 Dwi gan addysg iddo i gael i'r ddiddordeb cyfforddiol, maen nhw, aro byddwn i'r fi gael i'r ddiddordeb cyfforddiol methu 2017. Gweithio gadeg yn gwneud allu'r cyffordd yng Nghymru, a wlaff i ddim yn gweld hyn. Rwy'r hyn yn ddiddordeb cyffordd cyfforddiol yn ganddiannig iawn o gynllunol o'r cyfforddiol, o'r cyfforddiol i'r ddiddordeb cyfforddiol, ac rydw i ddim yn ei wneud o ffagorod. Agendi item 2 is the citizens income. We welcome the witnesses here today. Professor Donald Hirsh, director of the Center for Research and Social Policy, Lochblad University. Siobhan Mathurz, advisory board member, Reformed Scotland. Annie Miller, chair, citizens income trust and trustee, citizens basic income network in Scotland. Howard Reid, director, landmine economics, and Anthony Painter, action and research centre RSA. I say thank you very much for coming along today and thank you very much for your submissions. Very, very interesting reading and I'm sure the committee will have plenty of questions to ask. Could I perhaps start off just by asking you all a general question regarding, we've got a pilot scheme, we've got a trial, we've got to experiment different names. What in your opinion would be the difficulties that should be in the Scottish Parliament's face if we're introducing a basic income in a Scottish context? Mr Painter, do you want to go first? Thank you very much for your opportunity to speak to you this morning. The basic problem is that basic income, in effect, is not just a change to welfare and benefit. It's a wholesale change to the system of social assistance and tax, and so it's a holistic change, and there's a reason for that because it's focused on a broad swath of people. It's not just about supporting those out of work or in lowest incomes, it's supporting all those up to median income and belong. Therefore, the problem from a constitutional and powers perspective is that you do need to have power over the whole system in order to implement a full universal basic income. However, that doesn't mean that there aren't useful experiments or trials. Even if they do fall short of a full universal basic income, maybe we can go into what some of those might comprise later on in the conversation. Who wants to go next? Fraser Hirsh? Yes, as I agree with that, it's also worth saying that a lot of the kinds of experiments that are being cited in different countries such as Finland, the Netherlands and Canada, in my view, are not experiments with basic income schemes, they're experiments with aspects of those, and that immediately creates difficulties. The most simple way of doing things, which may be possible here, is some way in which people who've been on benefits can retain those benefits regardless of whether they work over a period. The way that that's not simulating a full basic income scheme is that there is no mechanism in place to pay for it, and many of the proposals, such as the ones put by witnesses here, involve abolishing tax allowances and increasing basic rate of income tax to something like 40%. That means that if somebody were to be allowed to work and not lose their benefit, they would still be paying 40% on all of the income that they earn. That's actually, to me, in terms of even a full scheme, quite a real issue. To try to say, we're going to test behaviours without changing the tax system, but with giving people the benefits of that, I think, is inherently problematic. When we started looking at it from a Scottish perspective, and it soon became clear that it was really quite difficult to run the numbers on just a Scottish perspective, even with the new devolved powers, it's easier to potentially do pilots, and I'm very encouraged that Fife and Glasgow are looking at doing pilots, but it's easier to potentially do the pilots than it would be to roll out a wholesale change. We're very aware that even the pilots would depend on co-operation with the Department of Work and Pensions. I think that the two key questions given the current set of powers that the Scottish Government has in introducing a basic income system are, one, the interaction with tax credits or universal credit as will be or is being rolled out because the Scottish Government doesn't have control over the rates of tax credits or the way it's administered. You would have to have a semi-basic income where income from tax credits was counted towards your basic income, and people who received the tax credits wouldn't get much in the way of basic income, which is a real clutch, but it's forced on you in a way by the current set of devolved powers that you had. If you had more devolved powers, you'd be able to introduce the system more easily. The other issue on the tax side in terms of financing it is that most of the proposals that I've seen, and I think that Donald mentioned this, involve abolishing the personal allowance for income tax or at least restricting it. As I understand it, the Scottish Government doesn't currently have the power to do that, so what you'd have to do instead is have a bigger increase in the basic rate of income tax above the personal allowance to compensate, which isn't ideal because of the high marginal rates. Given your current set of powers, there isn't much of any other way that you could really do it. I think that it's important that if a pilot is going to be carried out that it's done properly, and that means that you really have to know what questions you want the answers to before you start and make sure that you gather information that is going to answer it. I endorse the points made about the source of finance that, really, if you're going to have a proper experiment, you have to experiment with the sources of finance, not just with the basic income. Also, there has to be a proper basic income scheme, not just a minimum guarantee, which is what the Holland ones are. They're just topping up to a particular level. They're not experimenting with different levels of basic income, sorry, with all people in the—it's not properly universal, so that often it's not given to people who are wealthier. Also, one ought to experiment with different levels of basic income so that you can see what the effect is of different levels, not just one minimum level. One of the problems is that if it's voluntary, how do you encourage wealthier people to get on the scheme if they're going to actually be penalised, which some of the schemes would expect them to be, unless you actually have a mandatory scheme? That could be a bit difficult. Finally, when the pilot is finished, the people who've enjoyed the experience of the basic income are going to have to come off, so they're going to need support in doing this. I think that you need support at the beginning and the end, because to begin with, you have to explain to them what it's about, what you're hoping to find out, so that they really understand it and take it on to themselves and embrace it. However, coming off is also important, because people could then feel quite deprived of it afterwards. I'd like to ask—obviously, a basic income would require a shift in attitude, certainly from some people, more than others. Mr Reid, in your report, an idea whose time has come, you state that, although the current punitive model starts by believing the worst in people, that they're lazy and feckless, a UBI is based on a belief in the best of people that they want to and can contribute in a huge variety of ways and will flourish into so much more than worker ants and turbo consumers. I'd like to hear from you, perhaps the others, about how a citizen's income would enable people to participate more fully in society, to contribute in ways that perhaps they can at the moment? Certainly. The main point is that in theory, the current social security or welfare regime is designed to encourage people to work where they can and is in theory designed to deliver an acceptable level of support for people who can't work. In practice, especially given the current sanctions regime, which the Government gets DWP to implement, it doesn't really do that. A lot of people get thrown off benefit for no real reason, just because they've attended an appointment five minutes late or whatever. The film, I, Daniel Blake, is very good on showing the kind of sadistic nature of the current system. What I think basic income gives us a chance to do is to move away from all that and say we're going to pay everybody a certain amount of money, might not be a huge amount of money as you initially phase in the system, but it gives you a chance to kind of, and there's no strings attached to that, and it gives you a chance to, if you want to try a hand at setting up a business or you want to pursue caring activities, artistic activities, all kinds of things. I mean, it's not, it wouldn't be a big enough sum to completely set most people free from the need to kind of carry on looking for work to sort of top up your incomes, but it would give you, it would give people some means of kind of unshackling themselves at least to a limited extent from this kind of worker ant model, as I think we called it in the report that I did with Stuart Lansley for Compass, and it's just the possibility of doing that, I think, is really quite exciting. I mean, if you look at the overall distribution of national income in the UK, politicians seem to have focused on the idea that nobody should get something for nothing and everybody should have to kind of work for all the income they receive, but in fact, only about 50% or 55% of national income is wages, the rest is paid out as mainly payments to capital, you know, dividends, and people don't directly do anything to receive those dividends, they just happen to be in possession of shares or what have you that enable them to get those, and so what basic income is saying really is that we've already got the idea in the system that you don't have to, not all the payments to everybody need to be linked to work, so let's kind of democratise that a bit more and equalise it a bit more, so rather than dividends going to, you know, overwhelmingly to people at the top of the distribution, let's have a payment that goes at a flat rate to everybody, and I think that that is the key thing really about the system, the exciting thing about it. He came at it in reform Scotland from the perspective of growing Scotland's economy and what could be done with the social security system in order to maximise the prospects. We saw basic income guarantee as a vehicle to increase entrepreneurship, to remove barriers to risk for people, as a potential to encourage people to retrain, for example, but individuals are more likely to do that if they've got a basic income coming in, and also to recognise some of the new realities in the workforce with the so-called gig economy, seasonal work, et cetera. Obviously, one way of looking at that is that you have to regulate the labour market and get rid of that flexibility because it's not good for workers. Another way to look at it is that, actually, the world is changing, that you are likely to have people coming in and out of work at different times. The current system penalises that, but the system that we've put forward would not penalise it at all, so it would be entirely possible to say that it would work a week or two here or there or work during the summer or during the winter. I think that we believe that it would benefit businesses and individuals and empower them. The current system has been very good at moving people from out-of-work poverty to in-work poverty, not beyond that point. That might be a win in and of itself, but we don't think that's sufficient in terms of the comprehensive intervention in welfare and social assistance institutions. The world of work has changed already. The type of work that has been created since the financial crash has almost exclusively been self-employed, zero hours, part-time, variable, flexible, and this is a structural change to labour force. Alongside that, we've built this incredibly complex and interfering bureaucracy, not just with individuals but with businesses as well. If you're a self-employed person, you have to answer to the Job Center Plus if you're on a low income. If you speak to major companies who employ a lot of flexible workers or self-employed workers, ask them how many calls they get from the DWP to check up on people and what they're doing. The basic income model, by contrast, is designed to give this fundamental level of security for all. That is a different type of conversation. The attitudinal question that was asked starts from a different standpoint. It's not what can we do about welfare, it's how can we enable people to adapt and cope in a rapidly changing world of work with multiple responsibilities. We need to start having that broader conversation in Scotland and beyond about the type of contribution that a basic income can make. If I just make one more, one more very brief point, be careful about these models. There have been called propositions and proposals, they're not, they're just models to illustrate how it might work, and a lot of them are based on the assumption that we go to bed one night under this system, switch the lights off, we switch the lights back on in the morning and we've got a new system in place and it's all funded by income tax, but that's not the reality of how tax and welfare changes. The tax and welfare changes that we've seen over the last 10 years have been to attune a £45 billion of corporation tax, personal allowance is changing and so on over a long period of time, so treat all these models with caution. They're all legacy, they're all based on 2012, 2013, 2014, the 2019 system is going to be very different. The only purpose that they serve is to show that it could be practical and imaginable, as long as you get to that point that you can start to get into the broader conversation about the big benefits that basic income can offer. The initial question