Argue with an Academic: Andrew Harrop on the Abolition of Inheritance Tax

If you have a policy idea in response to this piece, please submit it to editor@kingsthinktank.org by 12th February 2016. The best ideas will be published in the March edition of our journal, The Spectrum. 

Andrew Harrop is General Secretary of the Fabian Society, the Labour Party’s main policy think tank. 

When you tell people about the British tax system they don’t think it’s fair. Of course that’s true with respect to multi-nationals like Google, using legal loopholes to pay tiny taxes on their profits. But it’s also true when it comes to the balance of tax between rich, middling and poor families.

People know that, as you earn more, you pay a higher rate of income tax. So when the Fabian Society told a series of focus groups that, looking across all taxes, low income families pay a higher share of their income, the participants were puzzled and angry.

But the uncomfortable reality is that poorer families pay lots of other taxes which are both less visible and less progressive than income tax: national insurance, VAT, council tax and sin taxes. And they don’t start with much money in the first place, so any liability represents a bigger share of their income.

We either need to increase the incomes of low earning families, through benefits, pensions and pay. Or we need to reform the tax system to reduce their liabilities (and raising the income tax personal allowance won’t cut it – this benefits the rich more than the poor).

The mismatch between tax liabilities and people’s ability to pay gets even greater when you look at wealth as well as income. Most low income families have few assets to their name (indeed, many are in debt). While at the top, wealth has been rising much faster than incomes, both over the long-term (the Piketty effect) and since the financial crisis. This means that wealth inequality is far higher than income inequality, and yet we tax wealth far less than income.

The participants in our research told us that people with the broadest shoulders should pay more. So we concluded that the public is ready to be persuaded that wealth should be better taxed.

But there is an obstacle in the way. The same people who want the rich to pay more also loath the most prominent wealth tax we have right now: inheritance tax. For good or ill, the tax is too toxic to save, because citizens think it is a tax on grannies and grief, not on lucky heirs.

Our solution is to introduce a range of new ways of taxing wealth, but at the same time to scrap inheritance tax. The most obvious way of doing this is to stop taxing estates and instead to tax the recipients of all gifts and transfers, on the same basis as we tax their income. After all, it makes little sense to tax income generated through hard work the most, income generated from investments a bit less, and money we are lucky enough to receive for free the least.

Alongside this, other ways of taxing wealth are needed. Property or land should be taxed in a more proportionate and less intrusive way. The combination we have today of council tax (regressive) and stamp duty (progressive but distortive) makes no sense. A proportionate annual land or property tax should take their place. Meanwhile, there are lots of proposals kicking around for the reform of taxes on capital gains.

With that we would address the future taxation of wealth. But what of all the wealth accumulated over so many decades of minimal taxation? Perhaps it is time to consider a one-off, retrospective tax to pay for future public investment. A forthcoming Fabian report will make that case, with a particular emphasis on valuing and taxing wealth hidden in off-shore tax havens.

Selling all this won’t be easy, but people’s instincts are that people with a lot should pay more. The detail of the reforms will need to go with the grain of public opinion. That’s why there will need to be some give and take. But on taxing wealth, we have a wealth of options.

 

 

Podemos and the ‘Passive Revolution’

World politics is in the middle of a massive historical shift, marked by the economic and demographic decline of the Old Continent and the backlash against globalization and its uneven development of capitalism.

Domestic politics cannot remain unaffected, a fact directly reflected in the rise of anti-systemic parties nationally – UKIP, Front National, Podemos, Syriza, and 5 Stars Movement among the most important. And though each of these parties emerged from their specific national and historical contexts, all resulted from the omnipresent interaction of the current economic structure (a global economic crisis) and political agencies (the crisis of the liberal political class).

In Spain, the economic crisis hit hard on housing and employment, made more miserable by the chorizos – the term angry citizens use to describe their political representatives. These two events provided a very fertile social and political ground for a movement led by a leftist intelligentsia but which is described as socialist by the neoliberal hegemonic megaphones.

Podemos, the Spanish left-wing populist party led by Pablo Iglesias.

But what is Podemos from an ideological and operational point of view?

