Reform Scotland have published a report with detailed costings for a Citizen’s Income scheme – they call it a Basic Income Guarantee. Unlike most of these schemes, it doesn’t rely on the wholesale abolition of other benefits for its costings. Income Tax would stand at 40p in the pound from £0 to £41,786, then be 60% to £150,000. This is higher (and more transparent) than the Citizen’s Income Trust approach, which tried to retain National Insurance contributions delivering no benefits and to abolish many benefits that shouldn’t be abolished.
There are lots of small niggles I could raise about the details of specific benefits mentioned in the report. (For example, the abolition of Income Support would lead to some increase in costs for Carers Allowance; the provision of basic income would reduce some costs for ESA; DHPs shouldn’t be removed). These aren’t especially important for understanding the scheme in broader terms. There are bigger issues in the detailed scheme which ought to be be resolved:
- the position of pensioners
- the interaction of BI with means-tested benefits such as HB and CTR, and
- alternative methods of finance – the tax rates mentioned are too high, but it doesn’t have to be done all by income tax
I’ve never accepted the argument that Basic Income could resolve all the issues that bedevil our social security scheme. What it could do, however, is to offer people a stable, secure, predictable income to cover essentials – as Child Benefit does.