Showing posts with label Housing. Show all posts
Showing posts with label Housing. Show all posts

Friday, 21 January 2022

Green Gaffs for All

Written by Nicole McCarthy & Des Hennelly and first published at Rupture

The industrial revolution in Britain was the inception of the world of commodification under capitalism that we know today. Factories equipped with machines, first powered by water, then the steam engine and coal, began to mass-produce products. People’s labour time was now directly translated into an hourly fee and companies were learning how to squeeze the most productivity out of their labour force. But before anything else, factory owners needed to attract workers.

In Fossil Capital, Andreas Malm explains how “[t]he water mill called forth the regime of factory discipline, which was, when it first appeared, intensely repugnant to most.” Additionally, the mills were placed near water and away from city centres which had more people free to labour. To solve the issue, factory owners ‘financed the construction of hundreds of housing units – many with attached allotment gardens – a market, a public house and other essential components of a settlement where workers would be willing to live and stay.’[1]

In Dublin in the early 20th century, Guinness built hundreds of flats to house their workers as well as ‘public baths, a market, a public park for workers (the Iveagh Gardens) and sports and childcare functions’.[2] At the time Dublin had some of the worst housing in Europe which created conditions for cholera and other diseases to rapidly spread. Providing housing as well as public baths was a way for Guinness to guarantee workers had sanitary living conditions which would ensure their ability to work day in and day out to make profits for the company. These houses and amenities made working in Guinness a very attractive option, but it also meant that workers  were less likely to strike or disrupt production because their housing was dependent on their job. 

The housing situation is now so bad - not just here but also in other countries like the US, Germany, and Spain - that nearly a century later, employers are once again stepping into the housing market to secure their workforce. The owners of Educate.ie funded the building of 20 not-for-profit houses to allow them to be sold to employees for below market value. Google and Facebook are planning to build affordable housing for their employees in Silicon Valley.[3] 

While it might seem as if Google and Co. are stepping up to cover the gap and helping workers, in reality, companies providing housing or assisting workers with acquiring housing leaves us dependent on our employers for our homes. It would mean workers are likely to feel that they must stay in a job longer than they might want because it’s their only means of accessing affordable housing. We can’t leave it to the “good graces” of individual companies to provide us with quality housing, but neither can we rely on “the market” where housing is built and sold as a commodity for profit, not an investment in people, community and society.

Hot commodity

We hear the term ‘commodification’ being thrown around to describe the (evil) process that occurs when capitalism gets its hands on something - like the commodification of water or even fresh air[4] - but what does it actually mean? It’s quite simple really. It’s when goods, services, ideas, and even people who have to work for a living are produced or manipulated as objects of trade, something you make or invest in solely to sell for profit. 

In the case of people it is our labour-power, our ability to work, what kind of work we can do, our ‘skillset’, that is moulded and geared towards what the market needs. And we generally accept that’s okay, with people all the time saying things like, “why did you study Art History in college, sure what job could you get?" 

This production for exchange value rather than need, creates a market where builders are looking to use the cheapest possible materials and developers are looking to buy at the cheapest price and turn over the largest profit possible. We end up with inflated house prices and sky-high rents, as well as MICA and pyrite disasters. Not to mention that all too often we may get houses, but end up with no vital community structures like shops, schools, public transport or creches.

It is genuinely quite absurd when you stop to consider what the situation actually is. Capitalism has made something as fundamental as shelter an exclusive virtue that is only accessible to those who can afford it. With one of us knocking on the age of 30, still living at home, it is so easy to see examples of how the housing market is failing nearly half a million[5] ‘young’ people who are in the same boat. 

Where did it all go wrong?

In a nutshell, the state stopped building council homes, also known as social housing. Council homes were constructed by local councils with rents based on income, not the market. From the early 1930s to the mid-50s, 55 percent of all new houses built were social housing. By 1961, almost 20 percent of the population was living in a council house.[6] 

Unfortunately, unlike some other countries in Western Europe like Austria, Ireland stopped building council homes, so they declined in availability and quality to the desperate proportions we see today, with 61,880 households on the social housing waiting list as of November 2020.[7] Instead of investing in social housing, the Irish government, like the Thatcher government in Britain, went neoliberal and began relying more and more on the private sector, meaning private, for-profit developers and builders, to deliver housing. This has had all the predictable consequences of skyrocketing rents and increased homelessness. 