Podemos leaders follow, ad literam, the precepts of Ernesto Laclau and Antonio Gramsci, authors that they have studied professionally. On the one hand, one finds in Podemos the populist Marxism constructed by Ernesto Laclau and Chantal Mouffe in Hegemony and Socialist Strategy (1985), the ideological basis of Latin American socialism. Laclau’s innovation was to move the focus of struggle from class conflict to the more general concept of “radical democracy”. His thought was akin to the tradition of operaismo (workerism), an Italian current popular in the 1960s and led by Antonio Negri, which portrayed the working class as the engine of economic development because worker struggles triggered capitalist reactions and technological advancement. This working class has nowadays become a “multitude” formed by any precarious and exploited individual – as Negri called it – or all those which are de facto outside the social contract, to put it in Rousseau’s terms. For Laclau, the task to lead such an undefined mass required a charismatic leader.

Meanwhile, the Podemos planning office is clearly haunted by Gramsci’s specter. The Sardinian thinker argued that the control of those hegemonic instruments, which allow states to reproduce domestic orders without using force, was crucial. But because a sudden change was no easy matter in the middle of subtle capitalistic ideological bombing, he theorized a “passive revolution”, a long-lasting process of penetration of the institutional fabric and a realistic plan against a society afflicted by widespread false consciousness and difficult to change.

All this considered, then, how does Podemos reflect this ideological package?

Beginning from “leadership”, Podemos’ leader Pablo Iglesias is a charismatic character who enjoys being in front of cameras and microphones. He is the one and only face of the party in most TV shows of the week. His “strategy for struggle” has focused on the cast, de facto highlighting that the conflict is not between low-wage workers and capitalists, but between ordinary people and a greedy casta which systematically puts its privileges and interests beyond those of citizens. Iglesias has succeeded in depicting politics as the problem of all, and this is how a group of leftist intellectuals has become a transversal political force despite the fact that some still describe members of Podemos as perroflauta, referring to their ponytails, dreadlocks and an apparently hippie-like life-style.

What Iglesias has done very well is to show how well he digested the Gramscian vocabulary and made the most out of “hegemonic instruments” thanks to an admirable ars rhetorica.

He has carefully chosen the issues that Podemos should bring onto the table of public debates – the constitutional reform remains a priority – leaving on the side issues which do not maximize consent. So far Iglesias’ strategy has worked, as demonstrated by the seats in the European Parliament and by the 70 seats in the Spanish one. This is just the beginning of his version of “passive revolution”. How will it work? He told the New Left Review that first it is important to grab the reins of government, only then it will be possible to shift to more socialist politics.

In a very spontaneous movement, tactics has now become the key word and Iglesias knows how to do them. The plan in fact sounds brilliant, but is Iglesias’ insistence on tactics to the detriment of important contents? As Iglesias’ second in command puts it: “we need to build an electoral war machine before the window of opportunity which has opened will close”.

But does not the authenticity, spontaneity, and differences that Podemos enjoy vis-à-vis mainstream parties risk being wiped away because of a religious use of tactics? For those that would like to see Podemos as the agent of a socialist turn in politics – like me – ahead of all these tactics looms dissatisfaction. Over the last year the divergence between mainstream parties and Podemos has unfortunately diminished. This can be seen from Iglesias’ personal use of space in television, the prevalence of electoral calculations over internal democracy, the support of Syriza despite the insistence of Greece accepting EU blackmail, the moderation of Iglesias’ posture regarding the European question and the guaranteed minimum salary. The much criticized 5 Star Movement, often told to be more right-wing, appears to be clearer and more radical on these points. While parties in Spain are struggling to form the government, Podemos put as an essential requirement for governing with the PSOE (the Spanish Socialist Workers Party) the resolution of Spain’s regional questions, but it seemed odd not to have first stated that it will accept to rule with the PSOE only if there would be a restructuring of policies with a worker-friendly logic.

Here lies the problem of Podemos. If it continues to put tactics beyond anti-capitalist contents it will be difficult to see substantial changes in Spain. However, what is currently a small revolution remains a positive phenomenon in both Spanish and European politics.