was about would people contribute automatically and the concept of reciprocity says that people ought to respond. If they get a basic income, they should respond through working, caring and so on, but reciprocity is a two-way street and it shouldn't be that the individual contributes first and then the state responds. If the state contributes first, it can engender such a feeling of gratitude to a state which is helping them, that people will want to respond to that. Not only that, people do want to work. All the evidence shows that they would like to work not just for the earnings but for the social and health benefits that they get from being seen as someone who contributes to society, so I don't think there's going to be any worry about people not wanting to work if the wage rates are high enough at the moment where the means-tested benefits, people can end up working for 30 pence an hour and that is well below most people's reservation wage. If you get rid of the means-tested benefits so that people are facing a net wage rate that is realistic, I think that you will find people responding, people in this country at natives responding in a positive way. I would also like to point out that the current system is very much based on men's working lives. It doesn't meet women's needs at all. The fact that it's based on the couple and not on the individual, that it penalises cohabiting couples as opposed to other people sharing accommodation and all of these are very much against women's interests and the basic income would very much fulfil those. It would free up women to lead the sorts of lives they want but also it would free up men to live the sorts of lives that they want and I think that's probably enough for the moment. Professor Harris. First of all, it's perfectly reasonable to want a system that enables people more that is less punitive than in I Daniel Blake. I think that that's possible in other ways than through universal basic income and I think that if you look at every survey of social attitudes it could be highly counterproductive to say that you can get something that is at some level enough to live on without any conditionality if just 10 per cent of people decide not to work. That's going to create, if 1 per cent, that's going to create outrage in terms of public opinion. You could make the system, the sanctions, less severe and you could reconfigure conditionality with a reciprocity ideal without saying there's no condition at all. What I think is really interesting in this is that the point about the sort of gig economy and people's unstable lives is very valid but there is more than one way to do this and I know that as Anthony said, as Howard said, Anthony said that this is just illustrative. The fact is that every attempt to cost this is showing that there would have to be a huge, huge redistribution of resources. Now if you imagine that amount of money in the system and what else you could do with it, one of the things you could do is to take say the universal credit system and hugely increase the work allowance which is the level at which you start to lose your benefits. You could do that within the present system. It would be different because there would still be some conditionality and they would be withdrawn when they are withdrawn more quickly but that would actually have a similar result in terms of people being able to go in and out of temporary, part-time, casual work with actually no change in what they get from the state whereas under the systems that are being proposed you would lose 40 per cent from the first pound that you earn and so I do think that one has to think very carefully not just about well wouldn't this system be better than what we've got but would it be better than what we could have with the same redistribution of resources or the same amount of additional taxation. Ruth Maguire, do you want to come in on that? Just a very quick supplementary convener. I was just in terms of people reducing the reverse for caring responsibilities and at the moment there is a disproportionate number of women who are caring for children or family members. I would just be interested to hear the panel's reflections on whether they think there would be a reduction of women in the workforce under universal income. I think that with a basic income you're going to have redistribution in many ways. You're going to have a redistribution from paid work to unpaid work but it allows men to take those opportunities as well that you could get a reduction in the standard working week and it could be easier for couples to share their care work and the paid work and I see it being a very refreshing and rejuvenating period when it happens. I think that there's a book drew out this week by Dutchman which suggests that some form of basic income could redistribute work over lifetime and so you could have people working fewer hours but for longer. If you work 20, 30 hours a week in your 30s, 40s maybe when you've got children but then you're actually working for longer and there is evidence to show that a lot of people want to continue working for longer but the current system disincentivises it that you're either retired or you're working too hard. I think that looking at it from that point of view that basic income could have that effect of redistributing for both genders and I would concur with what Annie Miller says that it could actually make things easier for both men and women and make things more equal. Mr Pinter, you wanted to come in and in. Very brief point, I think that's entirely right. Work could be distributed more flexibly and of course part of the rules of the game in things like carers allowance is you have to care for a certain amount a week in order to get the carers allowance. You wouldn't have to do that on a basic income. You might be able to work a couple of days a week without penalty. The point is that it would be up to you how much you work. Of course there are deeper structural issues at play here and societally we have to have those conversations as well, this is not the only conversation in town. Ferson, do you want to come in the back of that? Just on a few points for my computer. Obviously we're speaking in a very conceptual manner this morning and I thought that was very interesting what Professor Hurst said about you could think at other models and considering costs, but I just wanted to pick up on a few points. First of all on Mothers, your point about expanding the workforce that came through in previous answers and also in the written submission is very interesting to me and I wondered if there are any other elements to that that you would like to expand on because that is perhaps contrary to some of the other perspectives on this issue that it might contract the workforce. Secondly, if I may, Anthony Painter, you spoke in another material that the RSA has produced that you've been part of. You've talked about how the potential of a basic income has the potential to create greater security, simplicity and freedom. You touched on creativity earlier and please do expand on that if there's more you'd like to say, but also the freedom to make more of a difference and whether if you could maybe expand on how individuals having more time could allow them to contribute more perhaps on a social basis as well as an economic one. I think I'll leave it at that just now. Who wants to come in first? I think that your first question was directly addressed to me about expanding the workforce. I think that it comes down to the view of human nature. I perhaps have a more optimistic view of human nature and I think that actually people do want to work, that they want to be a valued part of society. We believe that a basic income could actually up participation rates in the workforce and it comes down to our overall view of trying to grow Scotland's economy. One of the things that we need to do is to grow participation in that workforce. We believe that the system that we've put forward and I think that we've admitted that all of the actual models are just models in their conceptual. The one that we've used is actually based on the Greens citizens income model. Who knows what it would actually look like at the end of the day but one of the things that it fundamentally would have to do is to change that marginal tax rate problem. If you have a basic income that people can work for 10 hours a week, 20, 30, 40 hours a week and that they would not be penalised for it and one of the problems at the moment is that, as soon as you take on a job at a low rate, it's just not worth your while. It's about a fundamental optimistic view of human nature and the state being an enabler for people to live fulfilling lives. Does this optimisation play a role in that consideration as well? Yes, absolutely. One of the things that I fundamentally believe is that most politicians, most of society think that we're looking at fundamental change maybe 20 years down the line with optimisation and having to potentially look at it then. I think that we're looking at a shorter timescale than that. Five to ten years, you're going to have quite significant changes in society and that we will have to organise ourselves, the welfare system, the work system within that sort of timeframe. That means that we need to be looking at it now and it's therefore appropriate to at least look at pilots and to think about how that would happen because I think that change is coming faster than we think. It appears that you wanted to come in on that particular point. I mean the answer to your question about creativity. I mean our strong conviction, I think it's backed up by research, is security and creativity go hand in hand. In order to take a risk like setting up a business, trying a new idea, you have to have an ability not to fall right to the ground. There has to be something catching you in case you fall. That's why we find, for example, self-employed people are more like to have wealth and assets behind them even if their incomes are low because they've been able to take that chance. Basic income doesn't transform things in this regard but it gives you just a bit of a wedge of freedom, a wedge of freedom that allows you to have the security to create and try things out. The broader question about caring and contribution in society I think is an absolutely critical one and why I think basic income is different is because it would be for a different purpose. The universal credit and you can tinker with work allowances and marginal reduction rates and all these things. It is still just, you know, digits on the pay slip. It doesn't have a lot of meaning other than a bit of a supplement to your cash and that's kind of what it is. Basic income you'd look to construct a story and narrative and communication about what it was for. It would be for a purpose. This is to support you to make a wide range of contributions. Economists call something about the flypaper effect. If you purpose a cash sum for a particular end then it's very likely that people use it for that end. So you have to have a conversation about basic income and what it's for and one of the things you will say is it is to help you make the range of contributions, caring, setting up a business, working and you will set up a whole series of social and civic institutions actually in and around that. It's not just basic income alone. We have enormous care needs not just disabilities and mental health but obviously an ageing society as well, which you have to have a very deep thought about how we care for those in need as society ages. It's not all going to be the state that does it. The state does have to put its hands in its pockets a bit more collectively. We have to invest more in social care but we're going to have to take more responsibility of ourselves as well. So what are the things that we can do alongside a basic income to facilitate that sort of caring so we can meet our collective needs as a society, so creativity, caring and security together? Annabelle, you wanted to come in on that one. Just to follow up something I think Donald said that most of the schemes put forward get rid of the personal allowance completely but this doesn't have to be so. One could have a smaller personal allowance. At the moment the personal allowance every time it increases it increases those on the highest tax rates more than anybody else. It's progressive. I'd also like to point out that about a generation ago it used to be married women who helped to provide the support in the community for caring not just for their own children but generally. Now because they are mainly at work it's the elderly people. If you look at elderly people's lives they are the ones who are doing the social activities supporting the community. I myself have a basic income it's called a pension and I'm working harder now than I have for many years so we don't all just give up and shrivel. About the work situation first of all if you have a decent basic income which is higher than the current job seekers allowance for instance then if it's in a multi-deprived area it's going to inject a whole lot of income into that area and it could regenerate it and then you'll find that businesses move in and people set up their own businesses and so on so it could have a really transformative effect and we have to recognise that if you do have a basic income wage rates are going to change that nice jobs the wage rates will fall, nasty jobs people the wage rates will have to increase there's going to be a change there and having the financial security that is probably the most important aspect of this giving people financial security and giving them some control over their own lives are the two important most important aspects and as I said before it's going to help self-employed people it's going to help small businesses because they will have some security which they don't get at the moment workers