Meanwhile, instead of building social housing which would deliver secure housing for families, the government is funnelling money to private landlords through the Housing Assistance Payment (HAP). Through this scheme, the government pays rent to over 57,000 private landlords who continue to control the property and have the right to evict families.[8]

Without the option of council homes, more and more people are pushed into the commodified housing market, where the rich get richer and the poor work themselves to the bone, trying to avoid becoming homeless. Landlords hold the reins of power, charging astronomical rents, evicting families at the drop of a hat and hoarding land till they can make bigger profits on their investments. Workers are not only held to ransom financially but suffer from the stress and worry of losing their home. 

Vacant homes

With all the demands to ‘build more housing’ out there and long council housing waiting lists, you would imagine there’s some shortage of housing. But, actually, there isn’t a shortage of homes per se. There’s a huge number of vacant houses - around 183,000, not including the over 60,000 holiday homes that sit empty for months on end.[9] In fact, Ireland has the 10th highest number of vacant properties in the world based on the size of our population.[10] 

On paper it appears we already have enough housing for everyone in the state. However, it’s probably the case that much of the housing is not suitable as is. Beyond the fact that it’s privately owned and controlled, much of the vacant and unused housing is also either too expensive, is of poor standard and needs refurbishing, is too big or small for the needs of the residents, or not in the area where families need to live to be near to their family and friends. There is, undoubtedly, a shortage of habitable homes in Dublin and other cities. The anarchy of the market means there is an oversupply of homes in some areas where there is little demand for them and an undersupply of affordable homes in cities.

There have been (pathetic) attempts to address this issue in government housing plan after government housing plan. In 2015 there was the Urban Regeneration and Housing Act which saw the introduction of the vacant site levy. To discourage land hoarding, owners were charged a 3% levy in 2018 which rose to 7% for 2019. However, less than a third of the money owed was paid to local authorities in 2019 and in 2020 less than one percent of the money due was paid! Clearly, people have realised that nothing is being done to enforce it.[11] 

The government has again tried to address the issue in their budget plans for 2022 the Zoned Land Tax will replace the Vacant Site Levy in the next two years. This imposes charges on land that is zoned for housing that remains undeveloped and will have a three percent tariff by January 2022, if zoned after that date, there will be a charge after 3 years. The big difference with this tax is that the responsibility for collection lies with Revenue. The previous levy collected just €21,000 of €11.8 million deemed to be owed to local authorities.[12] The Vacant Site Levy has been such a disaster that whatever happens with the Zoned Land Tax is probably going to seem like a huge success in comparison. 

Clearly a tiny tax that the state doesn’t really enforce won’t do it. We need compulsory acquisition and refurbishment of vacant units, reduction of rents to actually affordable levels - with affordability defined as a percentage of income - and ultimately, we’ll need to expropriate corporate landlords that are sitting on empty luxury apartments biding their time while people are literally dying in the streets.  

Additionally, population growth will mean that even if we seized all the vacant properties tomorrow, we’d still need around 35,000 new homes a year. But, left to “the market” this housing will continue to be priced out of reach for the majority of people. It’s also likely to continue the trend of build cheap and sell dear, regardless of what people need, including rapid reductions in emissions and ecosystem destruction. 

Concrete emissions

So what is the environmental cost of a new house? Well, that depends on how the homes are built, with what materials, how far those materials have to be transported, in what manner are they built (one off or by the thousands), and whether they are near or far from public transport. All of these factors will determine the environmental impact not only during construction, but also for our overall society. 

Let’s start with materials used to build the home. In Ireland, most homes are made of concrete. Concrete, if you didn’t know, produces a lot of carbon emissions. Globally, more than four billion tonnes of cement are created annually, which produces about eight per cent of global CO2 emissions.[13] If the cement industry were a country, they would be the third-biggest CO2 polluter in the world with up to 2.8bn tonnes. 

A huge amount of attention has been raised about the problems with plastic which is, of course, good. At least in the way plastic is talked about nowadays, you could nearly say there’s a war on plastic. However, the cement industry creates more carbon emissions every two years than the eight billion tonnes of plastic bags created over the last 60 years. So, why is there no war on cement? Why are we not hearing about the pollution it causes and how society should avoid it? 

Cement is responsible for a tenth of the world’s industrial water use. It creates extremely hot cities and exacerbates respiratory diseases.[14] An abundance of concrete also prevents the soil from absorbing rainfall, creating toxic runoff into our rivers and streams and eventually into our oceans. To top it off, “[i]t also puts a crushing weight on the ecosystems that are essential for human wellbeing.”[15] Why in the world are we still using it to build houses?!

