Carer Watch Campaign against the Welfare Reform Bill

The new Welform Reform Act 2009 (see here for brief summary), abolished income support for people with disabilities, terminal illnesses and very young children in favour of ability tested benefits (ESA).

Carer Watch have launched a campaign (which I fully support):

"CARERWATCH ARE FIGHTING TO RESTORE UNCONDITIONAL BENEFITS TO ALL PEOPLE WITH SEVERE AND ENDURING ILLNESS - SOME WITH ONLY MONTHS TO LIVE. IN PARTICULAR CARERWATCH WANT THE THREAT OF SANCTIONS AND CONDITIONALITY under ESA REMOVED FROM PEOPLE WITH SEVERE AND ENDURING MENTAL HEALTH ISSUES."

Already there are reports that the assessments are penalising people who need support. These assessments are being carried out by private companies (as you would expect of this government, nice little profit margin here). But this is no way to support vulnerable members of society! One measure of a civilised society is how it supports people who need it, clearly Labour have not understood this.

The solution is relatively straightforward:

1. Reduce means and ability testing wherever possible.
2. Introduce a Citizen's Income and provide additional support for those who with diabilities, young children, older people etc.
3. There needs to be an assumption that people will seek work if they can. Reform the benefits system so that it gets rid of the benefits trap, allows people to seek smaller amounts work and accepts that some can't work.

Inequalities and the case for a Maximum Wage

This piece appeared on The Daily (Maybe) yesterday and in true Re-Tweet fashion I've posted it here too (as it was written by me).

Thirty years ago a newly elected Conservative government attempted to quash a ground breaking report by Douglas Black. The report, commissioned by the previous government, was a clear indictment of the impact of poverty (and relative poverty) on health. Just few hundred typed copies of the Black Report, as it come to be known, were ever published but the impact of the report was significant and has been a basis for public health thinking ever since.

Moving forward 30 years, The Equality Trust explain in graphic detail how it is not only poorer countries that have poor health outcomes, but also that countries which have higher inequalities have poorer health outcomes. These poor health outcomes are not just relating to physical health but stretch across the full spectrum from mental health to societal health (for example violence, community cohesion and social mobility).

The evidence is clear, an unequally society is a poor society. The evidence is also clear that Britain has become more unequal; this quote is from National Statistics: "Between 1981 and 1989 disposable income in real terms grew by 38 per cent for those at the 90th percentile. This was more than five times the rate of growth of 7 per cent for those at the 10th percentile.". A quick look at their graph of income since 1971 shows that the gap between rich and poor has grown continually except for a short period in the mid 1970's.

National Statistics also report that '1992 to 2006/07 was a period of relative stability' for income inequality. The minimum wage, introduced in 1999, has had an impact for some but it simply hasn't achieved the narrowing of relative poverty that is required. Two further mechanisms for household income are necessary, a citizens income and a maximum wage.

Maximum wage is simply capping the maximum earnings of an individual, either through the use of a tax bracket that returns 100% of the earnings to the state or through primary legislation to prevent employers paying over a particular ceiling. Practically speaking, a 100% tax bracket looks like the most effective method of implementing a policy as it should capture unearnt income and income from multiple sources (assuming that people don't dodge tax!).

While there are those in favour of a maximum wage, such as Andrew Simms from the New Economics Foundation, there are of course detractors on the right of the political spectrum. It is easy to see why it is the right wingers who are opposed, given that the majority of high earners are on the political right and the rest of the right are desparate to join them. The Adam Smith Institute claims that the country's most productive workers (doctors, business owners and bankers - it does actual put bankers in this category) would move abroad. They go on to suggest that the best was to reduce poverty is through the 'Trickle Down' of wealth.

Standard right wing thought but the evidence goes contrary to this.

Firstly the concept of 'Trickle Down'. It is surely time for this phrase to be consigned to the dustbin of patronising and obnoxious terms. Trickle down suggests that the elite should hold the nations wealth and provide a little cash to the underclasses to stop them starving. It suggests that people are not equal and shouldn't strive to be. It keeps the ruling class, er... ruling.


The concept of trickle down serves to widen the poverty gap within countries by enforcing and expanding the existing inequalities. Sure, it will address absolute poverty and may increase a nations overall wealth, but that is not what needs to be addressed.

Secondly, the claims that productive workers will flee the country are without evidence. Of course the Adam Smith concept of 'productive' is a little different to the concept held by the majority of people. Ask the man on the Clapham omnibus whether he considers nurses or bankers to be more productive!