cooperatives have difficulty getting loans from banks will have that sort of security you could find a whole lot of regeneration in the economy happening as a result of this Alison Johnson it was your question that originally and both were sups did you want to come back in because I know that Polly meet you wanted my second question really was how a citizen's income might be a response to some of the challenges around the zero air contract automation and so on and I think the panel have all touched on that convener thank you did you want to come in on that specific there well I do have a question oh you skip to the queue all right no no no it's it's Margaret from that okay thanks convener there seem to be a broad range of supportive voices for basic income right across the political spectrum from from left to right and I would say there have been different motivations across that spectrum as well and perhaps we'd like to hear what your own personal viewers of the the issue that a citizen's income solves because for a lot of different people that issues is different this is read yeah well I think there are at least two issues for me that a basic income addresses one is the that it provides a genuine kind of social safety net albeit a reasonably a relatively low level in in a lot of the schemes that have been suggested between you know 70 to 100 pounds a week but it would certainly if that was an unconditional payment it would certainly be enough to stop people having to use food banks and maybe reduce reliance on kind of nefarious sources of short-term support like payday lenders so I think that is actually a very powerful that's actually a very powerful reason for bringing it in given that the current safety net is so full of holes with the sanction system and you know the way that so many people are kind of subsisting on nothing for kind of long periods of time often through no no fault of their own so that's that that's one useful aspect of it and the other thing as I say is I touched on this in my response to um Alison Johnston's question it it gets us away from the idea that um all there is to a kind of working working age person's existence is this kind of drudgery of labour and existence as a a work around where you have to take any kind of low paid job that's that's going just to survive and in many cases not enough to survive as Anthony said in work poverty is an increasing problem in the modern economy citizens income I think starts to move us away from that and starts to move us towards a different conception of what life should be about so that they're the kind of two main things I think that are exciting for me as you say there are a range of um there are a range of voices calling for citizens income across the political spectrum some of the voices further out on the right like the Adam Smith Institute for example I'm suspicious of because I believe that they are advocating citizens income as an excuse to destroy the current welfare state I mean some of it is in the process of being destroyed already um a lot of the social security system for example but a lot of people at the ASI are advocating citizens income as a replacement for the NHS as a replacement for state education and I should be very clear that that that is not a view that I subscribe to I think we have to have well resourced and well funded public services in areas like health education and social care alongside citizens income they're not they're two aspects of the system they're not substitutes for one another so I think that that kind of conception of citizens income should be rejected yeah if I could start by disagreeing with a point that Howard just made which is that food banks would disappear if people were guaranteed 72 pounds a week I think a lot of people who go to food banks do so not because they've been sanctioned but because the inadequacies of our present safety net um and which ends them in debt and you know they might not have any income this week yeah and that's it's an important point because of because of what's behind the question which is that the left and the right have different ideas about this I mean we tend to focus a lot because it's so difficult to do the numbers on on on sort of structural issues how we should restructure things but the the risk is that um that it becomes a kind of here's some money go away I mean certainly the American rights see it that way the American rights see it as well let's dismantle all wealth all pro all public programs and give people a small amount of money and so so they don't starve and so the level is very important for that reason and the motives as you say are very important um and um because the numbers look scary there has been a tendency for people to use our present social security levels as the starting point and it could well be that um even though that wouldn't make things worse for people it might sort of reduce the pressure to improve because you say well you've got this unconditional amount that's enough I mean I'm not you know I'm not trying to say that's the reason not to do it but it's a reason to face up to the fact that it needs to be the ultimate goal needs to be something where you would be willing to have very high tax rates because if you didn't then you'd end up with something which was where a lot of people would be worse off than they are now and in fact you know some of the calculations have already got that in it so for example um the reform Scotland um reform reform Scotland um proposal in order to be able to say that um that you wouldn't be worse a single person wouldn't be worse off until they were um until they were at an average income it sort of sets the rate at 100 pounds for a single person but then compared to some other things the some other proposals to compensate for that and not make it too expensive the child rate is set at 50 pounds which is considerably less than a child that is given in respect to a child at present so you can it has some families under that system who would be on out of work benefits who would be worse off not not all but some and it is very difficult it is really very difficult balance to get and all I would say is that if you're going to pursue this idea then be very careful not to sort of in order to make the numbers not too scary you end up with some people actually worse off than they are now who are not very good incomes I think I've already mentioned that one of our motivations for looking at this basic income was part of our work in looking at ways to grow Scotland's economy and we believe that it could be a key tool in doing that and one of the things that became very apparent to us in looking at it was the prospects for improving administrative simplicity both the the old system and universal credit are immensely complex and expensive to to administer one of the beauties of the basic income would be that it's it's very simple to administer and deliver and then of course there's the element of changing the relationship between the individual and the state and empowering people to have control over their own their own lives and another motivation that yet that we looked at as well is adapting to societal change and I think that there's a real appetite in Scotland to say right okay we've got substantial powers now we're getting more powers what can we do with these powers to actually adapt to to change that is that that is happening and I think that that is a valid point as well and something that basic income could be more flexible in a changing society. Annie Milley wants to come in. About the political spectrum I agree with everybody's what they say about the fears of extreme right groups wanting to do away with the welfare state and I think we should fight against that with all our being I think Brits would be very unwilling to give up these services which they rely on so heavily the NHS is very popular it's universal and inclusive. I think that if you look at the major objectives that a basic income could help to fulfil there are very few that people would actually disagree with for instance to actually value individuals for their own sake to give them financial privacy and autonomy and emancipate them to give them choices in their life to prevent or at least reduce income poverty and give them financial security to redistribute income and heal our divided society eventually creating a more united and inclusive one to restore the incentive to work for pay which should help to lead to labour market efficiency and to simplify the administration of the social security system. I think while I come from a left-wing perspective other people might disagree with me about the amount of redistribution but I think even centre-right people would realise that inequality at the extent we have it is actually bad for our society and undermined democracy and so people might disagree with whether a benefit is too generous or too mean but I don't think one necessarily has to disagree with the actual system itself. All the other things I mean a right-wing person might say they want to reduce poverty after the event whereas I want to prevent it before it happens and the damage is done. I'm putting words into people's mouths so I realise but this is how I see the world. So I think that people who advocate basic income it does appeal for both left to right, the equity appeals to the left, the efficiency and the choice appeal to right-wing people. We have a lot in common that we can talk about, it doesn't have to be divisive. Mr Peen, do you want to come in? I think the lesson here is don't let it be introduced by the American libertarian right, make sure it's introduced from a more communitarian and public spirited standpoint that goes across the political spectrum. So that's important but I've already mentioned a point about security but I want to talk about marginalisation because I think this is an increasing problem in our society where there is a group of people who are in this precarious position that are oscillating between out of work and in work benefits, in work and out of work and poverty and I think universal basic income is a clear statement that actually there aren't two types of people in this society, there's one type of person and that type of person has the support of citizenship that will enable them to flourish and I think that is a very different political conversation and dialogue which I think has appeal again across the political spectrum this notion of sort of one nation if you'd like for one to want one to want of a better phrase. One very brief point on the transition and and the losses. This is why the points that Howard Donald and all the panel made about connecting institutions is so important. You keep healthcare in place of course you would disability, housing, childcare would still need to be kept in place. You need to watch the losses and I think that the note of caution that Donald sounds is an important one. We have transition between different types of system before, we transition the pension system from one that was based more around tax credits, pensions credits to one that's more centered around the basic state pension. Again we did it over and we are still doing it over eight or nine years so there are a number of transitionary elements to this that can be important and incidentally the national living wage changes the discussion somewhat. No one apart from ourselves to my knowledge has looked at the impact of national living wage on the losses between a basic income and a current system. The national living wage accelerates you through lower earnings quicker which mitigates any losses and maybe eliminates them for a great number of people. For example we looked at a lone parent family with one child using our illustrative model and on 20 hours a week on national living wage they would in fact make a gain on the basic income system in our model compared with the current system. Matt Griffin, do you want to come back in again? Ben Macpherson, do you want to have a small supplementary in that particular part? Thank you, convener, but Anthony Painter has actually touched on that of all the points I was going to raise. Thank you very much, Adam Talkins. Thank you very much. I mean it's absolutely fascinating and one of the things that is quite striking to me is I think the very first thing that Anthony Painter said that you know you can't do this properly unless you have a full range of powers and Annie Miller said that you know even in designing pilots it's incredibly important to design them properly so that you know clearly what it is you are trying to test. It is very good practice to know what the answer is before or at least to know what the answer is that you're looking for before you ask the question. With that in mind, one of the areas of this I find most foggy is exactly what's going on in Fife and in Glasgow by way of pilot projects because if we in the Scottish Parliament don't have all of the powers to implement this across Scotland then surely local authorities in Scotland don't have the powers to implement it across the piece either so can the panel help us understand exactly what is and is not being piloted in Fife and or in Glasgow are they two experiments looking at the same thing are they two different experiments looking at different things what kind of state of readiness are they in I mean I think that we all know that these experiments are underway or about to become underway but I don't think any of us knows certainly I don't know anything about the content that is likely to be poured into them so anything you can you can do just to kind of peel away some of the layers of the fog and help us understand that a little bit more clearly would be very helpful. I haven't been involved in in developing this I was invited to an initial meeting and I've been in touch with Paul Vaughan who is the main person who is putting this together. I spoke to him recently and he said