 

Zeno Leoni, PhD candidate at the European and International Studies Department, King’s College London

Argue with an Academic: Yuan Qiong Hu on Access to Medication

If you have a policy idea in response to this piece, please submit it to editor@kingsthinktank.org by 12th February 2016. The best ideas will be published in the March edition of our journal, The Spectrum. 

Yuan Qiong Hu is the Legal and Policy Advisor for the Access Campaign of Médecins Sans Frontières/Doctors Without Borders and is a PhD candidate from the School of Law, School of Oriental and Africa Studies (SOAS), University of London. 

The year of 2015 marked the 20th anniversary of the Agreement on Trade-Related Intellectual Property Rights (TRIPS) under the auspices of the World Trade Organisation (WTO). TRIPS came into being and faced controversies since its early years. The impact of TRIPS on access to medicines and innovation has triggered international activism and resistance, especially from developing countries. Essentially, medicines that were once excluded from patent protection in many countries are now subject to patenting as required by TRIPS. Following the HIV/AIDS epidemics in Sub-Saharan areas during the 1980-90s, the patent monopoly and high prices of newly marketed HIV/AIDS medicines made the treatment out of reach for many. This public health crisis pushed the only normative development under the Doha negotiation of the WTO leading to the adaptation of the Doha Declaration of TRIPS and Public Health in 2002, and consequently the protocol amendment of TRIPS itself in affirming certain flexibilities in balancing the public health needs of its members. Some argue that the current mechanism of TRIPS, which contains a number of flexibilities on patenting, is good enough for members to use according to their needs, and others disagree, arguing that global political economy and patenting practices have presented a rather more complex picture concerning the debates on intellectual property, access to medicines and innovation.

The first question one might consider asking is the extent to which patent could be used on medicines, and why it matters. While TRIPS only sets the minimum and general standards, countries can decide the specific criteria in judging whether something deserves a patent. The current practices tell us that nearly every step of development and manufacture of a chemical pharmaceutical product could potentially be subject to patent protection. Variations exist among different countries depending on national patent law specifics, but the industry will pursue patents by submitting applications on the chemical compound, derivative forms such as selective salt, polymorphs, ester, crystalline forms, pro-drugs, process of making the compounds, formulations, different dosages forms, and the intermediate chemicals, and so on. Many such applications are not approved in countries where those are considered merely as small changes on the known medicines, and not really a technical breakthrough. And yet, as long as those small changes are granted patent in some countries, the industry gets prolonged monopoly in those markets for another 20 years and beyond. This is the so-called ‘ever-greening’ strategy that is functioning as an unwritten norm in practice.

For the debates over access to medicines and innovation, the ‘ever-greening’ practice plays a vitally important role. On one hand, it delays the forming of generic competition medicines that is critical in improving affordability of medicines in the market. On another hand, more fundamentally, it constructed a misleading message of how patent systems treats inventions. While small and obvious practices in the laboratories can easily find their ways to legal recognition and thus form a commercial monopoly, the very understanding of what is innovation gets further blurred. The question of whether the objective of scientific research for innovative outcome is to get more patents as the indicator, or to aim for continuously making progress by quickly publishing the results for public and peers scrutiny, has become indecisive. The possible scope of patenting, with clearly commercial motivations, keeps intruding into every corner of innovation practices.

The technical side of the question as previously mentioned is closely linked to the broader policy debate in the context of global trade and public health. First of all, if talking about the global governance structure of intellectual property in relation to public health, a more nuanced picture has been presented to us in addition to looking at TRIPS alone. While TRIPS deals with rules and principles of intellectual property law specifically in the context of trade liberalisation, the substantive rules and principles have also reflected the old 19th century Paris convention concerning industrial property that is now administrated by the World Intellectual Property Organisation (WIPO). The political relevance of WIPO’s normative discussion has been eventually consummated with those of the WTO. At the same time, the increasing trend of creating new legal obligations on intellectual property through bilateral negotiations on Free Trade Agreement (FTA) and Investment Treaties have gradually overtaken the WTO’s central role in the debates over patent and access to medicines and innovation. While the WTO and WIPO are products of multilateralism of a kind and subject to some levels of sovereign and public scrutiny, the bilateral and regional FTA processes on another hand are carried on with no clear global governance structure above them.