Concerns about highly skilled workers fleeing the country are also misguided. In Cuba, doctors are paid around twice the national average wage, compared to around four times in the UK, however Cuba has one doctor for every 174 people and the UK has one for every 600. There would be a balance of greed versus good community that people would weigh up before emigrating for financial reasons. If society was cohesive and enjoyable, it is unlikely that most would want to leave for a country where the quality of life was poorer. There is far more to life than hard cash.

Assuming that the majority of the arguments currently against a maximum wage are false, there remain just two questions. Firstly would a maximum wage actually help to reduce inequalities and secondly what should the level of maximum wage be?

If the approach of a 100% tax bracket is used and the taxes are reinvested in citizen's income / health care / regeneration / redistributive schemes, then it is clear that inequalities will reduce. The longer term picture of a 100% tax bracket gives similar results to a maximum wage through primary legislation over time as companies stop advertising jobs with huge salaries. As total income, including unearnt income from profits, could not exceed the maximum, money would need to be spent somewhere in society over time (unless company's reserves get bigger and bigger - maximum profits legislation anyone?). The gap between the rich and poor will start to close.

And as for the maximum wage... let's start at £150k and reduce it by £5k a year to £100k. Anyone not able to survive on £150k or even £100k needs to think very carefully just what they are doing to society and the planet.

£165 to those who need it not £1b to those who don't

Yesterday Jean Lambert announced the Green pledge to increase the non-means tested state pension to £165 a week. It was National Pensions Action Day yesterday and it is great to see such a strong statement from the Party.

In contrast, the Indy reports on the £1 billion nuclear white elephant. There are so many reasons to say no to nukes and this is one of them. £1 billion would go a long way to funding renewable energy, to insulate lots of houses, to increase public transport. It could also fund and increase in the state pension for 300,000 pensioners for one year (adjusted for rounding errors on my back of fag packet).

I know where I'd not want my money spent...

Spot the difference

Spot the difference:



The one on the left is real. More worryingly it is written by David Cameron about our "Broken Society" that needs: "more police spending time in our communities – not arresting MPs just trying to get on with their job. And, yes, we do need tougher punishment, longer sentences and more prison places.". This is follow by some words on supporting families - which clearly welcome, but then he goes on to talk about privatising more schools and how he doesn't understand the benefits trap at all suggesting that people who turn down jobs should lose their benefits.

Most worrying is that this is from someone who grew up in the 1980's under Thatcherism. Obviously Eton shielded him completely from the realities of Thatcher's rule; as someone who also grew up in the 1980's but in the Medway towns, I wasn't shielded at all and know exactly how bad the Tories are for society.

Cameron is clearly signalling that he intends to be hard on people who turn to crime and hard on people who cannot earn enough to live.

The wide gap between rich and poor is a key factor in crime, a gap than needs to be closed through progressive taxation and redistrubitive policies, not tax cuts for rich friends and jail for the poor.

The benefits trap is something that the Tories will never get, I wonder at what point Cameron and Osbourn were forced onto the dole? We need to give everyone a Citizen's Income, an income payable whether we are in work or not. One that won't be reduced when we find a low paid job or a high paid job. One that redistributes income and doesn't leave people unable to work because they would lose income.

Cameron is right about one think, society is broken. Successive governments have seen to that. Instilling consumerism on society, ladening it with debts, screwing the climate, the money and the energy. Society is broken, but Cameron and his cronies are as much to blame for its state as Brown and Blair.

Green Economics in The Times and FT

Samuel Britten in the FT on Thursday described an early paper by Milton Friedman which examined a 'Framework for a stable economy': "budget deficits would be financed entirely by the creation of money by the Fed and surpluses used to retire money. This would best be accomplished by adopting the 100 per cent reserve proposal for banks, “thereby separating the depositary from the lending functions of the banking system”."

The following day John-Paul Flintoff wrote on The Times' blog: "With the news dominated this week by ongoing cash shortages, rising joblessness and the need to protect the benefit system against fraud, I'm wondering if the time has come for a Citizens' Income."

While monetary reform isn't Green Party policy (yet - some of us are quite keen), it is radical and has some great supporters. I remain gobsmacked that Greidman considered it though.

Citizen's income is Green Party policy and is a fantastic idea. Paying every citizen a single income that they can top up with income from work removes the stigma and benefit trap associated with the current system. It is cost neutral to the overall tax burden (the tax that you pay gets repaid as CI - obviously if you are on a higher income you'll lose a bit and on a lower income you'll gain a bit). Pensioners should get more than the basic CI level reflecting the lower chances that they con top up their income with work.