What is a Participation Income?

One of the policy ideas that I keep an eye on is the citizen’s income, or basic income – a universal safety net paid to all adults in lieu of a complex welfare system, rewarding unpaid work and giving everyone a stake in the economy. I’ve explained what it is and why it’s a good idea in more detail before. Here I want to look at a closely related idea, the participation income.

When the citizens income is being discussed, one of the common rejoinders is ‘define citizen’. Would my Polish neighbours qualify, and thus receive the basic income? What about immigrants from the Commonwealth? Or international students? In a country that’s increasing hostile to immigration, the idea of paying out to non-British people would seem like a non-starter. If it’s not open to anyone but British citizens, (something that leaving the EU would make possible, incidentally) how will that affect how we grant citizenship, and to whom? And do we really want that kind of discrimination, where some people get a social safety net on the basis of a birth lottery, while others who are here and paying taxes get nothing in return?

A second common objection is that there is a moral hazard to the idea of money for nothing. A lot of people hesitate at giving a guaranteed minimum income to people who don’t want to work. Surely if we had a basic income, even more people would choose to live off the state? Again, in a country wary of ‘scroungers’, that seems like a major obstacle.

The participation income is compromise that overcomes both of these issues. Rather than a true universal and non means-tested payment, it would be conditional. To receive the basic income, people would need to be participating in society. That could be formal work, it could be unpaid work such as care. It could be volunteering, or education, and of course people who were disabled or unable to work wouldn’t be excluded. Anyone who was contributing to society in some way would be eligible to enjoy its rewards.

Economist Tony Atkinson was the first to propose a participatory income back in the 90s. He argued that a universal basic income was too big an ask politically, and only by compromising could it ever become a reality. And it is a compromise – one of the advantages of a citizens income is that you can sweep away most of the bureaucracy and administration around benefits. If we have to keep a big bureaucracy in order to check whether or not people are making an eligible contribution, the whole business may be prohibitively expensive. And there’s still the question of what we do with those who don’t qualify. When Atkinson first wrote about the participatory income, he estimated that only 1% of people wouldn’t receive it. Would we leave them with no state assistance? Or devise some kind of workfare scheme, pushing people into meaningless programmes in order to tick the contribution box?

So the participatory income is by no means a problem-free tweak on the idea of a citizen’s income. There a trade-offs, making it politically palatable but potentially making it more expensive and less fair in the process. Still, some would suggest that a participation income might be a good first step towards something more universal. It would break the ground, using the existing architecture of the welfare state. As it gains acceptance, it can go further and take steps towards universality.

I’m still thinking about the Participation Income, and I suspect it could be applied in a variety of ways to overcome some of the problems. I also expect that if we ever have a debate about basic income in Britain, we’ll be hearing more about participation.