that it's a long-term project it's still very much early days and they have to make contact with the DWP, HMRC, the Treasury, the Scottish Government and they have to get these players in place before they can go ahead. Paul is trying to for the Fife pilot is trying to get a prospectus ready after the council elections he said so we're not at the stage of deciding what the levels will be or even what the questions are there's still a lot of ground work to do before we can get to that stage I'm not sure I imagine that Glasgow is in a similar situation this is a long-term project it can't just happen immediately it would be early next year at the earliest it could start. I think that at the early stages of understanding the feasibility of of an experiment and in the paper I submitted a committee that had distinguished between sort of experiment and pilots and I think there's an important distinction there they will need the support of this this this parliament or the Scottish Government I think to do it do it properly. However I think there are some clear questions that can be tested hypotheses that can be tested through a Glasgow or Fife experiment we can look at the impacts on participation in the labour market over a two or three year period you could look at the impacts on health mental health and family well-being and there's a number of sort of connected measures that for example the pilots into universal credit have looked at or and various other sort of interventions that have connected different different data sets. I think you could look at how basic income would sit alongside other systems within the welfare state such as disability and housing and I think there is a way of bypassing the universal credit system incidentally and I've laid out how that might work in the paper that I've submitted. I think finally in terms of the answers that you you'd seek to address I think you want to generate a public conversation about this this is a massive and I think by doing the experiment both locally and nationally you will generate that conversation I think that in and of itself is is is is a useful endeavour and objective. So one message do you want to come in on that particular when the supplementary information on how either Fife or Glasgow will operate? What's already been said is that what I understand the situation is. Have any of you been involved in the development of the proposals to experiment or to pilot in Fife or Glasgow? RSA Scotland has had on-going conversations with Glasgow City Council yet. Right but nobody else. Interesting, thank you. Mark Griffin do you want to come in on supplementary that one? A small point, Annie Miller touched on earlier just about the value of the pilot and answers that would get just to ask members of the panel what their view is on the scale of the pilot and just how big that scale would have to be to get meaningful analysis from. In preparation for this committee we we spoke with a whole range of people who are involved in experiments across the world currently. So we spoke with people close to involved with the Ontario pilot experiment with the Oakland experiment in California. There's a give directly scheme that is currently operational in Kenya and of course Finland as well and a number of academic experts in the round out and the sense was that you could get meaningful and statistically significant data on a sample size of participation of a thousand plus. Now you need to think about the people that would leave the experiment during the course of six it's two or three years people move away circumstances change so on and so forth but as long as you can get that you can test some of the measures and you'll get statistically significant results from from that pilot so you can do it at quite a small scale. Now it doesn't say that you will then have an implementation ready scheme of basic income at the end of that but you will have been able to test some of the key benefits and criticisms of basic income through that process. Yes, thank you convener. I'm just wondering about some of the issues I think that were raised at the start and the question of would this work or what effect would a universal income scheme have on people's attitudes or conduct. If we look across Europe there are other countries where the social inequality is perhaps not as great as in this country or in parts of the United Kingdom but it's not necessarily because benefits paid out are higher but then of course it's a much more complex picture because there's very different taxation structures income tax so there's so many factors play into that and I'm just wondering and I think this point was touched on by Professor Hirsh so he may wish to respond and perhaps others but is it possible to know what effect having a universal income system will have on attitudes to work, willingness to work, other than making the general comments that it's not going to affect but you know lots of people will want to work regardless of the type of system that is set up whether it's this type of system or different type of system without actually putting a system in place and then how many years would one have to wait to see to say is it working or what effect is it having on people's attitudes, how is it functioning, is it 5, 10, 15, 20 years so the first question is is it possible actually to know what impact this would have without actually implementing the system because models are useful a useful tool but I think it's already been touched on they have their limitations and second what sort of time period would members of the panel envisage this we'd have to run for before we could say this is working or not working so perhaps first of all Professor Hirsh. Well I mean if what's being done in Finland is perhaps a useful thing to consider which is that I believe 2000 people who who are already on benefits I believe long-term benefits not working are being allowed to keep those benefits unconditionally for a period I think it's two years and what that sort of thing does is I think it's useful this distinction between experiment and pilot I mean it is an experiment it is an experiment which tests one particular thing and that particular thing is if you allow people to keep their benefits and they're already unemployed will they do some work in other words is it is a thing which is holding them back from work something other than just the lack of suitable employment and that's a useful thing to know and I think that that is a relatively straightforward thing to have an experiment about but it is as you're suggesting only a part of the picture in at least three ways one is that it it only looks at what the effect is on people who are present unemployed rather than the people who are working perhaps alongside them who haven't been unemployed so it's not it's not a citizen's income it's a benefit run on in other words it's for people who are already in a certain situation a second is the point I made at the beginning which is that it's quite difficult to simulate the the actual tax regime that you will be under and so yes it would in principle be possible as Anne was suggesting to to actually say well this would cost this much and therefore we're going to tax those people at this rate I think that would be quite difficult to do in this circumstance and the third one which I think is a bigger philosophical point which I think you're referring to which is which is sort of what how does it affect people's attitudes generally how do I mean are you going to have an experiment that looks at the attitude of the public to to the fact that people are getting this and that is quite difficult when it isn't the whole system it isn't a change in society so I would be very cautious about thinking of these things anyway as a pilot of citizen's income rather than as an experiment in one aspect one particular narrow aspect which is are people being held back from from doing casual work because it's so difficult to sort of move off benefits and as I suggested at the beginning there are other questions that that could answer which is should you perhaps have a higher disregard of income within the present system there I think you have to you have to run to get reliable evidence somewhat about what a basic income would do to people's work decisions or their wider life choices more generally you have to run a pilot I don't think you can do it a priori because there are simply too many variables to this now I'm somebody who works on micro simulation models to show what the impact on work decisions of say you know increasing benefits in the existing system or cutting tax will be but they are marginal changes so you know you say we cut income tax for 20 from 20% to 19% what's the impact on life supply when you're introducing a basic income a completely different type of system albeit one which may retain some some elements of the system alongside it it's very difficult to say a priori well impossible in my view to say a priori what the what the impacts will be there is some evidence from programmes in other countries but a lot of the evidence on actual basic income pilots is quite old many of the pilots were done in the 1970s and you know I don't think it's very sensible to make judgments about the current Scottish labour market based on the labour market in the US in 1975 because I just don't think that's a I mean it's interesting work but it's quite old now so I think there has to be a pilot it has to be ideally you would have to kind of randomise people into the pilot so that you'd take an area and then some people would be randomly selected to receive basic income and other people wouldn't that gives rise to certain issues if you've got a couple you'd probably have to randomise them both in because otherwise you're not you're not modelling something that would exist in the actual system if it was rolled out fully you wouldn't have a system where you know the husband got a basic income and the wife didn't for example so you'd have to have some it'd have to be a kind of controlled randomisation in that sense and the sample size as Anthony says you can get meaningful statistics off a sample size of a thousand uh for you know if you look at the impact on labour supply for the whole sample but once you start to break it down so once you go in by gender by age group etc you I think you'd need a bigger sample of a few thousand to really get useful impacts basically the more you want to drill down into subcategories of people by family type by income level uh by age the more you need a bigger sample basically so yeah you would need some kind of pilot I think you can't just do this based on um micro simulation based on what we have at the moment mr pin you wanted to come in then do you want to move yeah I think that's I think that's right where the legacy data is is useful in in is just in hinting on what some of the impacts would be and given some reassurance that the boss is not going to fall out of the jobs market you know and I think that the dolphin manitoba data is useful and what it showed is there were there were two groups that tended to withdraw from from the labour market one was women with very young children and bear in mind it's you've got to think about what the welfare system of Canada was in 1970s and the second was sort of young men late teens and older who stayed in education for longer and I'd argue those are both socially beneficial withdrawals potentially now the working men tended to withdraw a little in terms of ours but there was no evidence of complete withdrawal from the labour market at all so I think that can reassure that you can ethically do an experiment and I think what you would look to do I think you would look at a particular geographical area because you've got to think about the other systems of support that have sit sit alongside it so you might do it in a Glasgow 5 or wherever it may be you would want to have labour market support alongside it so it wouldn't just be here you are you get your your basic income we'll come back and talk to you in two or three years I think you want to think about the types of systems of support that you'd want in place if the basic income were to ever be introduced in in Scotland so you'd have to have that element of it as well and I think you'd probably focus on on an age group rather than a cohort of you know at the out of work or something like that I would take a sort of 18 34 year olds maybe excluding university students because you can't really test the labour market impacts of that particularly and you would ask people to volunteer to be participants in a trial some will be randomised into the control group some will be randomised into what's sort of called the treatment group you may go for one or two thousand depending on what you want to do I think you get some useful data to reassure you as to the hypotheses of what a pilot might look like going forward I think it's clear that there have been and will be several pilots throughout the world but actually we don't know that much they have been small they have been scattered if Scotland wants to look at it seriously we're going to have to do a fair bit of heavy lifting ourselves and design good systems but whether those be in Fife and Glasgow or elsewhere to actually get the sort of knowledge that that that we want I totally accept what's being said about statistical models and numbers etc and yes on a thousand over two or three years there are some things it will tell us but actually potentially two to three years isn't long enough to have you know lasting you know sort of behavioural and attitudinal changes we can't necessarily test everything in a model that that we would do but I think the core point I would make is we have to actually look at it in Scotland ourselves in the here and now rather than relying on data from other countries some time ago I would say that two years is probably the optimum amount