Yet another proposal for basic income, this time from the left (Editorial, 7 June). It is an evangelical, revolutionary idea (once hailed as “the capitalist road to communism”) but it is deluded and diversionary. The Compass scheme does set out how to pay for a partial basic income for all: a rise in all income tax rates of 5p, the abolition of the personal tax allowance and the extension of national insurance contributions to all employees. These will raise the bulk of the £210bn gross cost. What is achieved? A big cut in child poverty, yes, but tiny falls in pensioner and working age adult poverty, despite the latter being the basic goal of the policy. And the numbers reliant on means-testing will be cut by only one-fifth.

Thus a powerful new tax engine will pull along a tiny cart (a partial and inadequate basic income). Why bother? The underlying belief or dream is that basic income will provide a mobilising theme to bring about radical change. There is no evidence anywhere in the world for this. Similar proposals have been made every few years for the last 50 years and they have got nowhere (and I do not mention Switzerland).

The problem is that it combines a radical vision with a naive or insouciant view of politics. Like all big-bang solutions it ignores contexts, politics and transitions. Somehow the fact that it is also advocated by neoliberals and Silicon Valley libertarians is seen as a plus.

I fear that this latest plan will drain the energies of the left in social policy and will divert attention from so many other worthwhile policy alternatives: the living wage, boosting trade unionism, free childcare, radical changes in housing policy, policies to reduce working time to limit turbo-consumption, green investment and so on.

Professor Ian Gough

LSE

• Your Monday edition (6 June) contained two related articles. The idea that Labour is looking at introducing a universal basic income (Labour may back free basic income for all) can be linked to the findings that the approach of the benefit cap, essentially to incentivise people to take wage work through forced penury, is deeply flawed (Welfare curbs hit chances of unemployed finding jobs – study). While there are many difficult questions raised by the universal basic income (for instance, how might the additional costs faced by disabled people be addressed on top of it), the fact that it is premised upon the notion of citizenship, rather than the relationship of individuals to wage work, has the potential to deal a fatal blow to the orthodox economic account that suggests people will not work unless forced to do so through poverty. An acceptance of the universal basic income, however, will have to be accompanied by a cultural shift that acknowledges that it is perfectly legitimate for people not to do wage work, while also receiving an unconditional collectivised form of support. This issue is equally significant to the costs of the universal basic income as the idea that wage work should be the aim of all working-age people is deeply ingrained in cultural and political life, and has been used to justify cuts to out-of-work benefits that are currently doing so much harm in Britain.

Dr Chris Grover

Senior lecturer in social policy, Law School, Lancaster university

• So, John McDonnell has admitted to finding attraction in a citizen’s income. The Guardian’s editorial response is that he deserves credit for daring to dance with big ideas, that he should proceed with caution and get the details right. I suggest that a better Guardian response might have been to point out that if we were to return to an effective progressive taxation regime such that there is an extra £50 per person per week, on average, being fed into the system, then instead of simply doling it back out to everybody we might be able use it to fund a proper and accessible public transport system, abolish student tuition fees and restore maintenance grants, stop closing down libraries and swimming pools, maintain our public parks and sweep the streets, employ more nurses in the NHS, give teachers a better deal, build council houses, properly fund a supportive police service, employ more coastguard personnel, care for the mentally ill, etc. There is potential employment in a fully functioning supportive and civilised society, all could work and all could be paid for doing so. The citizen’s income should never be considered seriously as a Labour party manifesto item. The party doesn’t need to “dream big”: it shouldn’t be dreaming at all, it needs to wake up and look at the real issues.

Peter Dunne

Preston

• Your editorial on 7 June, the Compass report to be launched by John McDonnell and the failure of the Swiss referendum (Swiss voters reject proposal to give basic income to every adult and child, theguardian.com, 5 June) highlight the problem with current universal basic income (UBI) proposals: either they are not generous enough to achieve the aim of replacing wages in an increasingly automated world; or they are not funded properly (the Swiss referendum); or both (the Compass report). The only politically acceptable and sustainable way to fund UBI is for governments to take control of the money supply and issue social credit. (QED wasn’t funded by tax increases.) You’d need sensible border controls, too – at least until it’s global.

