Universal Basic Income

Debate between Debbie Abrahams and Kate Green

Wednesday 14th September 2016 Westminster Hall

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

As ever, it is a pleasure to serve under your chairmanship, Mr Davies. I start by congratulating the hon. Member for Inverclyde (Ronnie Cowan) on securing this debate, which is most welcome and timely. The contributions that we have heard demonstrate that we are in absolute agreement that our current social security system is not fit for purpose. It is not delivering for claimants, who frankly deserve better, in a whole range of different ways. The Minister and I have exchanged views on that in many debates in the past; the detail is there for everybody to review.

Like the hon. Member for Banff and Buchan (Dr Whiteford), I am open-minded on this issue. I want to see the evidence, and it is very early days yet. We know that the current social security system is not delivering, in particular for people in work on low incomes, who might also go from in-work to out-of-work and back into work. The system is not flexible enough. The rapidly changing labour market is not currently catered for by our social security system. The Bank of England’s chief economist, for example, suggests that 15 million jobs are at risk of automation. These are huge changes, which have been growing over the last 20 years or so. Whether or not those jobs will be replaced by new sectors, we have seen a massive change in the labour market, with zero-hour contracts and insecure, low-paid work—our social security system is just not dealing with that. It is not fit for purpose in today’s labour market and there are huge ramifications for how we adapt and develop our social security system to ensure it can properly respond to the rapidly changing circumstances that workers face, and provide them with the necessary security to build happy and fulfilling working lives.

In the light of those great challenges, the Government’s ongoing failure to implement the universal credit programme is of serious concern, and questions about that were again raised last week. Universal credit was meant to attempt to address some of the challenges around flexible working. Unfortunately, because of the way it has been pared back in recent years, as well as the difficulties with implementation—at great public expense—that has just not happened.

[Kate Green]

Would my hon. Friend accept by contrast that Labour’s working tax credit, after initial teething problems, was very effective in reaching low-paid workers, lifting families out of poverty, making work pay and responding to changing work circumstances?

[Debbie Abrahams]

Absolutely. My hon. Friend has, as ever, hit the nail on the head. I am proud of Labour’s record of lifting nearly 1 million children out of poverty as a result of that policy. It is one of which we should be justifiably proud.

We need to respond to the rapidly changing labour market. The Government’s failure to deliver on the heavily diminished universal credit project has led to considerable problems and it is right that we look at the alternatives out there.

There are, of course, different views on what universal basic income is. At its simplest, it is about all of us having a non-contributory, unconditional lump sum, which would be available to all citizens regardless of means. I would like to explore both the positives and negatives. We have already heard some of the positive arguments, such as its simplicity and the way in which it may lift people out of poverty. Currently, there is very poor take-up of income-related benefits across the country. A mere half of those entitled to income-based jobseeker’s allowance are claiming their entitlement. That might have something to do with the current Government’s sanction regime, but it is undoubtedly affecting the numbers of people experiencing poverty in the UK, which now stands at 13 million people. By offering a simple, single sum to all, UBI may go some way to tackling the poverty that so many of our citizens are facing.

In replacing our complex system of universal contributory and means-tested support with a single, simple mechanism, UBI would also allow for a greater simplification of social security administration, with subsequent savings to the Department’s budget. Again, we really need to look at that.

Secondly—this is a really important point—by offering support to everyone regardless of their circumstances, UBI could go a long way to ensuring that the British public retain trust in the social security system. Over the last six years, we have seen the complete erosion of the social security system and the denigration of claimants. Some of the language that has been used—not by the Minister but by some of his colleagues—is frankly shameful.

The recent Fabian Society report, “For Us All”, demonstrated that the Government give as much tax support to people on high incomes through the shadow welfare of tax reliefs as they do to the poorest in our society. It has been suggested that if we were to replace the Government’s tax reliefs for the wealthy with a single universal payment, the reality that social expenditure benefits us all would be much clearer. It would get us away from the Government’s divisive rhetoric of strivers and skivers. Fundamentally, Labour believes that we should value our social security system, which, like our NHS, is based on the principles of inclusion, support and security for all, should any one of us become sick or disabled, or fall on hard times.

Let me focus on some of the concerns. Alongside those arguments in support of UBI, it is clear that tension could arise between its simplicity and its adequacy in supporting people with vastly differing needs and circumstances, which the hon. Member for Banff and Buchan described. A flat rate could not possibly provide the additional costs associated with disability—approximately an additional £500 a month—which are one of the causes of disabled people being twice as likely to be living in poverty. The Government, with their swingeing cuts, have not recognised that. To allow for variations in need, UBI would need to be supplemented with additional top-ups, increasing its expense and complexity, which is where we get to some of the issues discussed earlier.

My final substantial concern is the cost. A recent report by the Joseph Rowntree Foundation suggested that realising the policy would require not only an increase in income but a considerable shift in the general public’s understanding and knowledge of what and whom a social security system is there for. We know from the British social attitudes survey’s time-series analysis that although superficially there are peaks and troughs of support, when people understand what the system is for, whom it is for and the circumstances in which people make claims, they are a lot more supportive of it, so we need to inform people and extend their understanding.

I welcome this debate and I again thank the hon. Member for Inverclyde for securing it. I look forward to further exploring the strengths of UBI, but we must make informed decisions and evidence-based policy.

Women and the Economy

Debate between Debbie Abrahams and Kate Green

Wednesday 9th December 2015 Commons Chamber

[Kate Green]

My hon. Friend is absolutely right to say that care is one of the sectors in which low-paid women’s jobs are concentrated, whether we are talking about direct employment through our public services, or commissioned services for local government. It will of course be helpful over time to see the national minimum wage—the so-called living wage—increased for those workers, but if local authorities are not funded to meet the costs of that welcome pay increase, we can expect to see pressures elsewhere in the system and, most likely, on the quality of care provided. That, too, will have an impact on women, because they typically provide that family care.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

rose—

[Kate Green]

I give way to my hon. Friend , who knows a great deal about this.

[Debbie Abrahams]

Was my hon. Friend as concerned as I was to hear the Secretary of State for Work and Pensions state on the BBC on Sunday that people on universal credit would not lose a penny, given that we know that a lone parent with one child, working 20 hours per week on the lowest pay, will lose about £2,800 a year from next April?

[Kate Green]

Yes, my hon. Friend is right about that, and I believe that even the Work and Pensions Secretary has now acknowledged that what he said at the weekend was not entirely correct.

As we have been discussing lone parents, the House will be interested to know that the Library says that a lone parent with two children, working 20 hours per week on the so-called national living wage, will lose £2,800 by the end of this Parliament. That is a substantial amount for a family who, by definition, can have only one earner—and often a part-time earner, working part time to enable care to be combined with employment responsibilities. The introduction of the so-called national living wage and free childcare places simply cannot compensate wholly for these benefit cuts; the Institute for Fiscal Studies has said that that is arithmetically impossible. In any event, as I pointed out to the hon. Member for Havant (Mr Mak), the people who gain from the increased minimum wage are not the same people who are losing out.