Universal Basic Income: An idea whose time has come?

Howard Reed and Stewart Lansley

Monday, 23 May 2016

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 ayeisha@compassonline.org.uk. 

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.

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  1. Posted by James Hynes

    I have long been a supporter of a Citizen Income. There is no reason why many of those receiving it should not work to earn more because the state could recover surplus through taxes.

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  2. Posted by roy steele

    Can UBI be applied universally? or is it just a tailored, bespoke concept which will only work in a so called first world City? Have any trials been conducted apart from the one in Holland which is up? Can I use it as a template for my charity friend down in Cameroon?
    That’s what I mean by universal. But my definition of words and those interpreted for me via a Francophile/Pidgin English mediator somehow loses its import when I have to take half the day explaining the meaning of the word ‘universal’, let alone trying to explain the concept itself and ts man vagaries of interpretation.
    You have a situation in my case, where a half-educated bloke [moi] is trying to explain to another even less educated man in Africa, [who doesn’t speak my language or I his] UBI; I am trying to impart highly ethereal ideas of which I know little or nothing to a man who is only looking for a piece of meat to put on the table fr his kids to eat.
    To a large extent this is same as the problem we all face in Europe – no communication of ideas and concepts.
    You can academicise, critique, precis and comment on this UBI till the cows come home and good luck to you all as its a Grand Plan.
    Meanwhile my charity worker in West Africa goes starving for the 5th might on the trot. And a few old soldiers I know sleeping rough under Battersea Bridge. I would like to help but I AM ONLY GOOD ON THE FRONT LINE. Commenting from afar and keeping my hands clean and sterile has never been a strong point of mine.ACTIONS SPEAK LOUDER THAN WORDS.

    Reply
  3. Posted by Kevan Voce

    I think UBI is a good idea – it certainly provides more security for people.
    There are two areas that do need to be looked at though is the effect of Housing Benefit and also the self-employed.

    By retaining Housing Benefit the system is open to fraud and has a negative effect on incentives. UBI can only be introduced, in my opinion, when houses are more affordable. This can then be built into UBI. There would be very little incentive for a lot of people to work if they knew their housing costs were covered and they had £70 odd “spendo” every week.

    Secondly, self-employed people would have little incentive to register their businesses. They would pocket the UBI and do the odd bit here & there cash in hand for pub money.

    I think this proposed system would create an army of UBI ers doing a bit of undeclared cash work and taking UBI and HB. A good study but needs further work.

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