The Irish Green Building Association warned that “Ireland’s new home construction programme will result in huge ‘embodied carbon’ emissions if we continue to build houses in the way we currently do.” These ‘embodied carbon’ emissions are those emanating ‘...from mining, quarrying, transporting and manufacturing building materials, in addition to the construction activities created’.[16] 

There are several other options on offer that are far more sustainable than concrete. For example recycled plastics, hempcrete (hemp fibres mixed with lime and water create a concrete-like material), bamboo, clay and ashcrete (ash is a by-product of coal combustion that is otherwise discarded into landfills) to name a few.[17] Although these methods are more eco-friendly than traditional cement, their widespread use is blocked by a system focused on profit and cutting costs wherever it can. 

The most eco-friendly way to tackle the housing crisis is to reuse and repurpose as many existing materials as possible, but builders will rely on new concrete because it is cheaper and easier to use. In other words, we can’t just leave it to the market, to the developers and builders who seek profit above all else, to decide. 

Suburban sprawl

We also can’t rely on developers to build communities in a way that reduces our overall carbon emissions and environmental impact. Neither can we expect people to not build a home until the state steps in and actually plans community development. Spatial planning - where homes are built, how close they are to shops, workplaces, and public transport - affects community building and it largely determines household and transport emissions. 

Don't get us wrong. It is common to hear of those who have this escape plan from capitalism in the back of their minds - a small plot of land, an eco-friendly dwelling and a little vegetable patch.This is a dream for lots of people who want to disengage from our profit driven society eating away at our souls and our precious environment. 

It’s not just the housing we want and need. As human beings we have social needs too. We want to be part of a community, a group of like minded individuals that we can share our space and resources with. And that’s the thing. It’s really hard to build a community with proper services if people are living spread out, building on whatever land they can afford in a one-off dwelling or living in one of Dublin’s sprawling American-style suburbs because that’s what was cheapest for the developer. 

Every community needs public transport, libraries, shops, post deliveries, community centres, parks, schools and doctors surgeries. We can’t achieve that, nor the urgent reductions in emissions we so desperately need under the current system of build where you can in whatever way is cheapest and letting “the market” dominate.  We also have to demand the rapid phasing out of concrete and for better spatial planning that fosters small village style community development and the withering away of car dependence. 

Traveller accommodation

Let’s also remember that not all who live in Ireland want a “traditional” home. The material and cultural needs of the Traveller community must be planned for as well, including the importance of horse ownership and space for larger families.[18] 

Shamefully, six years after the Carrickmines tragedy, councils have still completely failed to provide Traveller-specific housing. Two thirds of the money allocated for Traveller housing between 2008 and 2018 wasn’t even used.[19] The excuses are many, but none of them change the reality that councils are criminally failing a minority community that is all too often on the receiving end of racism and discrimination. 

Just to give a recent and horrific example, in Limerick racist messages were spray painted onto a house a Traveller family was due to move into. This family was then faced with potential homlessness and the constant fear for their lives as locals threatened to burn the house down if the Traveller family moved in. Unfortunately, Travellers rights activists explain that this is not an isolated incident. Traveller families are often on the receiving end of hate crimes.[20]

Every single person needs a home. We cannot allow Travellers to fight alone for their specific housing needs nor allow the councils off the hook for failing to meet them. We demand housing for all who live here and specific for each community’s cultural needs.

What about cost rental?

Vienna is one of the most affordable major cities in the world and also ranks high in terms of quality of life surveys.[21] To ensure there is plenty of quality housing, the city builds at least 7,000 council homes a year.[22] Over 60% of the population live in state-built accommodation. They utilise a cost rental scheme whereby housing is rented out based on covering the cost of building and maintenance, not private profits for the developers and individualised gains for landlords. Rent in Vienna for one of these social houses is individually assessed, based on your income. No one pays more than a third of their income for housing.[23] 

Looking at Vienna’s cost-rental model, Dublin County councils have plans for 440 cost-rental dwellings to be built in the coming months, due to grow to 2,000 by 2023.[24] The aim is to use cost-rental schemes to provide housing to those who are just above the threshold for social housing but are unable to obtain a mortgage. 

However, the cost rental they’re proposing is different from Vienna’s in one significant way. Rents are not based on cost alone nor income. Government rules mandate that rent must be least 25% below market prices,[25] which still maintains rent as a function of the market, not the cost of building and maintenance nor your income

What are we fighting for?

