Summary
The Citizen’s Income (CI)—an unconditional payment from the government to all citizens, irrespective of their means—is not a new idea, but one in which there has been some renewed interest in recent times. CI has been proposed as a solution to a multitude of problems in the welfare system. Purported benefits range from providing security of income for all, to simplifying the benefit system, to protecting against job loss as a result of automation. CI may be an attractive idea on several counts. We convened a panel of experts to help us understand the appeal of CI and its practical application. Ultimately, we were at a loss to understand how CI could even partially resolve the issues it purports to address.
There are fundamental practical problems with implementing CI. A universal CI would simplify welfare by replacing the existing benefit system. Yet providing an adequate unconditional income for all would require prohibitive increases in taxation and may undermine incentives to work at all. Some proponents of CI therefore suggest a more modest unconditional payment; CI would be paid alongside some existing benefits to avoid creating substantial losses for claimants with, for example, disabilities or high housing costs. Yet the complexity of such a system would undermine a key argument for introducing CI, and leave the promises of income security and poverty reduction largely unrealised. At best, we would end up with something very similar to Universal Credit.
There are significant challenges to overcome within the welfare system: ones that supporters of CI rightly take an interest in addressing. But CI is not a panacea. Indeed, there are many problems to which it is neither the optimal, nor even an appropriate, solution. CI risks being a distraction from workable welfare reform. We urge the incoming government not to expend any energy on it.
27 April 2017