our colleague Guy Standing who is involved in two pilots in Namibia and in India warns that after two years the team gets fatigued it also delays when you can get the results and two years is sufficient to to get results one of the problems in our society is that people may want to work but are the jobs for them and we find people applying for jobs and it may be one in a hundred that gets in it gets in so we mustn't just think of the labour supply but think of labour demand as well but the current system doesn't really cope with the unemployment system if you've got people on zero hours contract are they employed or unemployed do they get benefit or not and a basic income system would cope with any future system we don't know whether automation is going to completely get rid of jobs or just have jobs for high school people and a basic income scheme would cope with any eventuality far better than the current system but also I'd like to emphasise that we shouldn't just be looking at labour supply issues there are other issues about poverty about health about women's independence at the moment the current system penalises couples by giving them less than other other people sharing accommodation get being based on an individual is going to be really emancipatory for a lot of women who have to don't have access to any income at the moment if their husbands are wealthy and they don't have any income and they're not entitled legally to their husband's income then this would emancipate them and give them some choice of their own some women only have their child benefit on which to feed themselves and their children so it really is emancipatory and I hope we're going to look at these other issues not just at work related issues thank you thank you very much Pauline McNeill you want to come in yeah thanks um yeah I know that guy standing gave a lecture recently in Glasgow and he talked about um the build work group where there was a presentation so this is a meeting of all the great and the good the basically the biggest companies banks in the world so they're obviously so he made a presentation I understand on on the idea of a citizen's income so I guess it's been taken seriously but what I'm struggling with and I'd like someone to talk me through this is let's assume that Scotland had all the benefits all the powers where do you start from because um annie miller made a number of statements about um so wage rates would have to change I mean I did did take a step back at some of the things you've been saying to be honest um as I need someone to talk me through then if this was you know we were beginning to plan a system now what is that what are the implications for everyone and what are the implications for those who are in work because from what you're saying this can really only work if well you've said change the wage rates and there must be massive tax implications I mean I'm just having difficulty I mean because it's an idea I'd like to support where what is this going to look like or do you all have different versions of what it would look like is that the problem can someone give me one well can I start with annie miller's you are named so I'll start with annie and then Professor Hersch the definition of a basic income is being individual universal non-selective and unconditional it defines a system but it doesn't give you enough information to actually design a system and there are a whole lot of secondary objectives that you can use to design the the actual system like should pensioners get more than working age people should the young adults get the same as the working age adults and should there be personal allowance or not a smaller one at the moment there are all sorts of questions like this which would have to be considered but it really depends on what your objectives are in bringing about the system implementation is important for instance it could start off small we could have small amounts of basic income for everyone maybe even just as little as 40 pounds a week each embedded in the current system and people could get used to it like that and see whether they like it whether it makes a difference to them and then you could increase it so that it gets to the same level as the current means tested benefit level system and if people still like it we recognise that the levels for working age adults are far too low 73 pounds 10 pence a week isn't enough for an adult to live on even with housing benefit which is extra and so we could increase it to the 100 pounds that reform scotland advocate but even then we are not up to the everyone would get that payment every patient or every working person would get the same amount what i notice is that pensions at the moment probably get sufficient and where the current child benefit and the child tax credit children are probably well served but it's the working age adult that is not well served and they're below poverty level benefits and i note that we are below what the EU official poverty benchmark is which is should be 0.6 of median equalised household income and that would give a couple that's not based on the household at the moment it would give a couple 242 pounds together or 144 the first adult in the household and 100 odd for the second adult so we're well below the poverty levels at the moment and i think it's bad that we do treat our people so so badly in this respect and so let's talk about implementation and about designing the system and that's where the politicians have to get together to decide what they want to actually achieve and what scheme they will adopt even though it's not there isn't a lot to be said for us of getting too hung up on any one model what struck me is is actually that when people have tried to even broadly cost this they've come to broadly similar conclusions and so i think we can answer your question by describing broadly what it would look like when at the point at which you a citizen's income were at least the level of of the present safety net benefits and yes you could start with a small smaller amount but since the idea is to is to reduce means testing and to create simplification having an additional very small thing doesn't really do that you need to think about where it is you're you're heading for and i think that the broad characteristics of this as everybody's described is first of all yes people would get everybody would get this unconditional payment and then broadly speaking you'd raise that money through through income tax with with national insurance and income tax being merged and in the as we've said that often sort of starting to tax people at a rate of about 40% from the first pound of their of their income of their earned income not the citizen's income itself so you'd get your citizen's income and then you'd is the starting point for introducing a citizen's income is that even if you started at the level of a safety net if you like of what everyone or the top rate of benefits is that to implement it you would start with merging national insurance and tax and uh and introduce a rate of 40 percent in broad terms i'm struck by how many how many versions come to broadly that conclusion so that you'd get your 70 if you were a single person you get your 72 pounds a week and then for the first pound that you earned you'd pay 40p on it and you'd you'd continue to pay 40 percent and then when you got to the higher rate you'd be paying 60 percent because the the proposals to finance this also involve abolishing i mean continuing to pay national the national insurance rate at the moment you pay 42 percent when you're at the higher rate tax because if a 40 plus a reduced national insurance rate that would go up to 60 percent because he wouldn't have to reduce to one so i think that in describing what what it's that these models are setting out in the papers you have to confront three things which would look very different and you have to sort of get public buy into that to this the first thing is no no conditionality you get this come what may um the second is um higher visible marginal rates of tax now people who are coming off benefits or tax credits at the moment can for for a short period for a tranche of income have very high marginal rates of tax but it would be more explicit that you'd go from a 20 a 20 plus 12 national insurance to um to a flat rate 40 but without the allowance um and and then to a much higher one 60 percent or so um once you get above about 40 000 a year so so the second thing is that people would have to accept that um which would look very different um and the third thing is is that of course you can talk a lot about winners and losers but a lot of this would be paid for by people who were better off um and to give a not so extreme but on the extreme end case um in reform scotland's version somebody on 100 000 a year would go from pay from from retaining 65 000 of that i almost two thirds to about 43 and a half sorry so to about um 53 and a half thousand of that i little over half so i mean that's a that's a big sort of thing for people to accept that that somebody on 100 000 admittedly a single person would would actually go from keeping nearly two thirds to only just over half their income i mean that's just one version of it but you have to you have to realise that that those big changes i mean i would would have to be accepted by the public and i'm struck this morning by the by the headlines about how white van man has been ripped off um white van man is is a self-employed person apparently um who um who is um who has been clobbered yesterday um by the fact that um offsetting a small gain from from um a polishing class to national insurance contributions they're going to gradually sort of have their national insurance um rates increased by two um percentage points um and that's 15 percent of the population that is an outrage and and the deli telegraph says that the chance of the exchequer should be shot or something um now that gives you that gives an idea about where we're starting from in terms of public opinion and and i would just think that you know i'm not trying to say this is i mean a lot of people have said we can't we can't do this the question is is this something which is politically in any way conceivable John birtheson in yes when we sat down to look at it and i wrote this paper with reform scotland with james mckenzie who's a green and we decided to actually use the green model rather than rather than reinventing the wheel we're not absolutely hung up on the precise details of it we're a long way away from any system actually coming to fruition but we thought that that model was actually as good as any as a as a as a demonstrator what it does in its simplicity is it doesn't address pensions we thought about including pensions in it and there is an argument to look at it emholistically we've done separate work on pensions and i've thought about maybe trying to combine that work at some point to to look at it but as it stands it's for working age population we our model also doesn't deal with housing benefit which would be would be additional as well there are many models out there as professor harsh has said there a lot of them are really quite similar i'm not hung up on one or another you can argue about it at the moment they're kind of demonstrators i think peter you wanted to come in any way um just just briefly i'd hate the committee's thing that the 40% tax rate was the consensus view it really isn't it's heavily disputed right so let's let's just get met put clarity on on on that one but i don't want to get into the and we can talk about these models all day believing me you can drive yourself mad looking at the at the spreadsheet the question is a broader one about how scotland could get to this position where the public was brought in i think the the lesson from yesterday's budget is don't take don't change tax rates without building a consensus around it first right so it would work like like this and by the way we have made enormous changes to the tax and assist social assistance systems over the last 10 years i could you know take personal allowance i've mentioned pensions and we're talking the corporation tax we're talking tens of billions the forecast borrowing changed by 27 billion pounds between november and march you know so when we're talking about figures of 15 to 20 billion pounds this is not crazy talk in terms of in terms of quantum but the process of change will work like this you do some experiments but you build a public conversation around this the reason these institutions are here is because scotland had a public civic conversation over a long period of time and decided it wanted its own government and parliament right so you can shift people by having the dialogue and conversation you would then look to establish a Scottish model and you would build consensus around that having engaged in a broad civic dialogue about it and that would be that would be a model that is suitable for the politics ethos and culture of scotland and then you would look at the implementation and consider the impacts on individuals on tax rates and so on so i would engage in a broad process and i would take the first steps to have the experiment as the first step in that process but have the big conversation as well alongside it before before i bring allison once to come in one thing that has struck me yes in all different types of models and you've all explained about the different economics of it but nobody has ever mentioned the money that you could save by having a basic income when you talk about the revolving door of people on you know low page you know the economy having to go forward and get housing benefit then get this other benefit you know all of that not all of it i would assume most of that would disappear so therefore you would be saving there in that particular respect that you wouldn't have people having to turn up fill informs constantly go back