Imagine that you, and all of your loved ones, have access to a home that will never cost more than one third of your income, regardless of what you earn. This home is near local forest-parks filled to the brim with native trees, bees, birds of all kinds, foxes, badgers, red squirrels, and pine martens. It’s connected to a network of forest-parks across the country, so sometimes we see wolves and wild boar. 

Shops with beautifully crafted products are within walking distance; so are the schools and creches, with ample spaces for all of the local children. Libraries, shared work spaces, and a community centre with activities that suit all age groups are also nearby. A community kitchen with nutritious and free food available to all is open for breakfast, lunch and dinner. The small farms nearby supply it with fresh vegetables and fruit, and the fishers come once a month to bring mussels. Work isn’t too far away. You can get there using the cycling network or hop on the 24-hour free, frequent and fast public transport powered by solar energy. 

All of this sounds like a dream, a utopia. But it’s possible if workers, Travellers, small farmers and fishers were in control of planning our housing and our communities. 

More than six out of ten Irish people believe that the right to housing should be in the Constitution, with more than 80% agreeing that housing is a basic human right. However, a constitutional right to housing alone would not solve the current crisis and probably wouldn’t force the government’s hand to build more publicly owned social housing. We need to consider the bigger picture and demand more than a right to housing on paper. Decommodifying and democratising housing is a vital demand for any housing movement that wants to see long-term, meaningful, and ecologically sustainable change.

“Not My Home”

The housing crisis pushed me to live in the countryside. I, like most others, could not afford the rate at which rental prices were increasing. I was lucky to find a nice property to rent in a beautiful location but it is hundreds of kilometres from my family and closest friends. This means I have increased fuel and car maintenance costs and additional emissions as there are simply no public transport options available. 

I have no choice but to drive everywhere, even to get milk. I do love it here but it is not my home, it is someone else’s and would not be suitable for a partner and child to live in with me. It is a place where I feel I have dignity and privacy, in a city I know I would likely be sharing a place with much less space and of much, much lower quality. 

At my age, I would feel uncomfortable living as I did as a student but I count myself extremely lucky given the unconscionable conditions students have been forced to live in during the last decade. It is hugely disheartening to see so many abandoned properties, both domestic and commercial, often being left roofless for perverse taxation benefits. 

It is equally disheartening to see very large modern properties spring up in the landscape as those with significant wealth build more empty holiday homes. The community spirit, the ability to get to know your neighbours and the ability for my generation and those coming after me to put down roots is being lost here.

Notes

1. Andreas Malm, Fossil Capital: The Rise of Steam Power and the Roots of Global Warming (London, 2016).

2.  Mark Keenan, ‘Home truth: Philanthropic housing has long been used to control working classes’, Irish Independent, September 20 2019, https://www.independent.ie/irish-news/home-truth-philanthropic-housing-has-long-been-used-to-control-working-classes-38516036.html

3.  Sarah Kieran, ‘Building homes for employees: what we can learn from an old idea’, RTE News, Tuesday, 19 Jan 2021, https://www.rte.ie/brainstorm/2021/0119/1190626-building-homes-for-employees-what-we-can-learn-from-an-old-idea/ 

4.  Vikram Barhat, ‘The entrepreneurs making money out of thin air’, BBC News, 16th May 2017, https://www.bbc.com/worklife/article/20170515-the-entrepreneurs-making-money-out-of-thin-air

5.  Michelle Hennessy, ‘Factfind: How many adults under 30 are still living at home with their parents’, The Journal, Feb 2nd 2020, https://www.thejournal.ie/factfind-under-living-with-parents-4981426-Feb2020/

6.  Social Justice Ireland, ‘MORE THAN 1 IN 4 HAP TENANCIES NOT SUSTAINABLE WHILE REAL SOCIAL HOUSING NEED UP 33%’, 16 June 2021,

7.  Ibid

8.  Central Statistics Office, ‘Social Housing in Ireland 2019 - Analysis of Housing Assistance Payment (HAP) Scheme’, 18 November 2020, https://www.cso.ie/en/releasesandpublications/ep/p-hhwl/socialhousinginireland2019-analysisofhousingassistancepaymenthapscheme/

9.  Central Statistics Office, ‘Census of Population 2016 - Preliminary Results’, https://www.cso.ie/en/releasesandpublications/ep/p-cpr/censusofpopulation2016-preliminaryresults/housing/ 