This insufficient global governance structure has led to a failure to oversee the expansion of intellectual property, and this has in turn made the mitigation of its negative impact on public policy more difficult to pursue. It on another hand gives sufficient rooms for FTAs to raise the requirements that are not covered by the WTO and WIPO laws, such as those concerning patent on medicines. Examples of this kind could be found in a number of FTAs negotiated between developed and developing nations where provisions such as prolonging patent terms, stricter data exclusivity protection than what TRIPS asks, and making it difficult for countries to use compulsory license, etc. have been commented on and studied intensively, and these studies have demonstrated a significant detrimental impact on access to medicines and innovation capacity building for a country in the long term. For countries who continue to suffer from increasing prices of essential medicines that are necessary in order to operate the public health system, and for countries who have the aspiration of developing more innovation-capacity so they are able to catch up, the trend of unlimited expansion of intellectual property that only benefits a small group of companies in the global context has created an ever-growing barrier to overcome. The very recent examples of such tension could be found from debates over the negotiations of the Trans-Pacific Partnership Agreement (TPP) led by the United States, and the Trans-Atlantic Trade and Investment Partnership Agreement (TTIP) between US and EU when both sides of the debate have had intellectual property and its contentious relation with public interests as one of the critical sticking points.

The unclear global governance structure as above mentioned has also demonstrated the importance of looking at global health challenges to access to medicines and innovation in a more holistic way in the face of the indifferential expansion of patent norms on medicines. Since the 1990s, the debates have mainly focused on the public health crisis facing developing countries. For instance, the report of ‘Public Health, Innovation and Intellectual Property’ published by the World Health Organisation (WHO) in 2002 has rightly captured the root causes behind the lack of access to existing medical tools and neglected research and development on new medical tools that address health problems disproportionately affecting developing countries. Instead of arguing which level of intellectual property protection would do the job as one might often find in industry-led publications, the WHO report concluded by pointing out the commercial motivation behind the contemporary drug discovery business, which is driven primarily by the weighting of whether a market exists to buy rather than whether people are dying from no tools to treat. Patent has played a central role in enabling the pharmaceutical industries to direct their investment to where the market is bigger, rather than where the most people need it.

A few examples in recent years have repeatedly rung the bell of developed countries, and yet they have been insufficiently addressed. While generic competition, by using TRIPS flexibilities, has helped the scaling up of HIV/AIDS treatment at global level, this could not occur so easily now in the case of a different epidemic, as more countries have started adapting stringent patent norms on medicines and the using of TRIPS flexibilities have been put on hold in some occasions. For instance, Hepatitis C has been considered as one of the emerging killer diseases in many low income as well as high and middle income countries, as the infection can eventually develop into critical situation with liver cancer. The old interferon based treatment is intolerant and painful, and oral treatment had been long wanted. The situation started changing when the drug company Gilead introduced its new medicine Sofosbuvir to the market in 2015, but was priced at 1000 USD per pill in the US market. The same medicine is offered at different tiers of discounted and yet still very high prices in different countries by Gilead. For instance, the UK was offered a price of £35,000 per patient per treatment for 12 weeks, or 24-weeks for about £70,000, all for one drug alone. The high price as such had delayed NICE (National Institute for Health and Care Excellence) in concluding its recommendation to include the new medicine into NHS scheme until an increased £190 million fund was put in place in covering ‘these very expensive new drugs’ (by Richard Jeavons, NHS England Director of Specialised Services). Facing the same frustration and pressure with high prices of sofosbuvir, France introduced a new tax tackling high prices of medicines, and patients in Spain have brought law suits to the Supreme Court demanding access to the new expensive sofosbuvir after the public health agency had failed to bring the drug in time to the public health system

And yet, other sides of the story have revealed that while sofosbuvir is a new treatment for Hepatitis C, its patent applications do not stand strongly in many countries. The patent on sofosbuvir has been rejected in Egypt for lacking novelty and inventiveness, one of its patents has been rejected in China for failing to fulfil technical criteria, rejected in India for the very same reasons, and is subject to more than 10 patent challenges before the European Patent Office. Technically speaking, someone else has discovered sofosbuvir earlier than Gilead, who owns sofosbuvir by virtue of acquiring the small firm who developed sofosbuvir in the first place. So there are pretty good chances for countries with stricter patent criteria to screen out sofosbuvir patent as underserving and thus allow generic competition into the market. There is also a chance for countries to use mechanisms such as compulsory license when public interests and policy prevails over the commercial interests on patents. Both possibilities exist for developed and developing countries to explore and use for the purpose of balancing private proprietary protection with public interests.

