Minimum income and inequality cap

A minimum income and wealth inequality cap may sound radical but was in fact, in effect, what was being proposed on the Andrew Marr show on Sunday, 6/12/15. Universal credits, the passion of Tory right winger Ian Duncan Smith, approximates a minimum income concept. Tristam Hunt, a Tory lite labour MP, positioned the Labour Party as inherently about wealth inequality. Neither really comes into the Marxist camp! Today Finland has announced plans to do away with welfare and introduce a minimum income.Both are issues that are worth some thought and go hand in hand (in my view).

The minimum income principle basically monetises many social wage elements that already exist into one lump and pays it to every member of the society as of right. The thorny issue of social membership is a detail that can be set aside in a discussion of core principles. Along with rights come responsibilities and the society is allowed to set some social conditions for receipt depending upon practical necessity. These conditions need not be too onerous. Automation has been lambasted for taking peoples jobs. The good news is that robots, like slaves, need not be paid and their ‘earnings’ can be distributed as the minimum income. Indeed, in a market system this will be essential because robots do not consume anything above replacement cost. So who will buy their produce if there is not some form of social income? The level of social income will thus be linked to the productivity gains from automation.

There are of course many details that would need to be ironed out. Would the minimum income be constant irrespective of location? This could lead to some regional concentrations of income groups that might have undesirable unintended consequences. What should be done with people that steadfastly refuse to comply with social responsibility? A messy moral hazard issue emerges. It may be that the wealth cap may help in these respects.

Inequality is the motivating force behind market systems. If, despite your effort, society restricts you to exactly the same position as your feckless and lazy neighbour why would you bother? In fact, there is no doubt that that some people would still bother being internally motivated. In the absence of sufficient internally motivated and inclined people some external motivation may be necessary. Some potential for wealth inequality may thus be socially productive. However, how much is appropriate?

One way is too look at wealth only in consumption terms and ask what can one family actually consume. Even with generous consumption limits (yachts, second homes, Versace suits etc) and allowing for some generous inter-generational transfers, it is hard to justify more than £100 million per family in todays purchasing power. Beyond this sort of level (and arguably even lower) money becomes a source of social power and it is this power that needs to be curtailed in a pluralist democracy. So the criterion for a wealth cap should be some reference to social power (which includes political power). Some so called democracies are already in effect one dollar, one vote and this is the problem.

Wealth becomes less of a source of envy and resentment when it is earned and when it is capped in terms of the social power that it can deliver. The principles of minimum income and wealth caps can in fact make a market based society function more effectively. In particular by providing minimum income and linking wealth to consumption, the tendency for consumption to fall below potential output is in part contained. There are, obviously, many details that need to be considered but the principles of minimum income and a wealth cap set with reference to social power seem sound.

 

Notification of non-endorsable traffic offences and natural justice

The principle of natural justice requires that the law has a duty to act fairly. However, the procedure for notification of non-endorsable traffic offences would seem to be in breach of this principle. Non-endorsable traffic offences are those that carry a fine but no license points penalty. They include entering and stopping in a box junction, entering a bus lane and parking offences. Many offences are recorded by camera and notification is via first class post. The problem of natural justice arises because first class post is not 100% reliable.

The first notification of an offence usually includes the evidence (photographs) and time to appeal. If the fine is paid within 14 days it is typically halved. If the first notification, however, does not arise these legal options are lost. The second notification will typically add 50% to the fine and allow only 14 days to pay. If this does not arrive then the fine is escalated to a debt. One could find a bailiff at the door and be unaware of the offence. This is a clear breach of the principle of natural justice. One should not be penalised for an offence unless reasonable steps have been taken to notify the offence. The question is whether first class post constitutes reasonable steps. I would say it does not because the reliability of this service is no longer adequate to this task.

Non-endorsable traffic offence notices can be issued by many different official bodies. The process may be outsourced to private companies. These may have some interest in the first notice not arriving. Most people will pay the second notice on receipt. The process is thus open to abuse. This alone should be reason to be concerned. At the very least statistics should be collected showing the number of charge notices that are paid at the first notification and the second. Bodies that have higher than average payments on the second notification should be required to explain the outcomes and be subject to independent review.

An alternative would be to resort to more channels of notification. The database for notification is the DVLA registered owner database. If this could be expanded to include email and mobile phone numbers then two additional notification channels open up. These two channels have the advantage that proof of sending is available in the event of dispute. These also have the advantage of being cheaper to administer once set up.

You will most likely not be concerned if you do not drive. However, there are non-endorsable offences that do not involve traffic. You will probably not be concerned until you are a victim of this arbitrary and flawed notification system. It will be too late at that time. Take some action and write to your MP. If it comes up a lot they may look into it.

The notification by post is covered by such legislation as The Civil Enforcement of Parking Contraventions (England) General Regulations 2007. I am not aware of specific legislation that covers moving offences (e.g. driving in a bus lane).