10.  Eoin Burke-Kennedy, ‘Research shows 183,312 of State’s housing stock are classified as vacant’, The Irish Times, Oct 25, 2021, Ireland has 10th highest rate of vacant homes in the world, study finds (irishtimes.com)

11.  Cormac Fitzgerald, ‘What is - and isn't - being done about Ireland's 180,000 vacant and derelict buildings’, The Journal, Jun 28th 2021, 

12.  John Kilraine, ‘New tax on land hoarding to replace Vacant Site levy’ RTE News, 12th Oct 2021, https://www.rte.ie/news/budget-2022/2021/1012/1253227-housing/

13.  Johanna Lehne & Felix Preston, ‘Making Concrete Change: Innovation in Low-carbon Cement and Concrete’, Chatham House Report, 13th JUNE 2018, 

14.  Jonathan Watts, ‘Concrete: the most destructive material on Earth’, The Guardian, 25th February 2019, https://www.theguardian.com/cities/2019/feb/25/concrete-the-most-destructive-material-on-earth

15.  Ibid

16.  ‘Irish Green Building Council call for immediate, drastic action on climate change’, Irish Construction News, 10th August 2021, https://constructionnews.ie/2021/08/10/irish-green-building-council-call-for-immediate-drastic-action-on-climate-change/

17.  Ayushi Desai, ‘5 Green substitutes for concrete’, Rethinking the Future, https://www.re-thinkingthefuture.com/rtf-fresh-perspectives/a1825-5-green-substitutes-for-concrete/

18.  Ailbhe Conneely, ‘Reports find €58m allocated for Traveller accommodation not drawn down’, RTE News, 14th Jul 2021,

19.  Ibid

20.  Ryan O’ Rourke, ‘Activists say Travellers face violence and threats all over the country’, Irish Examiner, 12th October 2021, https://www.irishexaminer.com/news/munster/arid-40719279.html

21.  ‘Vienna's Radical Idea? Affordable Housing For All’, Bloomberg Quicktake,17 September 2021, https://www.youtube.com/watch?v=41VJudBdYXY

22.  Ibid

23.  Conor @TILT, ‘Vienna, the City of Social Housing. Cost Rental in Ireland.’, Affinity, 30th October 2021, https://www.tiltaffinity.com/blog/social-housing-cost-rental-ireland/

24.  Jane Moore, ‘Explainer: Ireland got its first cost-rental homes today - but how exactly do they work?’, The Journal, Jul 7th 2021, https://www.thejournal.ie/what-is-cost-rental-model-housing-5487974-Jul2021/

25. Jack Horgan-Jones, ‘Cost-rental scheme to be open to households earning up to €82,000’, The Irish Times, August 16th 2021, https://www.irishtimes.com/news/ireland/irish-news/cost-rental-scheme-to-be-open-to-households-earning-up-to-82-000-1.4647836

Monday, 7 December 2020

In Defence of Universal Basic Income


Written by Anne Gray 

As a member of the Green Party of England and Wales (GPEW) Working Group on Universal Basic Income (UBI), I take issue with Huseyin Kishi’s post on this blog. It seems he fundamentally misunderstands the GPEW’s proposals and the relationship of UBI to free public services:- 

* UBI is not an alternative to free collective public services that Greens defend and expand, like the NHS, social care, education, public transport and free childcare. Both are affordable – it’s a question of fiscal policy and the will to implement it. 

* Kishi’s cost figure of £331bn is hugely exaggerated; it was the GROSS cost, of the GPEW 2016 scheme, not the NET cost which is close to zero after Exchequer savings from abolishing many existing  benefits and tax concessions. Similarly, NET costs of the 2019 scheme were under £1bn. 

* With the addition of the carbon dividend (explained below), the GPEW rates were considerably higher in the 2019 proposal than in the 2016 one Malcolm Torry criticised in the Guardian. But in both years, illustrative calculations for household types comprising over 95% of households showed no losses compared to the Universal Credit (UC) system. Kishi mentions the Joseph Rowntree Foundation’s (JRF) argument that poverty would worsen if a UBI was introduced without also keeping means tested benefits. 

What JRF criticised were the schemes Compass rejected in a 2016 report[i] that JRF co-funded. Compass concluded, either keep existing benefits or fund a higher UBI by using  a wealth tax or higher corporation tax – and modelled some alternatives to illustrate that. The GPEW’s 2019 proposal has higher UBIs and lower income tax  than any of Compass’s  schemes. 

