Sian Berry, Green Party candidate for mayor of London, talks to us about universal basic income and flat fares on the Tube
But greens who can't bring themselves to vote for a Tory have a different choice: Camden Borough councillor Sian Berry, the Green Party candidate for mayor.
Business Insider was particularly keen to talk to Berry because she favours two ideas that would have dramatic economic effects on the nation's capital: A universal basic income for all and the replacement of the London Underground's varying Tube fares with a single flat-rate fare, like they have in New York. (A basic income policy essentially proposes that welfare and benefit payments be scrapped in their entirety and replaced with a single, flat, unconditional payment for everyone.)
She also told us what she thinks of Goldsmith.
Those of you hoping that a Green victory - unlikely at this point, but you never know! - might usher in a grand basic income experiment in London, like the Dutch are doing in Utrecht, prepare for disappointment. The Chancellor controls the welfare budget centrally from Westminster, so London can't do it on its own even if Berry wins. Berry actually favours running a pilot experiment in a smaller city like Bristol or Newcastle first.
"What you could do is say to the Chancellor ... we want to take all the welfare payments you're giving to sample of people, give everyone this unconditional payment, we'll run it for two years. But it might makes more sense to do it in another city than London. Somewhere like Bristol or Newcastle, somewhere a bit more settled and maybe also with a higher proportion of people on welfare," Berry says.
As for the Tube, prepare for a flat fare of £3 for all journeys, if Berry wins. Berry wants to phase in her fare reform gradually, so the flat fare dream would only be fully realised by 2023. "[A] principle I have is that nobody has a fare rise above what's currently paid." With the Green Party in control of City Hall there would be a flat fare for the entire city with a discount if you avoid zone 1, she says. "Except for people in Outer London, if you travel and avoid zone 1 you've got a cheaper fare. So at the end of the process you've got a cheaper fare for avoiding zone 1 and a flat fare for everyone else."
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Is that bad, building more homes?
"We do need more supply, but that's not going to solve the problem. He'll say more supply will bring down house prices and it will all be fine. That isn't the case, we've got a bigger problem than that in London. There's infinite demand in London for housing, not to be lived in but for people to just buy and hold as investments. You need to be doing other things as well. And when I suggested rent controls - he just basically said I don't want to interfere with market in that way."
So, yes, Berry is in favour of rent control. "We need some way of keeping the landlords' profit down a little bit, in terms of the rents."
"There are various models. Berlin has this new model of rent control where no one can put up rents beyond 10% of the current market rate in the area, which is going to keep a bit of a lid on rent inflation. I think you can probably just say that they can't be put above CPI [the consumer price index] or something like that," she says.
For readers who want all the detail, here is a lightly edited transcript of our full conversation with Berry. We also talked about Jeremy Corbyn, devolution, and Cameron's plan to demolish sink estates:
SB: Well not for London, because it's not something we could really bring in London, we don't have welfare policies. We are not in charge of the welfare system. The Dutch cities that are trying it out do have responsibility for the welfare payment systems in their area.
BI: So is it simply not possible for London to do a basic income experiment?
SB: Well it could be if we had more devolution and what we're going to have in our manifesto is 'devolution asks', and that will be one of them. I wrote to the chancellor about lots of things being devolved, including business rates. We're basically asking for lots of things to be devolved to London. It makes no sense if you've got lots of control over one side of policy that can make you savings in one area, that you can't do that balance yourself. A lot our stuff is about healthy food and access to good nutrition and also exercise. Now you get enormous dividends from getting people active and getting doing active travel and all of that, but it comes back to the health service which London does not have control over. You can't do that balance, whereas the Treasury can. The Treasury can take everything into account.
BI: Do you want control over just the spending side or the revenue-raising side as well?
?SB: All of it, basically. Ideally we'd want to run the welfare system, the education system, all the things that are best done at a regional level we'd want to be doing. Like a German region.?
BI: Would that mean there would be a separate London payroll tax, the way New York City does?
?SB: Ooh now that's a tricky one, well, I actually reckon that income taxes should be done at the national level.
BI: So how would that work?
SB: We'd be asking for as much autonomy as possible, basically. Our concept of an economic unit is a bio-region, which sounds a bit green and ecological, but it's also all the things that you might do at that level, so food production for example. I'd love for London to be more autonomous with its food production, within the boundary city maybe that's not quite right, you'd need some hinterland.
BI: Yeah, how is London going to produce its own food?
