Time for UBI?

Helen Smith, Beaconsfield CLP, and David Wain, Hayes & Harlington CLP, look at the pros and cons of UBI.

Universal Basic Income (UBI) means giving unconditional cash payments to all citizens whatever their income, either replacing or complimenting other targeted welfare benefits or tax allowances. Supporters of UBI argue that the policy is the most effective way to keep every household above the breadline by helping to tackle poverty in Foodbank Britain, encouraging more flexible working practices and allowing some people to devote more time to caring for older or younger family members. Campaigners also argue that UBI is more effective and less bureaucratic than most targeted support schemes, which often fail to reach all their intended recipients.

Why now?

During the recent lockdown due to Covid-19, there has been a temporary furlough scheme with the government paying a high proportion of many people’s wages so they won’t have to be laid off because they know that would be even worse for the economy in the long run. This has opened people’s minds to the concept of some sort of a UBI and there has been growing interest in it around the world as millions of households have taken an economic hit from the Coronavirus lockdown. Some advocates also argue that UBI would prevent those who need income to survive from going to work when sick and risking spreading Covid-19 further.

UBI has been endorsed by thinkers and politicians from Tom Paine to Barack Obama, and from Mark Zuckerberg who invented Facebook which has made him a lot of money, but who said we should explore UBI so that everyone has a cushion to try new ideas. Incredibly, UBI was even favoured by Republican Richard Nixon of Watergate fame! The idea of a guaranteed income was pushed into a Bill when he was US President in 1970, passed the House of Representatives and only failed in the Senate because Democrats sought a higher guaranteed income.

What would we spend it on?

The amount paid would not be large. It would not mean there is no incentive, financial or otherwise, for people to look for a job. It would bring more equality, especially to women and single parents as the money is paid to each individual, not per family, so the money couldn’t be kept by one person as can happen today. UBI would therefore mean more money going to children, as in practice most people would prioritise their children’s needs for housing, clothing, items for school, above everything else and Child Benefit is only enough to help with some of these costs. Child Benefit is currently the nearest thing we have to UBI in that it’s paid regularly to the nominated parent or guardian so it will go directly to the children, but it is for children not adults.

Considerations against

On the other hand, would  having UBI mean people are less motivated to get jobs or do what’s needed to change their situation? Do we in fact need an element of compulsion such as the current threat of our dole money being taken away when we are unemployed if we do not do what they tell us to do to seek jobs? You only have to watch Ken Loach’s brilliant 2016 film I, Daniel Blake to know why the current benefit sanctions are an extremely bad, cruel and even life-threatening idea which has been well documented here in Briefing during the austerity period.

There is also the unavoidable fact that UBI would also go to the rich. As with Winter Fuel Allowance, if you don’t need it you can’t pay it back to the government (some honest people have tried!) but you could give it to a charity or a family member. There’s nothing to stop you doing that so there’s always an element of choice there.

One more serious point against having UBI is that it could encourage people smugglers who sometimes tell migrants and asylum seekers that the streets are paved with gold here as it is. Although possibly it wouldn’t be paid until they are accepted as citizens here either through work or a valid asylum claim. It might depend whether neighbouring countries have UBI as well.