Universal Basic Income

Chris Stephens Excerpts

Tuesday 13th October 2020 Westminster Hall

[Ronnie Cowan (Inverclyde) (SNP)]

I beg to move,

That this House has considered the introduction of a universal basic income.

I thank the Backbench Business Committee for granting me this opportunity. I regret that this sitting is not fully hybrid and that MPs who are isolating or shielding to protect their health and that of others are in effect barred from taking part. That only increases the pressure on Members to travel when they could work from home and forces those who support us to attend the parliamentary estate, too. It was my first time back on the estate for a wee while and I was delighted to see new signs everywhere saying, “Keep left and keep moving”. I am hoping that that is a new sign from the UK Government.

While writing this speech, I noticed that as soon as I typed in the letters “u” and “n”, my iPad prompted me to select “universal”; when I accepted that, it prompted “basic income”. It appears that my iPad has been paying more attention to me than the UK Government have. It also learns quicker.

Universal basic income is an inclusive scheme that protects and recognises everyone. All adults and children receive a set payment on a regular basis. It is fair. It destigmatises the recipient. People are paid regardless of their circumstances. After all, are all people not created equal?

UBI alleviates poverty and reduces inequality. It strengthens a sense of individual citizenship. It empowers people and facilitates civic partnerships. To quote the UBI Lab Northern Ireland working paper,

“A UBI can be understood to be a right of citizenship—a fair share of the assets we and the generations before us have helped create. It recognises each of our stake, or share, in ‘the commons’ of the earth.”

I find that a truly beautiful concept.

A UBI strengthens social bonds and improves mental health. Nobody would deny that economic instability contributes to poor mental health, yet the current system dangles the threat of sanctions over the heads of recipients, going so far as to drive some to suicide. UBI removes that psychological burden. A UBI will not fund the lifestyle of an MP, but it is a platform on which individuals can add other income without fear of financial repercussions.

The current system ties work to welfare. It can make the transition into work more complex. People should be free to take on part-time or occasional work without strings attached. A UBI affords more flexibility to employee and employer, while acknowledging that employees are empowered and less likely to be exploited. It is permanent. It gives security and peace of mind. It cannot be withdrawn or become conditional, unlike the pensions of hundreds of thousands of WASPI women—Women Against State Pension Inequality—who were cheated out of their pensions by the UK Government. That permanency stimulates entrepreneurship, which can lead to the generation of jobs. It is the poorest in society who will directly benefit most; as we know, they are more likely to spend their money on essential items in their own community, which in turn stimulates local growth.

Prior to covid, the upsurge in interest in UBI was attributed to the gig economy, the increase in automation and the creation of a greater number of people described by Guy Standing as “the precariat”. Covid has accelerated the increase in the numbers of the precariat. Many people who once felt safe now feel vulnerable.

It is the duty of any good Government to protect their citizens—not just in the short term, not just by reacting to unfolding circumstances, but by planning for the long term, for future generations. To that end, pilot projects have already been run in Canada, the USA, Kenya, Brazil, Finland, India, Italy, Uganda and Namibia. Versions of cash transfer projects have been run in Iran, Lebanon, Kuwait, Zambia and Zimbabwe. There are plans for UBI-type schemes in Spain, Switzerland, Germany and Ukraine. I have a simple ask of the Minister: have the UK Government taken any steps to learn anything from any of those countries? And please do not quote the Finnish Finance Minister, who came out against UBI before the results of the Finnish trial were even published.

If the UK Government think it is beneath them to be advised by foreigners, will they back pilot projects in the UK and learn from them? Northern Ireland is asking, Wales is asking, Scotland is asking and England is asking. If ever there was a policy that could be pursued and that would be welcomed across the United Kingdom, UBI is it.

The four pilots proposed in Scotland are all well documented—all we need is the co-operation of the Department for Work and Pensions and Her Majesty’s Revenue and Customs. Those pilots will help us not only to learn about the economics of UBI but to understand the political, strategic, institutional, psychological and ethical feasibility of a UBI.

When we exposed the UK to universal credit, it was plain to see that it had not been thought through fully, and it failed miserably. Ever since then, we have been patching and amending the system. If we had run pilots for universal credit, we would have avoided many of the pitfalls and saved many people from the suffering that it caused.

I claim that UBI reduces crime, gives people more opportunity, improves health and mental wellbeing, improves community relations and contributes to a stronger local economy. Minister, run these pilots across the UK and prove me wrong. I know that the Minister is not a fan of UBI: he will claim that the cost makes it a non-starter. Why even consider it, if we cannot afford it? Why run pilots that might tell us that it is amazing, even magnificent, if we cannot then implement UBI? Well, Minister, let us run the pilots, learn what benefits UBI brings or does not bring, and then we can argue about cost versus outcome. If the Minister is seriously telling me that even if all the benefits of UBI that I am claiming can be proved, he would not move mountains to provide them for the citizens of the United Kingdom, then he is skating on very thin ice.