BI: But isn't the surrounding region greenbelt?
SB: You can farm on greenbelt, it's not like banned or anything.
?BI: But there's parks out there too.
SB: One of the best people we have out there for economics is Molly Scott Cato, who's our MEP for the South West, she is very good at talking about this kind of thing. I'm not an economist as you've already realised [laughs]. She's absolutely brilliant about talking about doing things at the regional level, making sure your economy is circular at that level. Making sure that the region itself can support itself. The South West has that kind of potential whereas London has a problem because it has such it has such a huge population, so much of our food supply needs to be brought in, we would struggle to be more autonomous on that, but we can do more work on that.
BI: The nature of trade though is that one area or one company or one person specialises in one task [not that everyone does everything for themselves].
SB: You'd want to do that at the right levels. So things that are easy for everyone to produce we'd want everyone doing their own.
BI: What's an example?
SB: Coffee is something you'd definitely want to trade internationally.
BI: Can we grow coffee?
SB: No! Coffee and tea we'll be trading.
BI: What are some things we could do that currently is inefficient or too expensive or retarding growth?
SB: Things like fresh fruit and vegetables, that are perishable, which you can grow almost anywhere, you've got allotments, you can grow on the rooftops, and things like that. They are heavy to transport. And they cost money to transport. So things like that, you want to become much more autonomous in.
BI: What is the Green Party's basic income promise?
SB: We used to have a very well worked out policy. The welfare system changed, so that [now] there are working tax credits. And what we don't have anymore is a very spelled out policy because working tax credits did do some of that blunting of the cliff edge that you get. ... A basic principle of a civilised society is that no one should be destitute. When you've got a complicated system that involves claiming, you are guaranteeing that some people are going to fall through the net.
SB: Because people would hardly get anything then. So you do have to make up for that with some taxes.
BI: I did the calculations: And it's about £430 a month for all over 18s. Savings on the admin budget might give you another £8 on top of the £430. ... My thinking is: if you're the type of Green who wants people to be able to live off basic income, you won't be happy with that, because it's extremely difficult to live off 400 quid a month.
SB: That's really interesting. That is how you would make a start because that involves no increase in taxes. It's a start though. The principle is that it is unconditional, even if it's low, as long as it's unconditional you have established the principle. People will understand what it is. People will get used to having it. Then you can adjust the rates.
BI: Because it's low, and not a complete income, it would not take away the incentive to work. But it gives you flexibility - you don't have to take a really crap job. You can do a part-time job. What are the logistics of why we can't do a basic income experiment inside a single city the way the Europeans can?
?SB: We aren't devolved.
BI: Couldn't a city ask Westminster to experiment?
SB: You could do that, I'm not proposing this, it's just a thought experiment! What you could do is say to the Chancellor ... with the population you have now, take that group of people, we want to take all the welfare payments you're giving to sample of people, give everyone this unconditional payment, we'll run it for two years. But it might makes more sense to do it in another city than London. Somewhere like Bristol or Newcastle, somewhere a bit more settled and maybe also with a higher proportion of people on welfare.
BI: Why would you want that?
SB: Because it's nicer? [Laughs.] But you'd have to draw a line around the population and have it as a cohort.
?BI: Do you have an idea of the costs or savings?
SB: Again, we haven't done the actual working out, since the working tax credits came in.
BI: This has been in your manifesto since 1989!
SB: We had it until 2005, or whenever they brought in the working tax credits, we had a model that people had worked out for us. These things cost money - when you've got a general election next year and you want to work out your housing program, your transport policies. For London it's not something I've got someone on the job for. I could go and look for them, I've got plenty of volunteers.
BI: Do you have staff?
SB: I've got lots of volunteers. I've got lots of people who are experts in policy, who are volunteering who are helping me develop policy. We haven't commissioned research in universities. That's what we need, someone to do that.
BI: There have got to be economists out there who would do this. It hits with the right and the left. Milton Freidman was an early proposer.
?SB: Yes, it's not even a particularly left-wing policy. It appeals to my sense of fair play. I know people in my family who've been in and out of benefits, and it's just horrible, the way people get treated.
BI: Tell me how you became a Green?
?SB: Citizens income is actually one of the reasons I joined. Because in 2001 it was one of our general election policies, we were really pushing it and it massively appealed to me. I've been an environmentalist for a long time.
?BI: What got you into that, way back when?
