Spicker says that “Murray’s argument is, at root, that people will not work if they are paid for doing nothing”, before informing us that people work for various reasons including ‘status’. More bizarrely, and equally unhelpfully in terms of promoting meaningful debate, Spicker later limits himself to commenting that in Murray’s view ‘people who receive benefits are being given a disincentive to work, presumably in the same way as people who receive assistance with funerals are being given a disincentive to stay alive.”

Murray himself recognises the importance of status – “status and money are the most influential rewards that society uses to manage behavior” (p178)  – but dismisses it from his analysis of ‘rational choice’:  “When economic incentives are buttressed by social norms, the effects on behaviour are multiplied.  But the main point is that the social factors are not necessary to explain behavior.”  (p.162)

The last bit Dunn cites comes from what I wrote in How Social Security Works before I got on to Murray. Here’s a bit of what I actually wrote about his arguments.

Charles Murray’s book Losing Ground begins with three premises:
“1. People respond to incentives and disincentives. Sticks and carrots work.
2. People are not inherently hard working or moral. In the absence of countervailing influences, people will avoid work and be amoral.
3. People must be held responsible for their actions. … ”
This is not about ‘incentives’ at all. Murray presents his work as an example of ‘rational choice’, which is about the behaviour of the average individual, but there is nothing in these three assumptions that relates to the way that either a ‘rational’ person would behave, or that real people might. The statement that ‘sticks and carrots work’ is based in behaviourism, the psychology of stimulus and response. If a stimulus is present, the argument runs, then a response should follow. This may or may not be true, but it has very little to do with economic argument. Aggregate decisions depend on aggregate preferences, and Murray is not interested in preferences. Rational decisions depend on the balance between costs and benefits, and Murray is not looking at either the non-economic costs or at the opportunity costs of not working.
The second assumption, that people will avoid work given the chance, is an empirical statement, but one which bears only limited resemblance to real life. People work for all kinds of reasons, including money, but also including status, social contact, individual priorities and personal fulfilment. … The third statement really gives it away. More important than any theory of behaviour is that this view of rewards and punishments reflects a set of moral judgments. The sticks and carrots are there, not because they work, but because some people think that is how donkeys should be treated.

Apologies to those who received an earlier version of this, sent in error while I was working  on a train journey.  The gremlins win again.

Reforming defamation law in Scotland

The Scottish Law Commission has issued a lengthy consultation paper on the reform of defamation law in Scotland, but I’ve only just seen it and the deadline for responses is set for tomorrow.  This is not my expertise (it’s forty years since I studied torts as part of English law, and I never used it)  and I’m not proposing to make a submission, but there  are issues of concern.  I don’t share the view of the Libel Reform Campaign that “Corporate bodies do not have a private life, personal identity or psychological integrity.” Clubs, societies and charities do have identity and integrity and may well depend very heavily on their reputations.  The law privileges  financial damage over other kinds of reputational damage, and that by comparison with the protection given to commercial traders there is a relative lack of protection for smaller, non-commercial groups, such as a mosque.

The main issue affecting the academic community is the potential suppression of scientific debate or criticism, most notoriously in the action taken against Simon Singh by the British Chiropractic Association.   There is an exemption made in the 2013 Defamation Act, but it only allows for material in peer-reviewed academic journals or conference proceedings.  (For those who don’t know it, academic books are peer-reviewed too – 13 of my books have been peer reviewed anonymously, 2 others were subject to an editorial board.)  The restrictions mean that academics have to rely substantially on defences of public interest and fair comment, and they are likely to be forced to fold long before they get that far.

They’re voting to take my rights away. And yours.

The polls have shown a marked increase in support for leaving the European Union.  The tone of the debate about Europe has been disturbingly negative.  Beyond that, it has become increasingly bitter and unpleasant.  The arguments in favour of staying have focused on the potential horrors that would visit Britain if we left; the arguments in favour of leaving in particular have plumbed new depths for untruthfulness and xenophobia. It seems likely that voting on the European referendum will be determined by people’s emotional reaction, and there is a strong possibility that this will result in secession.

If the UK leaves, UK citizens will lose their rights as European citizens.  Those rights include rights to representation within the EU, the right to move and live freely throughout the EU, reciprocal rights to public services, and consular and diplomatic protection from other EU countries when outside Europe.

There is something deeply flawed about a process that claims to be democratic but implies that a majority decision would deprive a minority of their rights.  If the vote is to leave, expect this one to come to court.

Some problems with Basic Income schemes, and how to fix them

Ian Gough has condemned Basic Income schemes as ‘deluded and diversionary.’  I’ve been working over the last couple of weeks on a paper looking at these schemes.  The arguments are more detailed than I can conveniently put in a blog, but in a nutshell I can see five key problems with current proposals:

  • Resources cannot effectively be transferred from other benefits in the way that schemes envisage.  The objections are partly distributive, and partly related to the criteria by which existing benefits are distributed.
  • The issue of housing, and Housing Benefit, cannot be set aside.
  • The models applied to personal taxation and National Insurance are not viable.
  • The costs are primarily directed at people of working age and higher incomes, who have the lowest priority.
  • The costs are massive.

I do not think I can offer direct solutions to these problems, but I have identified some approaches that could at least help to lessen their impact. In particular,

  • Basic Income could be accepted as a partial income, rather than an all-encompassing solution.
  • It needs to be developed in tandem with directly provided services, not just income.
  • Personal taxation can be integrated with parts of benefit delivery; National Insurance could be the basis of a different kind of scheme.
  • Direct costs can be reduced through alternative methods of delivery.