It introduces a carbon tax, which funds a ‘carbon dividend’ as part of the UBI, and abolishes some tax concessions the Compass report didn’t. However, in case of unusual needs, the GPEW proposal had about £1bn in a discretionary fund for special cases – perhaps a 12-child family, or a complex household with two Carer’s Allowances. 

* Kishi argues correctly that housing benefit has become a handout for landlords. The Green Party would address this through rent controls. For simplicity, most UBI proposals treat housing cost and disability support – which also needs to be substantially increased – as a separate issue.

The New Economics Foundation argument about UBI versus free public services assumes we cannot afford both. 

Surely we can? 

Drawing on corporate and private wealth to augment public spending is vital to reverse austerity in public services. Fiscal sources need to evolve gradually in the context of moving towards more public ownership, less inequality and a greener economy - probably towards more wealth taxes and land taxes. 

Compass (2016 report, pp 19-20) points out that reversing the 2015/6 cuts in corporation tax and fuel duties would raise around £19.5bn, and that taxes on wealth fell considerably in recent years. Since buildings cannot move overseas, the Green Party advocates a land value tax in the  long-term, to enhance redistribution and public spending. One could add; cancel Trident and cut subsidies on fossil fuels amongst other useful savings. 

Compass suggests replacing means tested benefits gradually, moving from an unconditional  supplement to existing benefits to a larger UBI. With reason, the GPEW says introduction of a UBI needs longer than one Parliament. The March 2019 Compass scheme[ii] envisaged long-term expansion of UBI  based on a ‘national wealth fund’ – income-earning public sector assets plus levies on corporate and private wealth. This would be a useful successor to a carbon tax, which if successful in reducing emissions would yield less over time.

UBI would be massively popular for two reasons: ending the ‘poverty trap’  and its abolition of benefit sanctions and means tests. Freed from the huge ‘marginal tax rates’ caused by benefit withdrawal at 63p of UC for each £1 earned, more people would take work even if casual or insecure.  

Claimants suffer untold stress from means-testing and conditions about work search and job-centre requirements, plus the five week wait for UC, threatening letters demanding repayments if the Department for Work and Pensions gets its sums wrong, and criminalisation of people who don’t report changes of circumstances when earnings vary from week to week.

The JRF critique of  Compass’s ‘full UBI’ proposals - the ones Compass rejected because they increased poverty – argues that the current benefit system achieves better targeting of monies at the most needy. Mainly because abolishing the personal tax allowance – a major funding source for UBI - makes the lowest incomes very sensitive to the new income tax rate. 

The rejected Compass schemes had a 30% standard rate plus national insurance at 12% on all income above the exemption band; GPEW 2019 has 32% ‘all in’ with no extra National Insurance. Compass’s latest (2019) proposal had standard  income tax at 23%, but  only 15% for the first £11,850 earned. The GPEW had instead a tax-free earnings band of at least £1000 at the bottom of the scale, partly to save people with tiny earnings from doing tax returns.

Perfect targeting at the poorest is impossible without high withdrawal rates of benefit on low incomes.[iii] UBI evens out marginal tax/withdrawal rates on income (counting the benefit taper rate for UC as a kind of tax). They fall for people dependent on state support, rise for those whose earnings help finance UBI. That fall in the effective ‘tax’ on the unwaged is crucial to fairer taxation and to ending the poverty trap. 

UBI is ever more needed in the post-pandemic period – to deal with mass unemployment and job insecurity, plus providing part of a fiscal stimulus. Its unconditional  nature is crucial. There are many UBI schemes and many ways to fund them. The JRF’s critique didn’t prevent Compass from initiating a major campaign for UBI to alleviate COVID-engendered poverty.[iv] It’s high time to join it and campaign for better public services as well. 

Notes


[i] Universal Basic Income; An idea whose time has come, May 2016, https://www.compassonline.org.uk/wp-content/uploads/2016/05/UniversalBasicIncomeByCompass-Spreads.pdf.

The GPEW 2016 proposal had much lower income tax than in the ‘full BI’schemes that this Compass report rejected. 

[iii] Kishi confuses this process with a means test taper – Natalie Bennett meant the tax take-back. 

[iv] https://www.basicincomeconversation.org/ 

Anne Gray is a member of Haringey Green Party and a supporter of Green Left

Wednesday, 25 November 2020

Universal Basic Income: Time for a rethink


Written by Huseyin Kishi

Senior Green Party Politicians proposal would increase poverty according to modelling.