?SB: I was at school doing GCSEs, A levels in late 1980s, early '90s - that is when we had the first wave of real environmental worry about things like global warming, the ozone hole, Chernobyl, so to me it just seemed like normal - it seemed like this was the way the world was going. There were lots of environmental crises and we were going to solve them
?BI: How old are you?
?SB: I'm 41.
?BI: Ok, you're younger than me then. So do you even remember the European election where the Green Party got 15%?
SB: Yes that was in 1989. When I was doing my GCSEs. Have you ever seen the MORI important issues index? ... people didn't start saying "the environment" until the 70s - it was about 5% of people mentioning it as the population's most important issue. By '89, 35% of people had the environment as their top issue and that's when we did really, really well in the European elections. That's when I was at school learning, so I thought it was normal to be an environmentalist. All these things were important. No one needed to persuade me. I went to a grammar school in Cheltenham. Mine was one of the first schools to go grant-maintained ... quite Thatcherite, I mean it wasn't a right-wing school but it was quite entrepreneurial.
BI: Zac Goldsmith has a green reputation, what are your major differences with him?
SB: He seems to be quite the free-market person. I wrote to him about rent control this summer. His housing policy so far has been very much supply. Supply for people to buy. He's really pushing David Cameron's starter homes thing. He wants a lot of them to be built in London on our public land.
BI: Is that bad?
SB: We do need more supply, but that's not going to solve the problem. He'll say more supply will bring down house prices and it will all be fine. That isn't the case, we've got a bigger problem than that in London. There's infinite demand in London for housing, not to be lived in but for people to just buy and hold as investments. You need to be doing other things as well. And when I suggested rent controls - he just basically said I don't want to interfere with market in that way.
BI: Are you in favour of rent control??
SB: Yes we need some way of keeping the landlords' profit down a little bit, in terms of the rents.
BI: How would it work?
SB: There are various models. Berlin has this new model of rent control where: no one can put up rents beyond 10% of the current market rate in the area, which is going to keep a bit of a lid on rent inflation. I think you can probably just say that they can't be put above CPI or something like that.
?BI: And who would set that rate?
?SB: I think the premium would be set permanently by the mayor on a city by city basis. And then it would probably vary with inflation.
?BI: Are you interested in bringing London in line with New York's rent controls?
?SB: I am. They are different systems. New York's is very long term and very much lower than the market rate, so there's a sort of two-tier system, which is not what you want.
BI: So if I'm a property developer and I know that the city is going to cap the rent I can get out of any building, I'm now hugely dis-incentivised to build. Because I know where my profits will top out.
?SB: There are two ways of making a profit out of development, aren't there? There's your long-term rents, and then there's your appreciating asset that you own. ... we want people to do house-building as a long-term investment. At the moment, in viability assessments the standard rate of profit is now above 20%.
BI: What's a viability assessment?
?SB: When a developer wants to build a set go homes, if it wants to build less than the required amount of affordable housing then it needs to justify that, and it will send in a viability assessment that says we've got to spend this much on the land, this much on construction, we're going to sell the private home for this much, in the market, and then the affordable homes component you wish us to provide will cost this much, and we'll be able to get this much from a housing association, and built into that calculation of whether it's viable or not is the assumption that they will make a profit. And this is from building something and selling it on, by the end of the process they're out of there, they have taken away their profits, at 20%. And you're talking about something like a three-year process basically. ... That's a very, very high rate of profit.
?BI: 20% after three years, that doesn't strike me as that high.
?SB: Well it could be two years, it could be less.
?BI: If you're taking three years of risk with your own money, that's not to be sneezed at.
SB: That's actually quite a high rate of return. We'd rather have people building stuff, sitting there holding it, renting it out to people on a long-term basis, and eventually maybe selling it on, but so that they take a much longer term view of it.
BI: If you tell landlords and property owners that the rents they can get will be capped in some way, you are going dis-incentives them to provide those units for rent.
SB: Yeah we'll dis-incentivise those who are only after a short-term profit, but I think we will attract in new models. We need new models. We need people to be able to set up co-operatives so that they will stay affordable. We want people to be doing co-housing, we want community land trusts to get involved as well. All of that involves dampening down on how much of it is being snapped up by quick profit making.
