A short research note from the James Hutton Institute offers a gloomy prediction for the future of Scotland’s remote areas. About half the country is sparsely populated, in the sense that it takes a journey of more than 30 minutes to reach places where 10,000 people live; large parts of the country are, more or less, wilderness. Low populations mean limited development, limited opportunities and limited services – schools, banks, supermarkets and fuel have to have a population base to justify their existence. The projected populations of the islands and Argyll and Bute are expected to fall by a third; the population of the Highlands is likely to fall by a quarter.
Lesley Riddoch offers a splendid piece in the National, crackling with ideas about the kinds of things that could be done to help remote areas. The article’s not helped by a headline that suggests a different kind of content, but Riddoch’s article points to to issues including energy, land ownership, housing, communications, and local governance. I know that some people will question whether human beings ought to be allowed into empty and wild spaces, but we need to question the wisdom of allowing half a country to wither away.
The second stage of the Scottish Social Security Bill is complete. Unusually, most of the issues raised as amendments have been incorporated, a clear sign that the legislators have taken comments seriously; there will be a Scottish Social Security Commission to review legislation and regulations, the rules on overpayments have been considerably qualified, and I was particularly gratified to see two new clauses on alienability (48A and 48B). Mandatory reconsideration is still there before a claimant can appeal, in a piece of macho drafting depending on multiple cross-references to determine what can be appealed and what can’t. The Bill is not perfect, then, but it is much better for the amendments.
Something remarkable happened yesterday. The House of Commons passed this motion:
this House supports the maintenance of European Union citizenship rights for Welsh, Scottish, Northern Irish and English citizens, notes that the range of rights and protections afforded to individuals as European Union citizens are integral to a person’s European identity; further notes that many of those rights are closely linked to the UK’s membership of the Single Market; and calls on the UK Government to ensure that the UK’s membership of the Single Market and UK citizens’ right to European Union citizenship are retained in the event that the UK leaves the EU.
That argument (and indeed many of the arguments made in Parliament) has been the subject of several entries on this blog, the petition I have raised to the European Parliament (0922/2016, here), and a legal case currently being considered by the Dutch courts. The position to date has been that the British Government has signally failed to protect the rights of British citizens, probably because they fear that if they make the attempt, they will have to make reciprocal concessions to the EU. That would be worth doing, but the central argument is not one about protecting the interests of the UK; it is to require the EU to live up to the commitments that it has made to its citizens.
The government of President Macron has proposed a series of changes to unemployment benefits. The context is very different to the UK. Unemployment benefits are not run by the government, but by Unédic, a formal consortium of employers and trades unions. The benefits are contributory and related to previous income (which makes them generous by comparison with UK benefits); they get reduced for longer periods of unemployment.
The proposed reform makes three substantial changes. First, it will extend unemployment benefits for the first time to the self-employed. Second, employees will not longer be excluded from claiming if they have given up their previous work voluntarily. The government is justifying this by suggesting that it offers people the opportunity to start a business. At this stage, it’s not clear whether that will be a formal condition; if it’s not, there are others who may find different uses for it. (The Thatcher government in the UK used to have a separate system of support for small business start ups, and one person I knew at the time was funded to become a successful writer of comedy.)
Third, there will be new sanctions; a person who refuses two reasonable offers of employment will have benefits halved. That’s a little more leeway than claimants in the UK get, where claimants are driven to destitution for missing an appointment. A report yesterday gives two examples of people having benefits stopped for the serious offence of being in hospital at the wrong time.
I was surprised to read a report from the Helsinki Times, that the OECD is recommending Finland to forget about Basic Income and adopt Universal Credit instead. It took me a little while to find the source; it’s in a blog post written by Jon Kristian Pareliussen. He had previously expressed his appreciation for Universal Credit in a paper written in 2013, when the system was still imaginary rather than practical. Even at that time, the idea that work incentives would be preserved by a marginal rate of deduction of possibly three-quarters – that’s the combined effect of tax or NI plus the loss of UC – was fantasy.
The OECD’s opposition of Basic Income has a rather stronger foundation. Last year’s report on Basic Income explained that in each of the countries they looked at, schemes for a Basic Income were likely to leave many poor people worse off. What Basic Income wouldn’t do is to undermine work incentives, because there is no added marginal rate of deduction.