Since 1983 the then Ecology Party, which was to be renamed the Green Party of England and Wales have argued for a National Income Scheme, later renamed the Citizen’s Income in 1990s and more recently known in the 2000s as the Universal Basic Income.[1] [2]In 2020 Jonathan Bartley in Bright Green heralded it as “...only universal and unconditional protection ensures that nobody is left behind.”[3]. Sian Berry opined “Universal basic income has been Green policy since long before I joined the party, and is exactly what it sounds like: a guaranteed income for everyone, replacing benefits in an unconditional way, which is ready and able to take care of your basic needs if a personal crisis hits.”[4]

For Greens it wasn’t a widely discussed policy until 2015, in which it was declared by the Guardian as “...The renewed focus on the cost and feasibility of a citizen’s income, including the way in which it would differ from the government scheme to integrate universal credit, demonstrates the extent to which Green policy is now being taken seriously. “

Baroness Bennett, who recently said in an interview with Green World “A universal basic income, to meet its proper definition, ensures that you can meet all of your basic needs with an income that comes to you simply for being a member of a society – unconditionally.” [5]

An idea whose time has come

For its proponents, it seems as clear as day for its implementation. A radical shift for welfare and the alleviation of poverty and unemployment. They then point to a Finish trial but a press release that was published in 2019 said “The positive evaluation may not relate to basic income as such but to public debate around basic income and to the fact that people were members of a selected group” adding “The Finnish experiment was about partial basic income targeting able-bodied people without work, it was not about universal basic income.” [6]

It did not do anything near what its proponents had argued – despite the positive headline in the New Scientist.[7] For the Green Party, in their 2015 manifesto they state “Scrap most of the existing benefits apart from disability benefits and Housing Benefit. Abolish the income tax personal allowance. Then pay every woman, man and child legally resident in the UK a guaranteed, non-means-tested income, sufficient to cover basic needs – a Basic Income”. [8] They followed this up in their 2019 manifesto by stating that it would be funded by a Carbon tax and additional payments would be made to those with children or were disabled. [9]

Impact

Molly Scott Cato said in her article for the Ecologist “...But a basic income would only provide fundamental security and would leave most people on lower incomes than they enjoyed before the crisis.”[10]

Moreover, Caroline Lucas in 2016, though in support of the policy, noted “A universal payment for all must not undermine additional help for those who need it most.[11]  The party’s own consultation paper in 2015 stated “It includes abolishing most existing benefits, abolishing income tax allowances, changing employees’ National Insurance, reducing tax concessions on private pension contributions, and replacing the current contribution-based basic State Pension (for existing pensioners) and the new single-tier flat-rate Pension (for new pensioners) with a non-contributory Citizen’s Pension.” It would still pay housing and disability as additional payments and the total estimated cost was £331 billion.[12]

At the time the Independent noted “The Greens have since admitted that it “would not be practical or right to carry out that change within a single parliament.”[13] Sky News declared “The party says this is a long term ambition rather than concrete policy going into the 2015 election - but the thought of giving millionaires more money is likely to be a voter turn-off.” [14]

Individualism over the collective

There is an established example of an income-subsidy, though means-tested, that provides some economic support. It is called housing benefit and has been place since the 1980s. Sir George Young, the then Minister of State for Housing and Planning, remarked in 1991 that: 

“Housing benefit will underpin market rents-- we have made that absolutely clear. If people cannot afford to pay that market rent, housing benefit will take the strain.” [15]

Housing benefit now costs £22 billion a year and does not lessen the risk of eviction, improve the quality housing, nor the energy, utility and tax costs either. As the Institute for Fiscal Studies notes: 

“...for most working-age people it covers a lower proportion of their actual rent than was the case in the past.”[16]

Housing benefit – far from merely taking the strain when it was believed that the market would later expand for all income-bands – continues to grow and has now become a private landlord subsidy. An aversion to capital spending in housing and the shift to income-subsidy has not resulted in a housing market that competes on price, quality and amenities. More concerning, due to changes in housing benefit from 2011, rather than payment going directly to the landlord payments were paid instead to the tenant, this resulted in landlord arrears.[17]  Rather than benefiting the poorest, over the last three decades it has increased the property portfolios of private landlords according to Shelter.