BI: My other worry about rent control is, and this is the experience of New York, where I have lived, and San Francisco, where I haven't lived but I have friends there, is if you get a rent control flat, you stay there forever. Because you now have zero incentive to ever leave. It's cheaper than the market. You know what the rent is going to be. Essentially those flats are just completely taken off the market. This definitely restricts the liquidity of the market. And in a major way restricts the supply of new flats coming on to the market. Because you get rid of the natural rate of churn. Because people never want to leave. Liquidity is a real thing. The churn, and the velocity of the churn, which also reflects in prices.
?SB: But they're still living there. Well people don't want to leave because these rent control flats are rare. Part of the reason people don't want to leave is they can't just find another one.
?BI: You're right, traditional rent control in New York is becoming rarer. There are two more layers on top of that: rent stabilisation and something else. They're not quite as cheap as rent control. In San Francisco there's a traditional 1950s model - a really significant portion of all the houses are on rent control. ... If you can get in there you are paying pennies on the dollar. Housing is more expensive in San Francisco than anywhere on the planet. And most people will admit it's because of that.
SB: Here we have the opposite problem. Private renters here - one-third have had to move in the last year. Whereas people in council homes, people who own their homes, you're looking at 4% of people over the year. You've got far too little security for people looking for private homes to rent. We need something that helps them to stay for longer. I'd worry about that problem. Rents are out of control, people are having to move all the time, it's not just young people, generation rent, you're talking about families, who are moving with children, children are having to move school, which is incredibly destabilising, and so people do want that security.
?BI: What do you think of Cameron's plan to knock down sink estates?
SB: I don't like the phrase 'sink estates' for one thing. He's been to a council estate, we've seen the hug-a-hoodie photo, but he doesn't seem to understand them at all. I don't know what 'sink estates' he is even talking about. He's named Broadwater Farm, but even there you've got quite a strong community defending parts of it. It's not the worst place in the world. People have pride in living there.
BI: Some are pretty bad. I'm from Liverpool, originally, and I've seen sink estates, where it is absolutely clear that if they were razed to the ground it would be an improvement.
SB: We do know that there were some very, very bad buildings put up in the 60s and some properly corrupt developers, so potentially there are some buildings that need to come down. But I think you've got to do this from the point of view of starting by talking to the residents and getting their absolute 100% consent. I would like to have a ballot before any kind of destruction happens. You are talking about a community and Cameron just doesn't seem to have any sensitivity that to the fact that these places are communities and people have pride in them. At quite a lot of places that get criticised, you go there, and people show you around and point out how good the design is. people go "oh it's ugly" but it's not actually. Once you're inside, the spaces work. People have got planters outside their homes, people have got views. ... Whittington Estate in my ward, these are fantastically designed modernist estates. Google it. People love living there. It's full of architects. ... The idea that you would just knock something down and start again? You're clearing out an existing community, it's a 10-year process, it's incredibly disruptive to the whole area, it's far better to refurbish these places. And also from a Green perspective, when you have a construction process that involves knocking down and building again, it's unbelievably noisy, the dust, why would you do that?
BI: Because of the density issue. One of the problems London clearly has is that it is much, much less dense than Paris or New York. There are fewer people per square mile living here. And one of the great things about New York is that those very tall apartment buildings are incredibly energy efficient because one apartment insulates the next, unlike a house. Whereas in London you have the opposite of that. So if you want better density and better efficiency, then you are going to have to knock down some of these completely crap buildings.
?SB: There are other options. I do agree with you. We need more density in lots of places and a tower block in the middle of an enormous field is not a great use of space. It can be very bleak. And you don't have the density then that you need to support local shopping centres and pubs and things like that, which makes it even worse. There is a really good report by Darren Johnson who's our Assembly Member, about ways of doing the density without destruction. In-fill developments, and putting things on top of existing estates. Doing refurbishment and energy efficiency on the existing floors, and then adding extra floor on top. ... A good chunk of what we need could be done that way. You could do that from a community perspective. You can say to the community, here's some ideas, please can you have a look, see what you think about them. What we would do is create a community homes unit in city hall - there are architects, there are surveyors, there are people who can do the business cases available - and they can put together their own plans. And when you do that, quite often they come up with more new homes than if the architects just do it. Because they know the spaces, they that an in-fill space like a car park or a corner, they know it's unused, so they'll nominate that space down to have more homes in. The architect might not do that because it looks like a bit of open space that the community wanted to use. And if you get communities to nominate their own designs you then don't have - which is a really bad thing that lots of councils have - these three-year planning battles. And endless conflict with the community as well, which wears everybody down
BI: Let's talk about the Tube. You proposed a flat-fare scheme.