Chris Hughes

Leicester

• Heather Stewart reports that “Labour may back free basic income for all” (6 June). This is a potentially attractive alternative to mass poverty, but, if we don’t produce products to spend this basic income on, inflation would quickly wipe out any expected benefits. The idea of a free basic income is evidence both that capitalism does not work and that socialism offers no viable alternative. The established rational connection between earnings and income is being eroded. We need to replace both capitalism and socialism with an agreed principle of global management and, as the referendum is demonstrating, our political parties need scrapping and replacing with a less confrontational process of finding a place for all elements of society. Setting the poor against the rich always ends in civil war.

Martin London

Henllan, Denbighshire

• All of the Compass paper’s calculations are predicated on changes to taxes and benefits having zero effect on labour supply decisions. Aside from being wildly implausible, such an analysis removes the key benefit of a UBI, that, if properly constructed, it increases labour supply, particularly among low-income households. The existing system creates a “benefits trap” where the removal/tapering of benefits means that the effective marginal tax rate can be astronomical on low incomes. By making benefits payments unconditional on income or employment status, a UBI solves this problem, bringing people back into the labour force.

The paper also proposes preserving all of the complications of the existing tax and benefit system. These both make it hard to administer, and mean that individuals cannot readily calculate how a change in their situation will change their tax liability. The presence of a UBI would enable us to drastically simplify things, with a switch to a flat income tax that would also replace national insurance. The system would still be progressive overall, thanks to the UBI payment being far more significant for people at the bottom of the income scale.

UBI would also enable us to increase VAT in a progressive way. In particular, a rise in the UBI level funded by a rise in VAT would leave those at the bottom of the distribution unambiguously better off. While reporting often focuses on wealth or income inequality, these are undesirable only to the extent to which they lead to consumption inequality, which VAT tackles directly.

In the past, UBI has been advocated by figures across the political spectrum. It is vital that the progressive centre reclaim this idea before it becomes permanently tied to outdated views from the far left.

Dr Tom Holden

Lecturer in economics, University of Surrey

• As a lifelong democratic socialist I’m dismayed by this idea. Yes, technological change is job threatening. But the answer is 1) a welfare state tailored towards people’s needs, not uniformity, 2) more private sector jobs, and 3) new categories of public sector work in the face of urgent social, environmental and security needs. UBI is a cop-out. It’s not redistributive. If generous enough to ensure a decent living standard for the less well-off, it would reduce the urge to seek work, at least for some. It would unnecessarily help the better-off while hugely diverting resources from other public goods. Large numbers are likely to resent a wholesale abandonment of reciprocity and the contributory principle. The ethical bias is towards libertarian individualism, not solidarity.

Jonathan Boswell

London

• I was in Zurich the day following the referendum on a basic guaranteed income and the reaction in the local press (Tages Anzeiger) was markedly different from yours. Despite the 76.9% nein vote, the losing side felt that they had made a significant advance in their cause as part of a fruitful opening up of an issue with important future implications. The paper noted that most of the support came from younger voters. Your phrase “the visionaries crashed to an overwhelming defeat” may be correct, viewed statistically, but the newspaper gave the clear opinion that this was only the first engagement in a long-term, important campaign. Even the fact that the reform’s supporters disagreed on some of the detail did not detract from this view. Since referendums are a regular event in Swiss political life, this vote does not mean that the matter is closed. The democratic debate continues. If only our body politic would engage so directly with us, the electorate.

Roy Bonner

Huddersfield

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• This article was amended on 17 June 2016. The word “principal” was corrected to “principle” in Martin London’s letter.