I’ve done a few things this week that I probably won’t be able to do in the same way in a little more than a year from now. They include:
- driving through three European countries without an international driving licence or extra insurance
- taking up employment without a work permit
- using my mobile phone on UK rates (if you imagine that UK phone companies will stick to European rules when they don’t have to, think again; there are still penal rates applying to phones used on the sea crossing).
Theresa May has called for the UK to ‘come back together’ and promises to take account of “the views of everyone who cares about this issue”. All the government’s attention has been focused on trade and migration. Those of us who care about having existing rights taken away have been offered no thought or consideration at all.
A report from Stephen Kidd about Mongolia and Kyrgyzstan tells us that the IMF have been forcing governments to limit the scope of universal benefits for children. At a time when the evidence for universal programmes in less developed countries has rarely been stronger – see, for example, S Davala, R Jhabvala, G Standing, S Mehta, 2015, Basic Income – this is deeply depressing.
I discuss the issues about targeting briefly on my social policy website. If “targeting” means that there’s a choice of group (for example, payments to pensioners or nursing mothers), it can work. Targeting “the poor” is much vaguer and more difficult to do effectively. The process is complex and hard to do with any precision; some favoured methods, such as geographical selection, really don’t work well. A report by Australian Aid, Targeting the poorest, found that for poor people the process could seemed bizarrely random, with outcomes that they attributed to luck or divine judgment. The evidence suggests that selectivity is rather more effective at stopping people from getting benefits than it is at getting them to the people who need them most. By contrast, universal benefits work. Arguing to scrap benefits that work and replace them with rules that don’t makes very little sense.
I have made a donation to Oxfam. While I have some reservations about Oxfam’s stance on a range of issues, I have none about its integrity. I’d like to endorse Richard Murphy’s defence of the organisation, and his follow-up. Oxfam took swift and serious action in relation to its staff in Haiti in 2011. It reported that there were problems at the time; the offenders were fired; and since then it has publicly reported on its actions relating to child protection (most of which concerned its charity shops). Oxfam’s main failing was that its disclosure was not full; I am not sure that it could have been.
Oxfam also claimed in its annual report to have helped help more than half a million people in Haiti in 2011/12. This is from their web page on their work in Haiti:
Oxfam’s 100 strong team, including 15 emergency specialists, was on hand to respond with provision of clean water, shelter and basic sanitation, as well as by helping community canteens provide daily hot meals.
By providing paid employment to the people in the camps; to keep the camps clean, build latrines and clear up their destroyed neighborhoods, we put money in the pockets of those who needed it most and helped them improve their living conditions. We reached 300,000 people with aid in the first three months.
The level of destruction and logistical challenges were among the worst Oxfam had ever faced. The Oxfam office and a key warehouse full of vital water and sanitation equipment were destroyed when the quake struck. Like thousands of others in Haiti Oxfam staff were not left untouched by the disaster.
Despite personal losses, including two Oxfam employees, a day after the quake most Oxfam staff were back in the office and they managed to salvage some of the stock from the destroyed warehouse. Oxfam Country Director, Yolette Etienne told her staff there was “no other option but to work and to work harder since we have the privilege of still being here and we can help people to overcome their desperation.”
Before we join the chorus of criticism about Oxfam, let’s remember what really matters.
I have always read reports from the Institute of Economic Affairs with some interest, even if I rarely agree with them. I was disappointed by the report released last Monday about the wonders of a trade agreement with the USA. It covers little more than the sort of objection one might find discussed in the Daily Mail: US firms will invade the NHS, they’ll want private justice and they’ll lower our health standards.
Those objections are all real, but there are other concerns, too. The USA is a federation of states each of which has its own laws. The States of the USA strictly license occupations, and 30% of all of its employment is restricted by this kind of licence. A licence to operate in the USA is not a licence to operate in each state – as universities, bankers, and even the likes of florists and barbers can attest. This is critically important for services; and services, not manufacturing or agriculture, now represent the core of the UK economy.
TThe UK is not without its own restrictions of course; nearly 20% of all UK occupations are now restricted. My source for that statement is the Institute of Economic Affairs, in a comment they released on Thursday. But the UK is a unitary state with its own unified market, so one licence generally serves for all the UK. To get parity, UK services would have to negotiate not just with the US federal government, but separately with each of the 50 states. Any trade agreement with the USA will be one-sided.