to work then fill informs when the zero hour contract has finished that type of thing it'd be interesting if anyone has done anything at all on the knock-on effect of the money that you could save if you change the social security system as we have it or know it just now sorry to say that the administrative simplicity of a basic income is one of the attractions to us and we do mention that in our in our paper as a potential saving and it's rather difficult to quantify it though but i think that we have identified that you know there is a gap between what is spent on social security now and what would what basic income would cost and that part of that gap could be filled by simplifying the administration of it i think it's the case actually that most of the most of the the kind of models of basic income that i've seen do take into account the fact that means tested benefits could be reduced if not eliminated into in some of the the more ambitious basic income proposals a lot of the means tested benefit and tax credit system is just scrapped entirely in the more kind of modest basic income where it's kind of at jsa level or whatever you reduce expenditure on means tested benefits but you don't normally get get rid of it and there is i think there is some administrative saving although the administrative costs of the social security system actually are fairly low as a proportion of the whole thing so there is there is some saving there obviously there's less saving if you're still continuing to run benefits alongside it and with most other benefits and with most basic income schemes you need to carry on running something like disability living allowance you need to run childcare support and you need to run housing benefit i've not yet seen a convincing basic income model that can get rid of housing benefit simply because the disparities in housing costs for different people are just so big that if you had to pay a basic income sufficient so that everybody had enough money to to afford to rent quality housing you just wouldn't be able to do it that the sums involved would be so gigantic they just overwhelm the system so i think most of the models i've seen have taken savings from reduced reduced benefit payments and some other areas into consideration but it's still a big gross cost at the end of the day that needs to be funded by tax increases. Annabelle, you wanted to comment. Yes i think we're pretty well all agreed that eventually we're going to have to merge the income tax and national insurance systems and reduce the personal allowance if not get rid of it altogether which will create a lot more income revenue but there are also other tax expenditures which are the tax benefits enjoyed by taxpayers and one of the most unfair ones is the fact that people can put can contribute to registered pension schemes and put up to 40 000 pounds out of their earnings into these and they will get relief at the top rate which will be 45 percent and so they can get a free gift every year of 18 000 while not every old person gets a decent pension that seems to me to be grossly unfair but one could look at a whole lot of other tax expenditures and the amount of the amount of these is almost the same order of magnitude as the amount spent on the social security system and i think if these were examined and asked are these in the public interest and if they're not then they phased out if they are there could be other ways of paying for them which are not hidden within the tax system but made more explicit through some sort of donation system then that might help but can i also point out that although it looks as though the personal allowance is a reserved amount i happened to meet my mp my local supermarket which happens to be Ian Murray mp and i lamented the fact that the personal allowance was restricted and reserved and he said no the Scottish Parliament could adjust the personal allowance by setting a zero rate and create a new band now i don't know exactly how that works but i suggest that you could consult him to find out how you could actually implement a basic income scheme that is viable at the moment but i would exhort you to try and get more devolved powers certainly over the whole of the income tax system which includes these tax expenditures and i think that then it might become viable thank you so much i think we we could ask that question we meet with the Scottish Affairs Committee i've got three members who want to come in as saps but Professor Hersch wanted to come in yeah just on the specific point of administrative savings i think i totally agree with what Howard has said i think i believe that the amount from memory costed in by the citizens income trust was of the order of two billion out of a 200 billion sort of bill and it gives you an idea of how it's great to have the administrative savings when you compare the the the total amounts that we're talking about it is going to be small but the other point is is really important which is that if you continue to have a means tested housing benefit system and you continue to have some kind of means tested disability benefit system because because the addition not because the additions on on employment support allowance are very important then there is also the potential that you create new forms of complexity to replace others and i'm afraid that every time we've tried to simplify things we've obviously and we've often ended up doing that i think you're right professor hurch we've heard in our evidence taken from citizens advice that they now have to set aside 90 minute appointments for people coming in with queries about universal credit which was meant to simplify matters i'd kind of i have the impression from the panel that four of the panel members would very much like to see trials put into place to to understand the impacts but professor hurch i think you're clearly more skeptical but i wonder if you would agree that it would be worth trialling a citizen's income to understand better what the behavioural impacts and other impacts might be i mean you've said to that you know let's not obsess with going down this this one road let's look at perhaps a higher disregard of income within the present system but no one seems to be suggesting any of that you know where we are at the moment we have a system which you know many of us hear from constituents on a regular basis that it prevents terrible difficulties it's causing real poverty and hardship and we're looking at basic income no one seems to be suggesting you know the changes that you are but i'd just like to understand if you would be open to trialling a citizen's income well i think that um you don't need my permission first of all um but uh indeed but um i think that i i do feel very positive about a lot of the ideas which are attached to this idea of citizens income such as um not taking away your money as soon as you go out to work and um and having less of this kind of punitive conditionality and so i suppose what i'm suggesting is yes it would be good to have experiments which show what happens when you create those sorts of regimes but the difficulty with calling it a citizen's income if it's not is that it creates an ambiguity about where you're going and what and what's really going on here and i suppose what i'm suggesting is that if we really think that um there's a case for giving people more freedoms um and therefore creating more support for it for a system um a social security system then there's more than one way to do it and so i suppose what i'm saying is that i'd be i think these experiments whatever they're called are maybe worthwhile to get information what you do with that information is a different question and and i've i've yes expressed scepticism that the public would really buy into this idea of for example no conditionality and the the problem with the problem with if you set something's up and say it's a citizen's thing it's an experiment of having no conditionality just supposing in this finished example that 10 percent of people decide not to work uh because they think well this isn't this is okay i'm you know i can survive on what i've got um or even two percent um and then you sort of say well that means that we it's okay to let people do something for to get something for nothing that may work in finland i think they have a different set of attitudes than we do but it could actually be counterproductive here to to sort of try to suggest that people can get something for nothing rather than have a system which says which says yes there is people do have rights and responsibilities and from the start of making those things clear but also um not seeming to give money to people who don't need it who you know but to but i know means testing is it has a bad name but there are different ways of means testing and you you know if you had a very very generous amount that you allow allowing people to keep and if they were getting to something like the minimum income standard which my research calculates before you started taking it away and then you took it away quite quickly because you say you know you basically don't need help from the state now you know there is more than one way to do it and i do think it it there are real risks in in presenting it in the way that some people might react negatively to such as saying you can get something for nothing with a short supplementary thanks community two two questions again if that's okay short supplementary yes indeed one practical one theoretical that the practical was for hard read and noticed in your your paper you said if we if conceptually an introduction of a scheme was to happen that you would start an introduction at a relatively low level and work upwards from there and i just wondered if you could comment further on that and then secondly on a more theoretical basis again and to the painter i was i thought it was very interesting to phrase used about potential benefits for health mental health and family well being and i wondered if we've talked about the potential cost saving from the welfare system but also talked strongly about there would need to be a protection of public services key public services like the nhs and education and others is there has there been any consideration around behavioural effect poverty reduction reduced pressure on people that this would have a benefit in terms of savings on those core public services for example less demand for mental health services and also has there been consideration around there's a lot of pressure on people in the modern age around their working practices particularly in certain industries individuals being overworked as a common theme is there a potential positive benefit on productivity as well as creativity thank you yeah yeah in terms of in terms of introducing the basic income at a lower level and then shifting up later i mean this is i came to the conclusion that this would probably be the only way to proceed after modelling i did some kind of back of the envelope calculations of the cost of a basic income paid at the the minimum income standard level which is the the level that kind of donald's work done which is like you know where where you're basically operate you're getting enough money to kind of meet all your basic needs and it it just looks so vastly expensive to do that at that level that it just seems to me that introducing trying to introduce the the the basic income at that level just not it would just be a non-starter um politically because it was just too much of a kind of shock to the system whereas introducing an adult level of between 70 and 100 pounds a week say uh and say around 50 to 60 for children and pensioners might be at the you know at the level of the current single rate pension that's still expensive but it's not it's not so outrageously expensive that i just couldn't see it being done in one go um i think it i think it is viable albeit it's uh you know it's still a quite radical shift the idea would be to get something like that in place and then once uh if you could secure public acceptance for that kind of scheme and if it bedded in and people then you know if people then became supportive of that you could then kind of uh uh move the levels up more it'd be easier to get to a kind of mis standard or near a minimum income standard in two steps than one i think so the first stage is introduced at a lower level and then shift up um so that that that was really my kind of rationale for saying that yeah i'm probably one of the few people here who can remember the oil crisis of the early 1970s when we had a three-day week imposed on us and um productivity i try to find figures for this but i seem to remember people saying productivity felt about 90% with the three-day week instead of 100% with a five-day week so i have no doubt that productivity could increase markedly as to the national health service i would expect there to be enormous benefits because at the moment the stress that so many people are under with the precarity of their jobs or the stress of claiming benefits and possibly being made um getting sanctions and having no income must have an enormously detrimental effect on their health and i wondered to what extent that is um effecting the increased demand on both gps and on the national health service throughout the country and that reducing this would help that wilkinson and pickett of the spirit level of 2009 showed how countries which had a greater equality had benefits for everybody not just the poorer people in terms of mental health was improved physical health um a whole range of social indicators were improved and i think that these beneficial effects would be reflected if we had a basic income system here so Peter do you want to come in yeah on the on the two specific questions i mean on the working productivity um peace um it's very difficult to observe low pay high insecurity high flexibility and low productivity