Food stamps are just capital controls for poor people

If you want to introduce higher prices for poor people, at least do it openly.

The Guardian's Patrick Butler reports that food stamps are to replace the cash payments currently received by vulnerable people in short-term financial crisis. He writes:

Rather than, as now, offering a cash loan, most councils will from April offer new applicants who qualify for emergency assistance a one-off voucher redeemable for goods such as food and nappies.

Many of the 150 local authorities in England running welfare schemes have confirmed that they will issue the vouchers in the form of payment cards, which will be blocked or monitored to prevent the holder using them for alcohol, cigarettes or gambling.

In classic economics-blogging style, here's another news story. Cyprus is to impose capital controls, for a seven-day trial period. The FT's Joshua Chaffin reports:

Capital controls will be deployed to prevent a stampede of withdrawals by panicked depositors when the banks reopen, possibly on Thursday, after a closure that has dragged on for nearly two weeks.

In broad terms, they will limit the ability to withdraw money, or shift it between accounts or across borders, according to officials. The measures might also delay the processing of cheques.

The link is that both measures won't have the absolute effect that their promotors might hope; rather, they impose a huge, uncontrollable and grey-market tariff on attempts to do what people are used to being able to do freely.

The Cypriot capital controls are the more obvious example of this. For the next week, a euro in Cyprus is worth less than a euro elsewhere. How much less, we don't know, and there will probably never be a clear market rate – especially if the controls are lifted in early April, which the people of Cyprus will surely be hoping will happen.

Nonetheless, if a Cypriot finds themselves urgently needing to get a large number of euros out of the country – say, to close a purchase on a house in the French Riviera – it's relatively obvious what they have to do. Offer someone in the "real" eurozone a quantity of euros in Cyprus to spend the money for them. The premium offered depends on the risk that the capital controls will not be lifted, as well as the value our outsider places on euros which can only be spent in Cyprus, but it's fairly doable from a technical point of view.

Of course, if the premium is too high – if you'd need to promise €5m (Cypriot) to get someone to spend €1m (non-Cypriot) – then you'll likely see movement from the grey market to the black market. In other words, suitcases full of money crossing the Adriatic.

Those effects are basically the same as what we will see if food stamps become widespread. It's best to think of food stamps as a separate currency; one which can only be used buy a certain list of items. Just like the Cypriot euro, it has "capital controls" – you can't just walk up to a bureau d'exchange and hand food stamps in and get pound sterling in return. But just like the Cypriot euro, there are ways – easy ways – of getting around them.

The legal way – analogous to the complicated deal to hand over money in two nations – is as simple here as offering someone a £20 food stamp for a £12 bottle of gin. Given most people buy food, that's a relatively good deal for the person who ends up with £8 profit; they essentially get a portion of their groceries paid for by someone in crippling financial need.

Since food stamps are useful for most people, the premium is unlikely to be very high. But if it is, we get to the suitcase-full-of-money option: find someone who'll take food stamps in exchange for "contraband". Given the ease with which 15-year-olds get drunk in this country, it's a fairly good bet that there are a few shops happy to sell booze to people they aren't allowed to. They might charge rip-off prices, knowing that the buyer's hardly going to complain, but they'll do it.

In the end, then, what is the outcome of food stamps? All things considered, they don't force people in financial difficulty to spend their money on "necessities" rather than "luxuries" (with the two categories odiously defined by government, rather than the individuals themselves). Instead, they impose a tariff on purchases of "luxuries" for those people.

The same economic effect could be had more directly by requiring shops to display two prices for booze and fags: a regular price, and a higher price for "poor people". Given the bizarre crossover between those in favour of welfare cards yet against minimum pricing because it hits the poor hardest – a peculiarly Tory type of libertarianism (fauxbertarianism? libertoryanism?) – perhaps making the doublethink explicit might change their minds one way or another.

US style food stamps. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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What is the Scottish Six and why are people getting so upset about it?

The BBC is launching a new Scottish-produced TV channel. And it's already causing a stooshie. 

At first glance, it should be brilliant news. The BBC’s director general Tony Hall has unveiled a new TV channel for Scotland, due to start broadcasting in 2018. 

It will be called BBC Scotland (a label that already exists, confusingly), and means the creation of 80 new journalism jobs – a boon at a time when the traditional news industry is floundering. While the details are yet to be finalised, it means that a Scottish watcher will be able to turn on the TV at 7pm and flick to a Scottish-produced channel. Crucially, it will have a flagship news programme at 9pm.

The BBC is pumping £19m into the channel and digital developments, as well as another £1.2m for BBC Alba (Scotland’s Gaelic language channel). What’s not to like? 

One thing in particular, according to the Scottish National Party. The announcement of a 9pm news show effectively kills the idea of replacing News at Six. 

Leading the charge for “a Scottish Six” is John Nicolson, the party’s Westminster spokesman for culture, media and sport. A former BBC presenter himself, Nicolson has tried to frame the debate as a practical one. 

“Look at the running order this week,” he told the Today programme:

“You’ll see that the BBC network six o’clock news repeatedly runs leading on an English transport story, an English health story, an English education story. 

“That’s right and proper because of the majority of audience in the UK are English, so absolutely reasonable that English people should want to see and hear English news, but equally reasonable that Scottish people should not want to listen to English news.”

The SNP’s opponents think they spy fake nationalist outrage. The Scottish Conservatives shadow culture secretary Jackson Carlaw declared: “Only they, with their inherent and serial grievance agenda, could find fault with this.” 

The critics have a point. The BBC has become a favourite punch bag for cybernats. It has been accused of everything from doctored editing during the independence referendum to shrinking Scotland on the weather map

Meanwhile, the SNP’s claim to want more coverage of Scottish policies seems rather hollow at a time when at least one journalist claims the party is trying to silence him

As for the BBC, it says the main reason for not scrapping News at Six is simply that it is popular in Scotland already. 

But if the SNP is playing it up, there is no doubt that TV schedules can be annoying north of the border. When I was a kid, at a time when #indyref was only a twinkle in Alex Salmond’s eye, one of my main grievances was that children’s TV was all scheduled to match the English holidays. I’ve migrated to London and BBC iPlayer, but I do feel truly sorry for anyone in Glasgow who has lost half an hour to hearing about Southern Railways. 

Then there's the fact that the Scottish government could do with more scrutiny. 

“I’m at odds with most Labour folk on this, as I’ve long been a strong supporter of a Scottish Six,” Duncan Hothershall, who edits the Scottish website Labour Hame. “I think the lack of a Scotland-centred but internationally focused news programme is one of the factors that has allowed SNP ministers to avoid responsibility for failures.”

Still, he’s not about to complain if that scrutiny happens at nine o’clock instead: “I think the news this morning of a new evening channel with a one hour news programme exactly as the Scottish Six was envisaged is enormously good news.”

Let the reporting begin. 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.