Howard Reed and Stewart Lansley discuss the growing demands for a UBI and how it could be introduced in the UK. You can read and download the full piece here or see below for an excerpt. Please let us know what you think by leaving your comments, or alternatively if you are interested in writing an extended response for our ‘Member’s Thoughts’ blog series, drop us a line at email@example.com.
As we approach the third decade of the 21st century it is becoming clear that norms and attitudes to work bear very little resemblance to those that prevailed when the welfare state was first forged.
Beveridge’s model of national insurance was rooted in a series of simple assumptions: that jobs were full time and permanent, paying enough for the worker (presumed to be male) to support a dependent wife and children; and that illness or layoff were temporary setbacks whose impact could be cushioned by payouts from a system into which each worker had contributed. This model never reflected the reality for all. Some women continued to work; some jobs were casual or seasonal; some wages were too low to support a family; the self-employed did not quite fit. Nevertheless, it had enough traction to be accepted by most of the population as fair and sensible. Nobody wanted to go back to the dark days of the 1930s depression and both left and right accepted it pragmatically as a legitimate foundation for post-war social harmony and economic growth.
Nearly 70 years later, the simple distinctions of the mid-20th century have disintegrated. Women are as likely to work as men; jobs have splintered into assemblages of discrete tasks; training and education are spread along the life course; and the fixed boundaries of the working day and working lifetime have dissolved. In 2014, the Office for National Statistics (ONS) estimated that 1.8 million workers were on contracts that ‘do not guarantee a minimum number of hours’.2 A 2016 survey found 11% of the population aged 16–75 (the equivalent of nearly 5 million people) working for online platforms, paid by the task.3 Growing numbers of British people are piecing together a patchwork livelihood from multiple sources, not knowing from one day to the next if or when they will be paid. For creative workers, on whose innovations an increasingly knowledge-based economy relies, the borderline between unpaid and paid work is fluid and shifting. Today’s brainstorm or jam session may turn into tomorrow’s multi-million pound app or award-winning record. Yet we still have an obsolescent benefit system that attempts to classify people neatly into those binary categories: ‘employed’ or unemployed’; those ‘genuinely seeking work’ or those who are not.
The present system, in short, is no longer fit for purpose. It is cumbersome and expensive to administer and penalises claimants whose messy and complex lives do not fit neatly into its anachronistic categories. But that is not all. It also disadvantages employers who, in a competitive global economy, want to access labour flexibly on demand, and artists and innovators who want to develop new ideas without starving. In other words, it does not just damage social cohesion, it harms the very economy it is supposed to help.
The question is: what can replace it? Cogently marshalling the available evidence, including a summary of the moral arguments, this report demonstrates that there are viable alternatives to the present outdated benefit system.