together and not think there might be some connection between them um and um basic income of course afford you the ability to step away which gives you some bargaining power but also gives you some ability to retrain for example and gain greater skills which might have more value in the marketplace there hasn't the numbers haven't been done in the context of basic income but i think it's an interesting area for investigation and by the way british social attitudes have started to pick up some really interesting changes in the world of work and the stress levels of those who are on who are routine and semi routine as a as they call it has massively increased over the last 10 years so you're getting a situation where increasingly you have um high pay stress um for low pay work um and that is a marked change as his feelings of insecurity um incidentally so i think it's important to observe the changes that are happening alongside that on the health and wellbeing front whilst the the the cost saving calculations that are implied by the data haven't been done um if you observe experiments um in in canada but also there was an accidental basic income trial that was done in north carolina in the 1990s now this is to spare with me on this one there was a casino that dispersed regular universal payments to an indian tribe and it happened to be at the same time um a long term trial that was being done into health and mental health um in that area so it picked up the impact on that group vis-à-vis other groups that weren't receiving this basic income and there were impacts on reductions in mental health reductions in domestic violence and reduction in and drug and alcohol use and those and those experimental results have been replicated in a whole series of similar type experiments across across the globe so it'd be interesting to take some of that notional data and benefits and consider what the savings would be for example to the NHS. Thank you very much. Any other panel want to make any comments before we go on to the next question? Ruth Maguire? Thank you convener um panel we clearly um have a very unequal society at the moment and there's never going to be a sort of magic wand to flick a switch and change it um some of the investments we make here um to help folk meet household basics would include you know the free school meals free childcare would that money have to be reinvested into a universal basic income and if we were to do that if we're reinvesting that money is there a danger that the folk who are struggling the most economically at the moment are kind of left behind as it's implemented how do we how do we sort that? Is he coming first? Yeah I mean I think you have to look at everything because it's connection to the basic income as you introduce it and consider whether it's still needed or not for example you wouldn't need job seekers allowance anymore um you would need some childcare um support and free school meals if you're if you're introducing it at the levels that we're that we're talking about so I think there is a real danger of either orism in this in this debate and I think you've got to think about what the stack of institutions might be that can meet the needs of a modern caring society in a modern employment environment. Anyone else want to come in and answer that question? Thank you. George Adams. Convenor and good morning. I'd like to follow on from what Ruth has just asked there as well because there's two aspects to this for me there's the hard facts or the hard challenges and the kind of software into which are equally as important and the hard facts and challenge is the fact that you mentioned earlier on if we're going to do this properly if we're going to do this right this place would need control of more powers at least in order to be able to deliver it because we've already explained I think it's part of your answer and to need to Ruth kinder hinted at that as well and from what I'm hearing from Glasgow and Fife the biggest challenge they are having bear in mind this is just things I'm here through the grapevine so the biggest challenges are happens exactly what Annie Miller's saying is working with the DWP, HMRC everybody looking after their own bit and it being quite difficult so would it not be the case that for us to do this properly there would need to be a major change in the powers that we have in this parliament to try and get it done properly because that was the that every one of you said right at the start if we do this we need to do it properly. Having looked at the set of devolved powers that the Scottish Government has at the moment or will have from this April I think it might be possible to do this but it would have to be done in a slight clutch because you'd have to take account of the interaction between the basic income and the existing tax credit or universal credit system so basic people who are receiving tax credit would have to have basic income kind of reduced to compensate so it's not a true basic income but if you look at your tax credit or universal credit entitlement plus the basic income paid by the Scottish Government it would amount to similar levels to a basic income. One issue that when I read the briefing paper from Spice they seem to think that the Scottish Government wouldn't necessarily have a power at the moment to introduce a new benefit for working age people. It's one of the sections of the legislation it needs to be a benefit based on an area of competence that the Scottish Government currently has and they couldn't quite see how that would be possible to do a kind of a universal working age payment. They could see how it could be done by adjusting child benefit levels for children and they could see how it could be done by adjusting pension rules for pensioners but it's the working age benefit which seems to be the difficulty. That's another issue over and above the interaction with tax credits and universal credit so there's no denying it would be difficult but I'm not sure it would be impossible. Having said that I mean you could decide that given the set of powers that Scotland's got at the moment the number of difficult is in the fiddliness of doing it alongside universal credit as it's administered at the moment it's just so difficult that it's kind of it's dangerous to receive because it might discredit the system you know you might get a messy outcome but I'm not sure you know it's my answer on that I think there is a viable way but it would be tough. When we started to look at this in reform Scotland we came at it from a Scottish perspective saying right okay we're getting these new powers what can we do with them and came to the conclusion that really actually it was it was too difficult to run the numbers and the powers etc on a Scottish basis and so therefore our model is on a UK basis and we could do a pilot currently but I think it would be so fiddly and expensive to try and introduce it on the powers that we currently have. One of the simplifications that we've suggested in reform Scotland either at a UK level or at a Scottish level is merging the activities of the dbwp and the HMRC because at the moment that creates significant unnecessary complexity. Mr Payne, did you want to come in? Just very good, I think you can do the experiment as we've outlined in the paper. Let me sidestep the question slightly and say that they would at the very least have to be a negotiated co-operation between the Scottish Government and a DWP, Her Majesty's Treasury and HMRC to make a full system work. Failing that you would need a transfer of further devolved powers. Mr Hirsh, what's the question? Just following on from Howard's point about the fiddliness of it, this is one thing, one idea which and it supplies to any kind of partial solution. If it's fiddly, you've kind of lost already because the whole idea of it, the whole appeal of it is to be simple and I was just trying to picture how this would work that somebody would be getting some and they'd have to report to somebody else that they were getting universal credit and then they would maybe retrospectively withdraw your entitlements to the citizens' income or withdraw part of it and you can see how very quickly it could get very fiddly and all I'm saying that we might, there might be a way of not making it fiddly but that is really, really important and so the more control, the more that one body is in control of it rather than trying to negotiate through lots of different things that are happening that the more chance you have of it having the appeal which is being claimed for it. Mr Pina, you just want to come and restore that. Really tiny point. I think there is a way of circumventing that. If we're talking about volunteers rather than people that are selected for an experiment, they could voluntarily not commit themselves not to claiming universal credit or tax credit so they would be in a parallel system in effect. If they then subsequently started claiming it as would be their right then of course they would leave the experiment. Mr Adams, do you want to come back in on that question? Yes, sure. Basically, I was going to add that it comes to the softer kind of challenges and it kind of connects to what we're talking about. We could end up discrediting a system if we don't get it right at the beginning. The whole idea is that how do we get to a place where, as Annie Miller says, people get control of their lives, the trickery of Labour have done jobs in the real world, I know what that is like. It's a case of how do we get people to that place where they accept the idea that this is a way forward. To a lot of people, this is an alien concept, the idea that they'll be able to go out there and I can effectively learn to play the ukulele properly instead of just do it with style and busker chords. It's the kind of thing where you can be or you can be and do something better. How do we get people into that place? I think that that's one of the most important places we have to be is to bring the public along with us, because it's such a radical change from what they currently believe if we're going to do it properly. Who wants to start off on that one? I think that you're quite right. I smiled at Professor Hurch's portrayal of the population being up in arms that are relatively small but significant change in the system of the budget today. I think that just because something isn't immediately popular, it's not necessarily a reason to not explore it. If we all did things just by focus group, then there's a lot of important public policy innovations that would never happen. I'm not saying that you've all got to get out there and sell it and say that you've all got to have a universal basic income imminently, but it is really important to get it discussed and to bring people along with it. If we don't get it out there and explore some of the concepts, then in five years' time, when it might become more imminent, there will be more barriers to it. I think that there are ways of debunking some of the myths and helping people to explore what it might mean. I think that politicians and civil servants have got a duty to be ahead of the curve on the rest of the population as well and to see change that might be coming down the line and to try to look at ways to smooth change. That could be one of the ways. Annie Miller. When I've looked at the figures with all the schemes that are presented on the whole, people who have an income, a gross income of less than the average, which is just over 20,000 in Scotland at the moment, all of those are likely to beneficiaries. By definition, with the skewed distribution of income we have, they are in the majority. As soon as people realise that they could be a gainer in the system, they will have a majority in favour. The Systems Basic Income Network Scotland is a very new organisation, and we are hoping that we will see our role as an educational one to educate the public so that they are in an informed situation. Then they will start meeting youth folk and say when we are going to have our basic income system. That is an important part of the process, to get the public on side, to make sure that they know what's involved and understand it. I find that when people do, you can't just get it over in two minutes. You may need an engaged conversation with them to explore it with them. Many people get a moment of conversion, and I am hopeful that, if we can progress this campaign, we can see a lot of changes in society. In the current economic system, there are some people, albeit probably a relatively small number, who are receiving or in possession of a high amount of wealth or income for doing absolutely nothing when people have received large inheritances, some people have had trust funds up by their parents or they are people who might be landlords and just receiving rental income and not actually doing any day-to-day work. The concept does exist. Partly this is about saying rather than only having the privileged few able to receive money for no direct labour input, why not democratise that and spread it to a much wider number of people? When you start looking at that as a democratic reform, it begins to sound a lot more sensible. We have to make this more tangible in order to generate the type of political conversation that we are talking about. I encourage you to look at what is happening in Finland. People are now receiving a basic income. There is an energetic national conversation that is going on, not in the theory but in the practice of how people are receiving it, the decisions they are making, what they are doing with their lives, the same in Kenya, the same will be true in Ontario and in Oakland. This is one of the most important things about experiment. This is why I do not think that it could just be a sort of technical experiment in social policy. It has to be part of a bigger national dialogue because those voices that participate