The NHS did not just materialise out of thin air; it was not dreamt up one wet Wednesday afternoon in the Tea Room or designed on the back of a fag packet. The NHS was introduced on 5 July 1948, but prior to that half of Scotland’s land mass had already been covered by the Highlands and Islands Medical Service, which had been set up in 1913. HIMS acted as a working blueprint for the NHS in Scotland. It was directly funded by the state and it had Ministers centrally in a Scottish Office in Edinburgh. It was a pilot project allowed to develop and grow; it uncovered unforeseen problems and fixed them. It ensured that, on day one of the NHS, the NHS was to all intents and purposes good to go.

There is an interesting aside about HIMS. One of its administrators was from my constituency, a Gourock-born woman called Muriel Ritson. She was the only woman on the Scottish Board of Health in 1919, but by 1942 she was sitting on the Beveridge commission, which helped to establish the NHS. The link is there for us all to see. She had learned her lessons, and she brought that learning to bear many years later. She also attended the school that the hon. Member for North East Fife (Wendy Chamberlain) and I both attended.

Mary Breckenridge, an American, visited Scotland in 1924 and later established the Frontier Nursing Service in Kentucky, based on the HIMS model. But not everyone saw the benefits of HIMS—just like today with UBI, the Conservatives argued against it. Lord Banbury objected to English taxpayers contributing money that would be of medical benefits to Scotland. Here we are, all these years later, with NHS Scotland and the wider UK NHS acting in true UBI-style and supporting us all through the current health crisis. If we had not had the NHS, it would have been too late for us to create it. It was there for us and UBI could have been there for us, too.

If the Minister is not prepared to follow current examples from around the world, then he should be brave—support the pilot projects and lead the world. Yes, it will cost more; it will cost lots of pounds and lots of pence. However, their value will be far higher than that of our current system, and the society that the spending will support is too precious not to exist. Although I do not doubt for one minute that budgets must be balanced, recent times have taught us that when the motivation exists, the purse strings can be loosened.

I will now review quickly the response of the Minister to UBI in a recent Petitions Committee sitting. He had three objections. First, how do we afford it? The Minister explained that the Centre for Social Justice found that giving every working-age adult in the United Kingdom £10,000 per year would cost in the region of £400 billion. He seems to think it is higher, but I question that figure. His argument was that the average universal credit claim was more generous at £16,000 per year, completely ignoring the fact that the UC figure is per household. A household with two parents and two kids do not need £5K per adult and £3K per kid to meet his generous standards. I have just halved his £400 billion in one stroke.

His next question was: how do we deliver it? The simpler the system, the cheaper the delivery—and UBI is simpler. Even if it costs the same as the existing system, we are still no worse off. He went on to boast:

“My Department and HMRC have done exceptional work throughout the pandemic to stand up new services and increase the capacity of existing ones. We have been able to move quickly to support over 9 million people”.

I offer genuine congratulations. That is a job well done. I know my local DWP and the one jobcentre left in my constituency have been superb, but with UBI there would be no need for that. All payments would already be in place. With UBI, the safety net has already been built. We are not building it as we are falling.

[Chris Stephens (Glasgow South West) (SNP)]

Is my hon. Friend as concerned as I am that at the height of lockdown, although the herculean efforts of the DWP staff ensured that people got paid, many people were getting about £60 a month taken off them owing to advance repayments?

[Ronnie Cowan]

That goes back to my original point: that I do not believe universal credit is the solution we are looking for. It has been patched and amended, but when it is put under pressure and there are changes in circumstances, the system is not fleet of foot and able to cope with people’s day-to-day living.

During the Petitions Committee sitting, the Minister turned to the issue of the impact of UBI. He had the temerity to say:

“this is the fundamental case against UBI.”

It was not the cost or the delivery, but the impact of UBI that he did not like. He stated:

“Unlike our UC system, UBI does not target support at those in greater need”.

Finally, he got it right. We do not need to target it—everybody gets it, with no stigma attached. He went on to say that UBI does not

“take into account additional costs faced by many individuals, such as those with a disability or those with childcare responsibilities.”

If he reads the pilot project’s proposals, he will see that they do take those into account.

Then, in sheer desperation, the Minister went for an old chestnut. To put it into perspective, Chair, UBI would be paid to you, me and all Members of this House. Yes it would—and it would be taken back in tax, thank you very much. In attempting to vindicate the current system, the Minister, without a hint of irony, said in his conclusions that the UK Government were

“providing millions to food charities to help get through to those who are struggling”.

