In the past, the impact of high marginal tax rates lower down the scale was dismissed on the grounds that many people had little discretion about their working hours or intensity of work. However, even if that were true in the past, it has become less so in a labour market where there is greater fluidity. [...]

There is, moreover, a second crucial difference between the two types of scheme: the Child Benefit strategy would continue to make transfers to families with children at all income levels. This means that we have to consider issues of equity, not just between rich and poor, but also between those with and without children. We have to examine the way in which families with and without children are valued in our society--an issue not discussed in the standard economic analysis. Should we, other things equal, attach a higher value to £1 received by the person with a child than to a person with no children? Some people would say "no," arguing that having children today is a "lifestyle choice" and that the parent should be treated no differently than if he or she made a different choice. For those making such a judgment, the withdrawal of Child Benefit from those with higher incomes would indeed be the distributionally preferred policy, since income woul dbe taken from those who on average were better off. Such a "lifestyle choice" view, however, attaches no weight to the welfare of the child. Many people would regard this as unacceptable. A single person with a child should be counted as two people. The lifestyle choice view runs counter to the widely adopted practice in distributional analyses of adjusting household income for differences in family composition, as discussed in Chapter 1. Children are here today and should count today--as well as being an important part of the future. This is further reinforced by the demands of intergenerational equity. Taken together, these considerations mean that there should be transfers to families with children at all income levels.

Second, the proposal is for a benefit to be paid on the basis not of citizenship but of "participation", and for this reason it is referred to as a "participation income" (PI). "Participation" would be defined broadly as making a social contribution, which for those of working age could be fulfilled by full- or part-time waged employment or self-employment, by education, training, or an active job search, by home care for infant children or frail elderly people, or by regular voluntary work in a recognised association. There would be provisions for those unable to participate on the grounds of illness or disability. The notion of contribution would be broadened, taking account of the range of activities in which a person is engaged. Reflecting the features of the twenty-first-centry labour market described in Chapter 5, the definition of participation would allow for people holding a portfolio of activities over, say, a thirty-five hour week, and people may qualify for fractions of this period.

[...] Any actual scheme would involve a condition of eligibility and hence the risk of exclusion. Who would then be excluded from the PI? The criteria would exclude those who devoted their lives to pure leisure. The Belgian philosopher Philippe Van Parijs has written a famous article titled "Why Surfers Should Be Fed: The Liberal Case for an Unconditional Basic Income." In advocating the participation income, I am adopting the opposite position. I agree with John Rawls, who said that "those who surf all day off Malibu must find a way to support themselves and would not be entitled to public funds." In reality, relatively few people would be excluded (and the costings in Chapter 11 do not seek to identify surfers). The participation condition should, in my view, be interpreted positively. It is an answer to the question, who is eligible for the basic income? The answer conveys a positive message about "reciprocity," a message that is both intrinsically justified and more likely to garner political support.