in an experiment will be critical for our national culture to understand how it might be important to it. Obviously, the new powers give us an opportunity to do things a little differently. Do you think that the new powers give us an end to introducing a more citizens income-led social security system, for example, considering what people are automatically entitled to when they apply for one benefit so that they are not having continual dialogue? I think that it gives you scope for experiment. We had a look at this and this is just our understanding of it. I think that you can start there. If you go very much beyond there on the current agreement that you have in this particular area, the risk is that you end up in a sort of terrain that Howard and Professor Hirsh were talking about, where you are starting to compete against the tax credit system. You are almost spending money to compete against a system that is there. I think that is right. Once you get into that territory, it is very difficult. I do not believe that there are a lot of powers now coming in over universal credit, but universal credit for all its problems is quite an interesting vehicle. There are simple things that you can do, such as lawering the work allowance. Unfortunately, one of the big appeals of the universal credit when it was first announced was that you were going to be able to keep your benefits and have quite a high allowance that you could then earn before you started to lose them. That has gone into reverse with austerity. There is a lot of scope if you are willing to make the resources available, for example, through high rates of tax to do that within the universal credit system if you can get hold of that. I would encourage that to be considered as well, not only a completely new system, because as everyone has agreed, it takes a while to get to new principles and you have to start with what you have. Annabelle, you wanted to come in. I certainly think that it is possible for a pilot to take place. As to implementing it, a lot depends on what devolved powers are. For instance, I tried to understand that it said that we can create new benefits within the devolved powers. What does that mean? It is not at all clear. If we can create new benefits, then we can create a basic income. We can implement it small to begin with because of the cost and we need to get gradual change so that people can adjust to it. When we give out a basic income, for those who are on means-tested benefit, it will be counted as income and their means-tested benefits will be lowered. Therefore, they will have less reliance on the means-tested benefits apart from housing benefit and disability benefit and childcare would be over and above, of course. They would get their benefit and you might say, well, are they better off? Yes, because if they are at the risk of sanction, at least they will have this to live on. They will not be completely destitute as they could be under the current sanction system. I think that there are possibilities. Some things need to be clarified and certainly the more powers that we can get devolved to Scotland, the more control we will have over the ability to create our own sort of society, which I would like to see as a new Scottish environment. Sounds very good to me. Thank you very much. I'm sure we'll all agree with you. I don't think there's any more questions or any more comments from the panel. Can I just thank you so much for the evidence that's been enlightening, as you might say, Ms Miller? Can I just suspend the meeting for a couple of minutes to our next set of witnesses coming? Thank you very much. Welcome back to the meeting for our further agenda item 3, which is subordinate legislation. Our next two items today are the council tax reduction Scotland amendment regulations in SSI 2017 stroke 4.1. We do have Scottish Government officials here today, Robin Haines, head of council tax, and Dave Sorris and statistician Scottish Government. Before I introduce you to say a few words, Mr Haines, I believe that Clark Simon is here, and what can we give a small explanation into the council tax? It's just to report that the DPLR reported on this instrument yesterday. We emailed around the report, but it wouldn't have gone out originally with the papers because it wasn't available, so just to bring you up to date with that. At its meeting on 7 March, the DPLR Committee agreed to draw the attention of the Parliament to this order. It did so on the basis of the previous SSI on council tax reduction that it believed that regulations raise a devolution issue, i.e. that they may be outside the powers of the Parliament. However, this time, it also pointed out that the Parliament now has new social security powers under the 2016 act, and that if the Scottish Government consolidated these council tax reduction SSIs, it could frame a new scheme under this legislation, rather than under the local Government legislation, which would remove the issue. Is that just to bring up to speak with that? Thank you very much, Simon. Mr Haines, you wanted to say a few words before I open up for any questions. Good morning, and thank you. Perhaps by way of introduction, I could add very much to either the policy note or the very comprehensive briefing that was prepared by SPICE. Annual uprating of the council tax reduction scheme amount is now very much part of an annual routine. There is a significant addition to the regulations this year to ensure that those council tax reduction cases that are in receipt of universal credit will benefit from the increase in child premium that was part of the Government's wider reforms to council tax and set in legislation in the last half of last year. I suppose that the only other thing I would add is to perhaps emphasise the content of paragraphs 14 and 15 of the policy note. These regulations are very much anticipated by the local authority revenue benefits practitioner profession, and to assure the committee that we are always in very close contact with local authority revenue benefits practitioners and their software suppliers, not just in the drawing of the annual uprating regulations, but throughout the year. Thank you very much. I do remember from previously in regard to this particular subordinate legislation, this instrument obviously raised some issues at one of the other committees. Basically, from reading the papers, that seems to have been resolved and therefore certainly I will put it to the committee for any questions, but it seems to be resolved because we are looking at the security powers that has to come to this committee. I will open it up for questions of anyone's, any questions to sales. Pauline, do you want to? I mean, it's just to clarify that in the note, council tax and E&F will get some assistance in certain circumstances, is that correct? The amending regulations that were laid last year to the council tax reduction scheme established or rather extended the council tax reduction scheme to provide relief to the changes in council tax charge for properties and bands EFG and H that were part of a further statutory instrument laid last year. Over and above that, a household's contribution to council tax is determined or entitlement to a council tax reduction scheme more widely and they can be in a property in any band. There's no restriction, but the new bit that was created last year was an additional relief for low-income households and properties affected by the change to council tax created in legislation. Anyone else got anything to raise with the officers? It was just simply to ask the Government's response to the DPLR report. Sure. It won't be a surprise to committee members that the DPLRC came to this view. They've always held a wholly opposing view to the Scottish Government since the scheme was created back in 2012. By way of response, I might point to perhaps three things. Firstly, to compare the council tax reduction scheme to the council tax benefit that it superseded. Council tax benefit operated by local authorities receiving specific amounts from DWP in relation to individual council tax benefit claims. Effectively, local authorities were administering a benefit and administering DWP's monies. The council tax reduction scheme, although it is created to make the client journey very similar to the previous benefit, is on a profoundly different basis. No payments are made to local authorities in relation to individual applications or reductions provided. Rather, there is a global amount that is added to the local government general revenue grant, which I think next year is £351 million. Local authorities bear the revenue risk of the reductions being different from that amount. I think next year we are expecting it to come in below £351 million. There is a profound difference there. I suppose that the two other points are—firstly, it might be helpful just to look at the powers under which the scheme was created, which is section 80 of the 1992 Local Government Finance Act. The secretary of state, because it is pre-devolution, may make regulations as regards any case where a person is liable to pay an amount to a living authority in respect of council tax. The regulations may provide that the amount that he is liable to pay shall be an amount that is less than the amount that it would be, apart from the regulations, and is determined in accordance with prescribed rules. Those are the powers that the council tax reduction scheme are made under, and they seem to be very specific in allowing the sort of scheme that we have. I suppose that the third thing that I would point to is that when the policy that is now the council tax reduction scheme was being developed back in 2012, the UK Government took a very keen interest in what we were doing. I myself was partied to many conversations with civil servants in Cabinet Office, Scotland Office, HM Treasury and the Department for Government in local communities. They are fully aware of how our scheme operates, and they have never raised or even suggested it might raise a devolution issue, nor have they done so in relation to the almost identical scheme that operates in Wales. I understand you to be saying that the effect of this is not to contravene the reservation of powers under the Scotland Act 1998. Absolutely. That is the view that the Scottish Government has always taken about the scheme. That includes, insofar as the reserve matters regarding taxation. The Social Security Reservation of the 9898 Scotland Act 1998, if I recollect correctly, expressly states that any benefit is beyond the powers of the Parliament according to that version of the devolution settlement. Because the council tax reduction scheme is not a benefit, that does not apply. That is the key difference. The council tax reduction scheme is not a benefit. It means a tested schedule of reductions to household liabilities. The new type of council tax reduction without households below medium income who live in band E to H properties with an exemption from the increasing council tax due to the change to the way that council tax in the higher bands is calculated. So bands E, F, G up to H will be rebanded with a higher rate, but they will not pay relevant to how the local authority they live in increases their council tax, so if it was a local authority that increases their council tax by 3 per cent, if someone in that household of a council tax pair was below the medium income, they would not pay the 3 per cent rise? So your question relates to the regulations that were laid last year and are now in force, but those include a page of what looks like rather complicated algebra. The point of that is to ensure that the council tax reduction in the circumstances that you described relates to the structural change to council tax for those higher band properties and not any locally determined increase. I'm sorry, I don't understand that. Did you want to come in, Ben? No? So what benefit are they getting, then? What does that mean? Is it with an exemption from the increasing council tax due to the change in the way the council tax in the higher bands is calculated? So what relief are they getting for that? The regulations that changed council tax last year changed the amount charged on properties in bands E, FG and H. The way council tax works are that those are fixed proportions of the band D charge and councils set the band D charge and it is then set in law the amount that every other property would pay. So the regulations that were set last year will entitle, if a household is entitled to meet the criteria, they will get a council tax reduction equivalent to the increase in council tax caused by, for example, the band H going out by 22.5 per cent. Thank you. Gordon, do you want to come back in again? I just clarify something. I think that the section of the Scotland Act that we would be talking about is in schedule 5. The particular definition relates to the interpretation section that talks about benefits, including pensions, allowances, grants, loans and any other form of financial assistance and that relates to reserve matters as I understand it. Do I understand you correctly that in effect what is happening is that there is not a payment under this scheme but rather a reduction in the liability in terms of the person's responsibility for housing rentals? In relation to council tax roll and rent, what you have described is correct. The council tax reduction scheme does not operate by making any payment to anyone. It is a reduction of liability as opposed to a payment owed. Is that the end of questions? There are no more questions and I want to thank the witnesses very much indeed and we would now move to our formal consideration of the regulations. Our members are content to note the instrument. Thank you very much. I will just have a couple of minutes for the gallery to be clear. Thank you very much for coming along and we will continue the meeting in private.