In the past decade, compulsory license for public health purposes and the stricter patent criteria on medical inventions have been used in many developing countries to address the public health needs and to strike the balance of private rights on patent, access to medicines and the real meaning of innovation. Notably, Indian patent law has made it clear that small changes on old medicines would not deserve a patent protection unless firm evidence could prove the significant therapeutic improvement it could bring. Those legal innovations and experiences of using the existing flexibilities of patent law are critical in leveraging the public policy spaces for all nations who are facing public health needs. But for the future prospect, something new needs to come.

The above example of sofosbuvir is only one tip of the iceberg. It is also only one such case of many that proves the detrimental impact from some of the restrictive intellectual property rules proposed by ongoing FTAs negotiations. In all those regards, the unregulated expansion of concentrated commercial interests through a globalising patent regime on medicines has been standing at the centre of the problem.

Recognising the very nature of this increasing symptom as a collective system failure is vitally important if we consider the possibilities of the way out. One might find it interesting and helpful, in such a context, to revisit a very basic question of why a patent system came to exist in the first place, and thinking about the extent to which the claimed public interests orientation of granting a patent, by exchanging for public disclosure and technology progress for all with granting a temporary legal monopoly, has been misused and gone too far from its origin. One might also find it inspiring to look back at those historical grand debates on whether and how a patent system is needed or should be placed in driving innovation, and found a number of similar arguments and debates from old times to the ones we are facing today. Reviewing history in the context of the present struggle would perhaps redirect our thoughts to questioning the inherent inconsistency of the current patent regime on medicines in which the tensions between public and private, the twists between enclosure and sharing, and the different claims over intellectual creations and innovation are not conciliated. It is perhaps also high time to note that at the 20th year of TRIPS with struggles get intensifying at a global level with further diversified forums of debates, to look for an alternative model of public oriented medical innovation while the lost ethical ground and connections concerning the distinctive nature of medicines as a lifesaving necessity rather than luxury commodity could be redefined.

 

Female Genital Mutilation: An International Response

FGM. Three letters that have a power to send chills down any spine. It is incomprehensible that someone else could choose to excise a part of a human body, a piece of flesh, and someone’s womanhood.

Also known as female circumcision, FGM involves the partial or total removal of the external female genitalia, ie clitoridectomy and infibulation. Mainly preponderant throughout Africa, but also in the Middle East and Asia, it also occurs on our doorstep due to the constant migrations of vulnerable populations to Europe, in particular asylum seekers and refugees. The girls at risk can be as young as the age of 5. This is not a medical procedure: it has no health benefits. Neither does it stem from any religious beliefs. The justification for this procedure is solely cultural.

So why am I writing about this? Does it affect us? You and I are privileged to be in a position where it is our prerogative to speak out on behalf of those who have no voice. Freedom of speech is not a luxury – we own it. We have a power to raise awareness and protect our equals in this world. These cultures can seem worlds away from ours, which may marginalize the issue. Furthermore FGM is not always a priority and comes second to so many other forms of violence. Although strategies and conventions have focused on this cruelty, the fact remains, that according to the WHO, over 125 million girls and women in the world at this moment have been cut and numbers are perpetually increasing. Having access to this knowledge, how can we remain passive?

Before attacking this custom and banning it, it is important to understand why it prevails, as it is difficult to persuade those who uphold and carry out this practice to uproot a deeply entrenched custom overnight. It is still a sensitive topic in many countries, and one that must be addressed with prudence and diplomacy.

