This Week Labour has been talking about the prospect of UBI if a Labour Government came to power.
A report by Guy Standing for the Progressive Economy Forum UBI Pilots who is deemed the expert in this field published his ideas on how the UK could make this work. This blog will about that discuss this and the flaws in his argument.
Firstly his claims that other pilots have been successful is a matter of opinion, I cant see how this claim can be made, given each of the pilots mentioned operated very differently so therefore are not comparable as they would need to be identical in operational terms. Many have been scrapped and reported as failures.This idea has been around since C 1200 yet none of the previous UK governments have implemented it , even though it has been discussed many times. Why because it was deemed it wouldn’t work. Are Labour digging up a corpse?
The Pilots suggested by Guy Standing are as following:
Five types of basic income pilot that are
• Model A. Under this variant, a sample of people – a whole community defined
as a locality – would be provided with basic incomes, with additional separate
benefits for those with special needs. The basic income would be provided
instead of existing means-tested benefits, with the exception of housing
benefit, which should be retained (or be replaced by an equivalent to
compensate for any loss of the housing element of Universal Credit).
Provisionally, it is proposed that every adult in a selected community would be
provided with £100, with £50 for each child, and with additional separate
benefits for those with disabilities. As indicated later, the selection of the
community should be random and be drawn from a group of low-income
Bearing in mind that existing benefit levels have been allowed to fall in real
terms and that there is nothing optimal about existing tax rates, this model
should be regarded as realistically aspirational, in that it the test would be to
see the impact on the population, recognising that funding such a scheme
nationally would involve a significant cost that would have to be met by tax
increases, diversion of public spending from other uses (such as subsidies and
tax reliefs) or the establishment of a national commons fund as described
earlier. A primary purpose of this Model would be to determine whether the
benefits of such a scheme – such as improved health, reduced stress, more
work and less crime, as found in pilots elsewhere – would merit consideration
of this option in the future.
• Model B. Under this variant, a sample of people – again, preferably all members
of an identifiable locality – would be provided with basic incomes of £70 per
week for working-age adults, and £20 per week for children on top of Child
Benefit. Tax codes for every recipient would become BR, thus imposing the
basic rate of income tax on all earned income below the higher rate tax
threshold. Means-tested benefits would be left in place, and basic incomes
would be added to the means taken into account in their calculation, so each
recipient household’s means-tested benefits would be automatically adjusted
downwards, and their means-tested benefits would also be automatically
adjusted upwards by the changes in net earnings brought about by the tax
code change. Administration of the scheme would be possible if the recipient
community were to be defined by postcode boundaries and the government
was able to instruct HMRC and DWP to make the necessary changes within
the recipient community.
• Model C. Under this variant, a sample of people – again, preferably everybody
in a local community – would be provided with basic income as a supplement
to their existing state benefits. This would be firmly in the spirit of common
dividends, and the per capita amount could be less than in the first case. One
option might be to provide every adult in a community with a tax-free £50 per
week for one year that was not taken into account in determining access to
means-tested benefits. This would strengthen income security and be
progressive, since the amount would represent a larger proportion of the
income of a low-income person than for others.
• Model D. Under this variant, a sample of welfare recipient adults would just
have existing conditions for entitlement to existing means-tested benefits
removed, so as to make the benefits closer to a basic income, notably by
removing forms of behavioural conditionality that permeate Universal Credit
and other benefits at the moment. This type of experiment is close to what is
currently being tested in The Netherlands and Finland, as described in
Appendix A. It would have minimal net cost, and might even save public money.
• Model E. A fifth type of experiment is very different from all the others. This is
sadly relevant to the austerity era, and would be a refinement of an approach
taken in the City of London some years ago. As described in Appendix A, the
gist of the policy was that a group of homeless were given a cash grant instead
of the various measures made available, and it led to most of them obtaining
places to stay, and thus actually saved the council considerable money over
the longer term. Given the horrifying growth of homelessness across the
country, this experiment should be repeated in a few other, randomly chosen
places. It should not be made a national policy, but the results could be taken
into account in formulating and implementing a national basic income system.
To make UBI work in the UK it would take some radical changes not just in thinking ,but with certain groups in society who cannot work such as Disabled People,Carers ,Elderly for a variety of reasons. One annoying trait with all governments is the focus on getting people into jobs, which isn’t a bad idea in itself if they can , but with total disregard to those who cannot, as if it is like some sort of Utopian world view where work is the be all and end all of life. With many on low wage zero hr contracts and not enough FT jobs or skilled workforce to fill current vacancies. Many people are working less than 3 hrs a week but classed as employed by government ,yet complaining about the welfare cost rising and counted as claimants too . Many are grandparents/ parents who are picking up childcare for example or carers which actually saves Governments an absolute fortune in service provision.
For any UBI scheme to work in the UK these marginalized and demonized groups need to be included and additional bolt ons, like disability premiums,PIP, AA,Carers Premiums,Child Elements,Housing Benefit must be retained and set at a realistic level and to cope with modern society after Brexit, if that happens, with rising costs and inflation etc. The figures quoted by Standing are unrealistic in the modern world with AI creeping into the workplace and less than current payments on Universal Credit for some and in Scotland even less money.
A flat rate fits all approach will fail without doubt and plunge many into a worse situation than they are currently facing under Universal Credit. we shouldn’t throw the idea out altogether but if Labour wants this to work, it first needs to Listen to those on the receiving end of the policies put forward not just so called experts. Sanctions and Behavioral Conditionality, the awful WCA/PIP assessment processes that currently are costing a fortune both monetarily and with reported deaths of claimants should be abolished as promised and the rapid rise of homelessness. There should be a claw back process for those who gain employment set at a certain threshold ie: 50k.
Disabled people in particular have higher costs (500mth) because of disability and social care needs, we need to make it possible for those who can work to get jobs, keep mobility vehicles to enable them to get to work , eat healthy food, put clothes on their backs and pay their bills and even a holiday which will all benefit long term costs in other areas as well as make them healthier both mentally and emotionally and initial costings will in the long term cut costs in other areas.
Critics on all sides make wild claims for and against this idea but if well thought out , it might just work! Piloting different approaches are not helpful in some ways as they are costly on both sides of the argument, but a well thought out UBI might work for the many and not the few .
I’m still wary of ‘False Prophetic’ claims of a brave new world of welfare state, in fact I may not live to tell the tale, but this has to be done properly for the generations to come who need support of a safety net just because they Can’t!
For those wishing to read Standings report: https://www.progressiveeconomyforum.com/wp-content/uploads/2019/05/PEF_Piloting_Basic_Income_Guy_Standing.pdf