Returning to universal basic income, In 2015 Baroness Bennett stated in the Guardian that a citizen’s income would be withdrawn when a citizen’s income reached an unspecified level.[18] Milton Friedman, the free-market economist, also agreed with the Green Party in their 2015 and 2019 manifesto, and instead proposed a negative income tax in his book  “Capitalism and Freedom.” Rather than benefits: 

“...he wanted to give poor people cash rather than an array of welfare benefits. People could then use the money as they saw fit”[19]

Likewise, in 2018, the Adam Smith institute proposed “Basic Income would ensure that ‘capitalism and efficient redistribution can be vindicated in equal measure”[20]

Assets over income-subsidy

Senior Greens often refer to UBI as increasing security and choice – but in effect – as was seen with housing benefit; this isn’t guaranteed. In fact, when Joseph Rowntree Foundation undertook modelling of it. They found that

“Those wholly dependent on state support would be neither better nor worse off if a UBI were introduced at the level of the current safety net. Those with modest earnings would benefit most from having the new non-means-tested payment. “ adding that “...it is not possible to raise the revenue needed to support them from taxation ­– even by increasing the basic rate to 30% from 20%. The UBI schemes also INCREASE poverty for children, working-age adults and pensioners compared to the current tax-benefit system: child poverty rises by over 60%. [21]“.

Similarly, the New Economics Foundation found “making cash payments to individuals to increase their purchasing power in a market economy is not a viable route to solving problems caused by neoliberal market economics” they also note that  “If cash payments are allowed to take precedence, there’s a serious risk of crowding out efforts to build collaborative, sustainable services and infrastructure”[22]

Senior Greens have stated we need a radical shift in thinking about welfare – but it is clear that universal basic income does not serve progressive ends and in that regard shares more in common with conservative thinkers and supporters of neoliberalism. They should instead look to take a leaf out of Karl Polanyi’s work – who observed that markets are planned as the economy is embedded into society and thus shaped by the state – but there has been previous resistance towards this – with the exclusion of market forces in welfare and housing in the 1940s.[23]

In order to provide unconditional protection while accommodating the most vulnerable. We should move away from the individualist universal basic income and its substantive costs. Instead we should look at the long-term collective and public ownership of universal basic services. Assets such as housing, information and transport would benefit us all.  

More information can be found here: universal_basic_services_-_the_institute_for_global_prosperity_.pdf (ucl.ac.uk) 

Huseyin Kishi is a writer and photographer based in London. He is a member of Sutton & Croydon Green Party

Notes

[1]          https://green-history.uk/library/doc-archive/category/28-ep-manifestos

[2]          The Green Party | Social Welfare

[3]          Labour's failure to embrace UBI shows they haven't grasped the scale of the crisis | Jonathan Bartley (bright-green.org)

[4]          Sian Berry: This is the time to bring in universal basic income | Hampstead Highgate Express (hamhigh.co.uk)

[5]          The decade of universal basic income | Green World

[6]          https://www.helsinki.fi/en/news/nordic-welfare-news/heikki-hiilamo-disappointing-results-from-the-finnish-basic-income-experiment

[7]          Universal basic income seems to improve employment and well-being | New Scientist

[8]          Green.pdf (lancs.ac.uk)

[9]          Green Party Manifesto 2019.pdf

[10]          Coronavirus and the Universal Basic Income (theecologist.org)

[11]          The case for a Basic Income is growing | Caroline Lucas

[12]          Basic Income: a detailed proposal (greenparty.org.uk)

[13]          https://www.independent.co.uk/voices/editorials/general-election-2015-green-party-has-failed-make-its-mark-10196826.html

[14]          How Will Green Party's Medicine Go Down? | Politics News | Sky News 

[15]          House of Commons Hansard Debates for 30 Jan 1991 (parliament.uk)

[16]          Doubling of the housing benefit bill is sign of something deeply wrong - Institute For Fiscal Studies - IFS 

[17]          The impact of the direct payment of housing benefit: evidence from Great Britain (shu.ac.uk) 

[18]          Green party outlines plan for basic citizen’s income for all adults | Politics | The Guardian 

[19]          Negative income tax, explained | MIT Sloan

[20          Rising evidence for universal basic income — Adam Smith Institute 

[21]          Universal Basic Income - not the answer to poverty | JRF

[22]          Universal basic income: new study finds little evidence that it can live up to its promise | New Economics Foundation

[23]          https://www.dissentmagazine.org/online_articles/karl-polanyi-explainer-great-transformation-bernie-sanders