For the parents who submit their child to FGM, it may not be considered harmful, an assault or a violation. It is the belief that this is what must be done as a rite of passage to allow a girl to transition to womanhood (cultural and gender identity) or to prevent her from tendencies such as promiscuity or sexual deviation. It is seen as part of a “cleansing process”, to hinder bodily secretions and odours accompanied with maturity. Moreover, it is a means to ensure the purity of the female when presenting her to potential partners. These may be considered as protective measures, but the essence is that it remains a violation of human and women’s rights (it contravenes the UN Convention on the Rights of the Child), the right to life, physical integrity and health.

The social convention theory illustrates how it has become the norm to carry out this practice on girls without their consent, or their realisation of the potential future impact on their lives. This is thus the challenge: to convince not just a minority of the population, be they male or female, to break free from the social norm, but to educate the majority so that they understand the damage, and change their ideology in order to introduce a reversal of expectations. This is established through dialogue.

The United Kingdom is home to a wealth of cultures, including some for whom this practice is commonplace. The country therefore has an important role to play in eradicating this brutal act.

Educating our teachers, healthcare professionals and students at school to remain vigilant about the early signs of those at risk of an imminent procedure or to the symptoms of those who have just been cut is paramount. Signs such as a lack of integration into society, isolation from participating in physical activities, long trips to countries performing this rite and subsequent social withdrawal should be looked out for. It is imperative to provide support in the face of further complications: lasting physical effects, reluctance to seek medical attention, infection and other organ damage, as well as emotional or psychological repercussions.

Resources should be available for those who require legal guidance, and stricter measures put in place for offenders to be prosecuted. In 2003, the Female Genital Mutilation Act declared it illegal to arrange FGM outside of the UK regardless of whether it was legal in the country it takes place. However despite the criminal penalty being up to 14 years imprisonment in the UK for taking girls abroad, until this day no convictions have ensued.

We must recognise that in cultures where FGM is prevalent, avoiding the procedure can be considered as defiant, and individuals concerned are threatened with punishment. This changes the shape of their society from one of safety, to one of endangerment. However culture cannot be a means of justification for breaking the law or violating ones rights.

Abolishing female circumcision involves a multi-disciplinary approach: prosecutions, medical examinations, reporting of violence…

International governments have the manpower to support local communities to introduce educational campaigns. But we must circumvent the existing issues with these campaigns: they are mostly short term and small scale. It is time to think big: implement programmes, but monitor progress and evaluate their effects. Targeting those in power such as tribal leaders, healers, soldiers, and turning those people into role models will influence the communities who seek guidance in these leaders to follow suit. The other side of this coin however is the economic incentive for these matriarchs of society who are well paid for the procedure. Hence despite the steps taken to educate the local population, there is still a need for solutions. This is the ideal intersection for change and collaboration, partnerships and networks intertwined are key.

The access to media and other communications also enables us to propagate a message like a ripple in a pond across borders and achieve a much-required change and combat gender-based violence. There is a movement, but a more urgent effort is crucial to reach all corners of the world.

Rani Chowdhary

Argue with an Academic: Dr Rajiv Prabhakar on Asset-based Welfare

If you have a policy idea in reply to this piece, please submit it to editor@kingsthinktank.org by 12th February 2016. The best ideas will be published in the March edition of our journal, The Spectrum. 

Dr Rajiv Prabhakar is a lecturer in personal finance at the Open University and University College London. He is a world-renowned expert in asset-based welfare. 

Asset-based welfare (ABW) was one of the most innovative social policy agendas of the last Labour government. US academic Michel Sherraden first coined the term ABW to refer to the idea that the individual ownership of assets is important for individual welfare. Sherraden (1991) argues that traditional social policy towards the poor has relied on raising income through the tax and benefit system. He claims that while this type of policy addresses the symptoms of poverty, it does not tackle its underlying causes. He claims that owning a stock of assets is different because this leads to changes in how people think or behave in the world. This ‘asset-effect’ is important because people then take the steps to avoid welfare problems arising in the first place. For example, having a personal pension prompts people to save more to avoid poverty in retirement. 