?SB: I think it's very unfair that people in outer London pay more to get to work than people in inner London. I think people have very little choice about where they work. And less choice than they used to about where they live. And people who end up in outer London because that's the only place they can afford to rent, they have a lot of their income and savings taken away by travel costs. It kind of doesn't make sense. We've had the flat fare on the bus since 2003 or 2004. It makes more sense to work towards a flat fare for London. It's what New York has. You probably got used to it!
?BI: I find graduated fares outrageous. I think it exacerbates the property problem. In New York, if you want to save some money, you can move out because your transport costs will be the same. But here if you choose to move out you are punished.
SB: Yes. Not only do you spend longer on the Tube but you have to pay for the privilege. It's a response to the housing crisis as well, the fact that people are being forced to move out. ... I've constructed a model with the fare rates and ... their assumptions about fare inflation, their assumptions about passenger growth, and created a model about how much they will be getting each year til 2023. And then I played around with it and had a go to see if flattening was possible and it turns out it is.
BI: So what is the flat fare?
SB: You start by merging zones 5 and 6, and zones 3 and 4, and then the new zone in zone 5 you give a discount as well. This costs about £115 million in the first year, which is a reasonable amount to be saving, and then you let the ones in the centre go up by inflation, + 1% which is the current plan, and then you freeze the ones on the outside. ... You do it gradually. First of all you just make it four zones instead of six, then you keep bringing them together. So by 2023, all the travel cards and all the daily caps are the same.
BI: Why can't you just add up all the fares and divide it by the total number of rides?
SB: If you did it in a revenue neutral way - the flat fare is £3 and that's a fare rise for a lot of people and isn't actually a fair thing to do.
?BI: It's a fare rise in zone 1. But for the people in zone 6 it's a huge discount! Why not be brave about it? Why not just say screw the people in zone 1, they are the richest people! They can pay £3!
?SB: There are many council estates in zone 1 and 2. Another principle I have is that nobody has a fare rise above what's currently paid. ... Except for people in Outer London, if you travel and avoid zone 1 you've got a cheaper fare. So at the end of the process you've got a cheaper fare for avoiding zone 1 and a flat fare for everyone else.
BI: What about pedestrianisation. Should we block off Oxford Street to traffic?
SB: I think we should block off Oxford Street to traffic. There are quite a few streets in the West End that would benefit from that and quite a few town centres outside central London that could benefit from that. ... We need something to replace the congestion charge. ... To really reduce traffic we need a road pricing scheme charging you according to what road you're on, what time of day it is. ... That would raise money and cut traffic, and that enables you to take away more road space.
BI: That's sounds complicated. Let's talk about Uber. For or against?
SB: Suspicious of.
BI: Wrong answer! Why?
SB: There are certain things about it that are good.
BI: Do you use Uber?
SB:No, I have never used Uber. I use public transport. I live in zone 2.
BI: Uber is public transport!
SB: No it isn't! My suspicions about Uber are that it's going to increase traffic. It's actually encouraging people off public transport onto Uber and we don't want that. They are not filling in the gaps between public transport which are mainly in Outer London. I think to some extent they might be attracting traffic into central London and that's really what we don't want, I am worrying about. I would put some sort of controls on the number of drivers registered. I can see that it has a role, cabbies have a role as well, filling the gaps where there is no public transport.
BI: All the cabbies are all in zone 1 as well!
SB: So are the Ubers! ... In practice what I think it's doing is encouraging more trips by car.
BI: Jeremy Corbyn, what do you think?
SB: I am in favour of Jeremy Corbyn! He is part of a series of surges of people into what is basically progressive politics. ... In the last few years we've seen massive surges of people into the Scottish National Party, into the Green Party and then into the Labour Party.
BI: The SNP is a party of the left?
SB: It isn't really but there was a progressive agenda behind the "yes" campaign ... there was a lot of left-wing people, basically progressive people, brought into that campaign. People say aren't there lots of people leaving the Greens for Labour? And actually, it's just more people coming in for the same reasons into a different party.
BI: Labour was supposed to have vetted these things specifically to not allow the Green people in.
SB: I know. Some people joined us a year ago in the surge because we inspired them a bit and then Jeremy Corbyn inspired them a bit. They're not party loyal people. They're just interested in getting involved in activism for the first time probably, and that's great. I think it's all good. We've got a real growth of people wanting to change the world and it's all great.