That leaves the problem of the scheme’s distributive impact.  Some of the proposals begin by taking money away from people in need.  The reason for doing this is built in to the idea, but even if the poorest are protected, any scheme designed to extend income support to people on higher incomes has to start by directing resources to those people.  To pay for the scheme, and to make it operate fairly, there has to be some way to claw those payments back.  That cannot be avoided; it is the price of introducing a Basic Income for everyone.

I’m not going to put up the paper at this stage, but if anyone would like to see the draft, I’d be grateful for comments; please email me.

Erdogan calls for more tortoises

Osman Hamdi Bey - The Tortoise Trainer.jpg
Kaplumbağa Terbiyecisi (The tortoise trainer), 1906

Turkey has been transformed during my lifetime, both in economic terms and in terms of people’s welfare.  In 1970, the average birth rate for each woman was 5.5, and the under-five mortality rate was 134 deaths for every 1000 children born. Now the fertility rate is 2.0, and there are 19 deaths per 1000.

The progressive improvements in welfare go a long way towards explaining the popularity of the ruling Justice and Development Party, the AKP.  Income per capita has almost trebled during their time in office.  However, President Erdogan has been developing his own solution to Turkey’s traditional problem of governance – how to train tortoises.  Erdogan has expressed the view that any woman who does not have at least three children is “deficient” and “incomplete”.  There have to be more tortoises.

Devolution: the Constitution Committee misses the point

The House of Lords Constitution Committee has published a report on Devolution in the UK.  It’s primarily focused on the relations between the four nations; that means that, despite taking a wide range of evidence, it misses the point almost completely.  It doesn’t understand the most fundamental problem with the whole idea of devolution: that power in the UK is overwhelmingly centralised.  Local government in the UK used to be responsible for hospitals, social assistance, public housing, gas, electricity, water, police, fire, public health, schooling and transport.  Local authorities could develop enterprise, issue bonds to borrow money, and raise money for specific projects. All of those powers have been taken away.  The promise of the ‘Northern powerhouse’ is a pale shadow of what local government used to be.

During the Scottish referendum campaign, I wrote about The failure of the UK.

The most obvious problem is remoteness –  the problem of London-centred government.   That was a problem in the 1920s and 30s, and the centralisation of the UK since World War II  has made it progressively worse.   The process began with the centralised control of services and resources that were necessary in wartime; after the war, while central government gradually (and reluctantly) relinquished control of industry and markets, it retained control of resources and services that were formerly part of local government.  … In the process, the regions – all the regions – have been left behind.  It’s not just the arrogation of control to the centre over public services; it’s been the sustained campaign to deny any part of the regions the power to borrow, to build,  to take action on behalf of their population.

The process of ‘devolution’ is about delegating scraps of authority, rather than allowing regional and local authorities to act.  Federalism is not about the grant of authority: power in a federal government is reserved to smaller units.  There is no understanding in this report of that principle or what it implies.

Meeting the costs of Basic Income

Howard Reed and Stewart Lansley have prepared a new report on Basic Income, for Compass.  The options they examine go some way to crystallize the disquiet I sometimes feel about Basic Income.  They write:

It is not possible to design a scheme that is revenue neutral, pays a decent sum and withdraws most means-tested benefits without significant numbers of losers.

Basic Income would probably leave some very poor people worse off.  It would be necessary to retain a raft of existing benefits, which tends to undermine  the beguiling simplicity of many Basic Income schemes.  That is not a fatal objection, because (as Child Benefit does) a partial Basic Income could at least help to offer some security and stability of income; but it falls some way short of what the most passionate advocates of Basic Income would like to believe about the scheme.

Once we accept that Basic Income is going to be partial, we then have the question of what kind of partial scheme would be best.  We could improve the Basic Income scheme relating to children, fairly simply, by doubling Child Benefit: it would cost £12bn.  We could extend a Citizens Income to all Pensioners at relatively low cost.  We need then to consider what priority to attach to the extension to people of working age, at what level such a benefit could be introduced, and how it could be financed.

The abolition of the personal tax allowance implies a level of intrusion and penalties for people working in marginal employment.  But it doesn’t all have to be done by  Income Tax – it’s not the only option that governments have to raise money.  Other options include, for example,  purchase taxes, property taxes and public income generation.  I’ve suggested before a way of combining a contributory element into a scheme for Citizens Income.  Currently the National Insurance Fund pulls in £113bn p.a.  If we upped NI contributions to 20% and removed the upper limits, that could go some considerable way towards funding a benefit based on a combination of solidarity and work record.

Fraud and error in Universal Credit

Universal Credit was supposed, through some process I can’t claim to understand, to reduce fraud and error in the benefit system.  According to the Business Case, there were supposed to be reduced overpayments worth £14 billion over twelve years, or £1.16 billion per annum.    I commented in 2012, and again last December, that I found this claim implausible: Universal Credit doesn’t do anything about most of the circumstances which lead to fraud and error, but it does add layers of complexity to make confusion and mistakes more likely.  Now we have the first figures from the DWP on fraud and error in Universal Credit.  Universal Credit was overpaid by 7.3%, compared to 5.0% of JSA (the nearest comparable benefit) and 5.2% of Housing Benefit.  It was underpaid by 2.6%, while JSA was underpaid by 0.8%. The system makes more mistakes in both directions.  The DWP points to the complexity of managing some claims – but that, of course, is the point.

The DWP summary pleads that the difference between UC and JSA is ‘not statistically significant”, and that in any case UC and JSA are not directly equivalent.  True enough, but Universal Credit was supposed to cut fraud and error by somewhere between a third and a half of all overpayments.   If UC was supposed to save a third but is actually costing nearly fifty per cent more, the level of fraud and error is running at more than double what was expected.  If it was supposed to save half, it’s three times what it should be.