The asset-effect is controversial. There is no agreement in the empirical literature about whether or not such an effect exists (Prabhakar 2008; Gregory 2014). Despite this controversy, ABW had an impact on policy. This was probably most advanced under New Labour. New Labour introduced the Child Trust Fund (CTF), which was influenced heavily by Sherraden’s ideas. Under the CTF, all babies born in the UK from September 2002 were given a £250 grant from government. These grants were locked into special 18 year old accounts. Children from poorer backgrounds qualified for an extra £250 and so received £500. This was described as progressive universalism. The CTF was universal because all children received a grant and progressive because poorer children received a larger initial endowment. Family and friends could save up to £1,200 a year into this account (HM Treasury 2001). New Labour had planned to add to the CTF by introducing a Saving Gateway (SG) in 2010. These were to be special 2 savings account aimed at those on low incomes. Every £1 saved by a SG account holder would attract a 50p match from government (the total government match would be capped at £300) (Edmonds 2009).

The CTF was the first policy of its kind anywhere in the world and attracted international interest. A survey of UK academics described the CTF as one of the most successful policies from UK government over the past 30 years (Norris and McCrae 2013). However, the success of the CTF was short-lived. In 2010, the Conservative-Liberal Democrat government stopped government payments into the CTF (though there was an exception for children in local authority care) and cancelled the proposed roll-out of the SG in its first wave of public spending cuts. The ABW has also attracted a growing number of critics who are worried that it diverted resources from more pressing areas of spending and that it helped prompt the financial crisis (Prabhakar 2008; Gregory 2014).

A basic capital approach

So what now for ABW? The asset-effect approach is not the only rationale for ABW. There is also an alternative approach that emphasises the importance of providing assets as a way of reducing wealth inequality. Wealth inequality has attracted growing comment and concern, as can be seen in public debates about the 1% of the wealthiest in society versus the 99% of the rest of society (Piketty 2014; Atkinson 2015). Although wealth inequality might be justified on some grounds (such as the incentive it might give for economic innovation), there are concerns that current wealth inequality destroys economic efficiency and is morally unjustified. Taxing wealth is an obvious way of reducing wealth inequality. However, spreading wealth is another way of trying to reduce wealth. ‘Basic capital’ is that idea that everyone should be given a capital grant as a mark of citizenship. If wealth taxes are used to pay for capital grants, then this could mean a two pronged attack on wealth inequality.

Thomas Paine outlined a forerunner to the basic capital idea during the eighteenth century. In Agrarian Justice he argued that a tax on natural resources should be used to provide capital grants for all young people (Paine 1987). There have also been modern versions of this idea. Julian Le Grand and David Nissan (2000) proposed that all 18 year olds should receive a £10,000 grant from government. In the US, Bruce Ackerman and Anne Alstott (1999) went even further and argued that all 21 year olds should receive an $80,000 stake. Differences exist in this basic capital literature about whether or not any restrictions should be placed on how such grants should be used.

More recently, A.B. Atkinson (2015) draws on basic capital ideas when he calls for a reborn CTF to reduce wealth inequality. Atkinson (2015) has a long-standing interest in tackling wealth inequality and a basic capital is one of his 15 proposals he makes for the creation of a more equal society. Although the details of his proposal remain to be worked out, Atkinson (2015) says that his plan is aimed at fulfilling Paine’s dream of an inheritance for all. The grant would be paid at adulthood. He proposes the introduction of a lifetime capital receipts tax (that taxes the gifts or inheritances that a person receives over their life) as a way of paying for grants for all. He says that revenue from current inheritance tax receipts in the UK would pay for a grant of around £5,000 for everybody. This plan would therefore place the CTF on a different path from the one that was developing under New Labour, and perhaps towards a more equal realm.

Argue with an Academic: Professor Edgar Jones on the Stigma Around Mental Health

If you have a policy idea in reply to this piece, please submit it to editor@kingsthinktank.org by 12th February 2016. The best ideas will be published in the March edition of our journal, The Spectrum. 

Edgar Jones is professor of the history of medicine and psychiatry at the Institute of Psychiatry, Psychology and Neuroscience at King’s College London. He is also programme leader for the MSc in War and Psychiatry.

