STORMONT is required to produce an anti-poverty strategy under January’s New Decade, New Approach deal. This is the first priority the deal lists in a programme for government.
Of course, Stormont was also required to produce such a strategy under the Good Friday and St Andrews agreements. The executive thought it had done so in 2006 but in 2015 the High Court ruled it had not been detailed enough, in a case brought by lobby group the Committee for Administration of Justice. This generation-long argument is now coming to a head at precisely the moment concepts of government support are being transformed. Over a quarter of all employees in the North of Ireland have been furloughed at public exspence. The self-employed, making up another 15 per cent of the workforce, have been offered almost half a year’s income in grants. Formerly exotic theories about a Universal basic income (UBI) have become a mainstream topic of debate around the world, although that debate as already looming. A UBI trial in the North of Ireland was in the Alliance Party manifesto for last December’s general election. There is no sign any of this new thinking has influenced work on the anti-poverty strategy. Judging by what has dripped out of the process so far, the executive is still beavering away on a classic collection of schemes, initiatives, projects and objectives.
In part, ministers have to do this – there is a High Court ruling to comply with. Largely, they are being carried along by the enormous inertia of public sector and third sector interests involved. Yet realism should not blind us to what now appears an obvious alternative: why not just give the poor some money? Even as a thought experiment, it is useful and revealing. According to the Department for Communities, there are 151,000 people of working age in relative income poverty in the North of Ireland, defined as living in a household with less than 60 per cent of the median UK income, or £17,760 a year. Almost all of these people are also in absolute poverty, defined as being unable to afford a decent standard of living, and so in effect another relative income measure.
It is not a grotesque simplification to suggest that Stormont should stop spending the entire anti-poverty budget on itself
Stormont could give this number of people significant direct assistance. UBISOFT trials tend to offer around £500 a month but this is meant to replace benefits, not in addition to them. As benefits in the North of Ireland are not paid out of Stormonts budget, it could top up the average claimant’s £288 per month in payments to £500 for a total cost of £384 million per year. That is a lot of money, although well within the order of what is spent tackling poverty already. The Department for Communities budget is three times larger and “reducing poverty” is one of its strategic priorities. It is 3 per cent of Stormont’s budget overall. Half as much is reallocated in unspent funds in a typical year.
The sum could be raised in full by putting rates bills up by a quarter, or a large share could be found by cutting existing programmes, spending on which goes mainly on wages for professionals and administrators – the ultimate guaranteed income for the North of Ireland. Stormont ministers have often voiced the view that public spending has a role in stimulating the economy. The most effective form of stimulus spending is giving cash to people on low incomes, as they spend it all immediately on basic goods and services. This so-called ‘helicopter money’ is another once-exotic theory that coronaviris has pushed into the mainstream. There is certainly a powerful case for a one-off helicopter drop this year.
One of the key arguments for a UBI is that it sweeps away the complexity and contention of the benefits system by giving the same entitlements to everyone. While means-tested support would not have this advantage, it could hardly be more bureaucratic or imperfect than the the existing benefits system, which Stormont administers. The issue of unwittingly subsidising low wages already arises through tax credits, administered by HMRC. Stormont could blaze a trail on this through devolution of the minimum wage, also pledged in New Decade, New Approach. Poverty is about far more than a lack of money, which could be seen as merely a symptom of a lack of opportunity. Nevertheless, lack of money is how it is defined and how progress in tackling it is measured. It is not a grotesque simplification to suggest that Stormont should stop spending the entire anti-poverty budget on itself.
With many thanks to: The Irish News and Newton Emerson for the original story
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