In recent years, severe mental disorders have proved remarkably resistant to attempts to find effective medicines. The therapeutic revolution of the 1950s offered treatments for both psychosis and depression and it was expected that these pioneering drugs would be followed by a succession of innovative products. Although there have been a number of improvements, no step change in medicinal science has transformed the management of mental illness in the last half century. However, an area where it is possible to implement significant change without resorting to expensive research and development is the issue of stigma. Deeply embedded in Western culture is a widespread prejudice against mental illness. Depression, for example, is often interpreted as a sign of personal weakness, whilst psychosis is commonly equated with violent or dangerous behaviour. Society is generally sympathetic to those who have recovered from a severe physical illness and yet those who have suffered from a psychological disorder are rarely given equivalent consideration. Indeed, a worker who discloses a history of mental illness to an employer may find that it has an adverse impact on their career. And yet, self-stigma, judgements that people make about themselves, can often be more damaging than the opinions of others. People with mental illness often feel a sense of shame and disgrace. Self-stigma, or perceived stigma as it is sometimes known, prevents people from seeking or accepting help. For some this delay in receiving treatment may mean that their illness become more severe and may even require a hospital admission with time away from family and work.

The benefits to both individuals and society as a whole of reducing the stigma of mental illness are clear. People will be treated earlier and suffer less distress. Yet stigma, like the discovery of new medicines to treatment mental illness, has proved a tough challenge. A series of educational campaigns has sought to change the beliefs and behaviour of the public: England (‘Changing Minds’ a five-year campaign launched in 1998 by the Royal College of Psychiatrists), Scotland (‘See Me’, 2002); the USA (‘What a Difference a Friend Makes’, 2006), England (‘Time to Change’, 2007-11), and Canada (‘Opening Minds’, 2009).

Drawing on the findings of previous attempts to address stigma, the ‘Time to Change’ campaign sought to design a best practice model that would address attitudes and behaviour. The campaign was well funded (close to £21 million for the four years to 2011), led by major mental health charities, had clear objectives, and was subject to careful evaluation. The results reveal a mixed picture. The positive outcomes included a small reduction in discrimination reported by service users and improved recognition of common mental health problems by employers. However, some initial gains (such as improvements in the attitudes of medical students) proved short lived. Despite best efforts, the campaign had no impact on a range of key issues; there was no improvement in knowledge or behaviour among the general public, nor any reduction in reports from patients of discrimination by mental health professionals.

As well as analysing the results of the campaign, the researchers sought to explain why it had failed to shift public opinion. They found that people without professional knowledge of mental illness had their own culturally-determined explanations for human behaviour that were rooted in their understanding of peoples’ life histories. So well established were these beliefs that they were reluctant to reconsider. People in large towns were convinced that there was a sharp dividing line between mental illness and normality and repelled efforts to change that view.

Stigma of mental illness goes to the root of Western culture and has existed from the Middle Ages when people suffering from psychiatric illness were often interpreted as suffering from demonic possession. Until 1770, the public were allowed to visit the Bethlem Hospital in central London as a form of entertainment, reinforcing prejudice against those suffering from psychosis. To create a quieter, therapeutic environment, self-contained asylums were built in the nineteenth century but this had the effect of marginalising the mentally ill and removing their treatment from mainstream medicine. Only after considerable debate were psychiatric services included within the remit of the National Health Service on its formation in 1948. Hence, we should not under-estimate the effort required to shift beliefs and opinions relating to those with mental illness.

Research shows that the best way to challenge these stereotypes is through first-hand contact with people with experience of mental health problems, though a key factor is knowing a person who has had helpful treatment for episodes of psychological illness. Evidence confirms the value of local initiatives, either in schools, colleges and places of work, including hospitals.

Reducing the level of stigma in the general population will not solve the enduring problem of how to treat severe mental illness but it will temper some of the distress and anguish that accompanies psychiatric disorders. Whilst it requires us to re-examine deeply-held or long-established beliefs, there is no fundamental reason why these cannot be modified as there are benefits not only for patients, employers but also broader society.

 

The World Needs China More Than it Needs Us: Britain Should be Careful

The effects of Chinese stock market lows last week are illustrative of its self-sufficiency; the country no longer needs Western demand for cheap labour and manufacturing for economic growth. Instead, a centrally-regulated financial sector and vast amounts of foreign investment are the foundations for a sustainable, globalised economy. Continue reading “The World Needs China More Than it Needs Us: Britain Should be Careful”