Yet if people had UBI, they would not rely on charity from this one nation conservatism-driven Government. People do not want handouts—they do not want charity or the crumbs from the top table. They deserve a platform on which they can build and that allows them to sit at the top table as equals, not to be beholden to their rich benefactors. For the benefit of all four nations in the United Kingdom, will the Minister please support the plans for UBI pilots and allow us to move forward with a progressive welfare system that is practical, compassionate and fit for this century?

--- Later in debate ---

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to see you in the chair, Mr Davies. This has been a fantastic debate in which everyone has come to a consensus; we will see if that lasts as the debate goes on. It was led superbly by my hon. Friend the Member for Inverclyde (Ronnie Cowan), and I very much subscribe to his advice that we should keep left and keep moving—that is something we should all do, and I encourage the Minister to do so. He is shaking his head, for reasons that are beyond understanding. My hon. Friend also said that pilots are being asked for across the UK and should be supported, which is something I will come to later in my remarks.

As someone who sits on the Select Committee on Work and Pensions, I can say that the Committee will be looking at universal basic income. There have already been 20,000 individual submissions not only asking the Committee to look at universal basic income, but supportive of it and describing its benefits. I am struck by just about everyone’s contributions regarding the disadvantages of universal credit, particularly the five-week wait—something the Select Committee is currently looking at—and, of course, the advance repayments model. It beggars belief that at the height of lockdown in May, advance repayments of £60 a month were taken off people. At least 1.6 million universal credit claimants had money taken off them in May this year, which is something that the Government really do need to look at.

By way of background, the Scottish Government confirmed on 21 May 2018 that they would provide £250,000 over two years to support the undertaking of the feasibility study for a universal basic income pilot in Scotland. In June 2020, a group established to explore the feasibility of a citizens’ basic income pilot concluded that while such a pilot was desirable it was not feasible within the current devolved settlement, as the necessary tax powers remained with the UK Government through the Department for Work and Pensions and HMRC. The Scottish Government have written to UK Ministers asking them to engage constructively, and to discuss the next steps in getting the pilots up and running. A petition entitled, “Implement Universal Basic Income to give home & food security through Covid-19”, was considered in an oral evidence session, as my hon. Friend the Member for Inverclyde mentioned, on 17 September this year. In response, the UK Government said that a UBI did not target help on those who needed it most, stressing that additional support had been provided during the coronavirus outbreak with the job retention scheme and changes to statutory sick pay and universal credit. I understand that the Welsh Senedd debated universal basic income on 13 September this year, with a motion calling for the Welsh Government to establish a universal basic income trial in Wales.

We want basic income pilots in Scotland, as well as elsewhere in the UK. That is desirable, but it can be done only with full co-operation and collaboration from the Government. Far too many people across the UK were living with the constant pressure of poverty, even before coronavirus. In the period 2016-19, about 1 million people in Scotland were in poverty, living precarious and insecure lives. That includes people in precarious and insecure work, which the Government need to tackle. It is not right in the 21st century that people are being pushed into destitution and homelessness, having to rely on food banks to survive.

The proposed pilot that the Scottish Government want to introduce would run for three years, with a one-year preparation period. Even with a pilot, it should be understood that such a systematic change to the welfare state could take many years to introduce. Commenting on these matters, the SNP social justice and fairness commission produced a discussion paper, “A Secure Income for All”, which explores the principle of the state providing a secure minimum income, with a more in-depth examination of universal basic income.

As many Members have said, the current situation with covid has exposed pre-existing vulnerabilities and shortcomings in the welfare and social security system. That system is an essential public service, like the national health service, and it should be funded properly and designed to support us all in times of need. Instead, it is our view that the Government have eroded the social safety net over the past decade, with brutal cuts and poverty-inducing policies such as the benefit sanctions regime, the benefit cap, the two-child limit and the bedroom tax. Even with the temporary £20-a-week increase in the universal credit standard allowance, which the UK Government have called generous, people who are out of work are £1,000 a year worse off today compared with 2011. We want that £20-a-week increase to be made permanent, and it is disappointing that the UK Government have refused the right to statutory sick pay to all those told to self-isolate as part of contact tracing.

If we look at the figures on statutory sick pay, the UK Government’s current rate is £94.25 a week, compared with £266 a week in Ireland and £287 a week in countries such as Germany and Austria. The UK Government have the second-lowest rate in the European Union for statutory sick pay. As the hon. Member for Strangford (Jim Shannon) and other Members have said, during the covid period, people whom we would consider to have had a comfortable lifestyle before the pandemic no longer have such a lifestyle, which is one reason why a universal basic income could and should be a solution.

It is indefensible for the Government to obstruct potential solutions to poverty such as basic income pilots. As mentioned by the hon. Member for Edinburgh West (Christine Jardine), there was a call by many political parties for an emergency basic payment to be put in place, to go in people’s pockets and support families during the covid crisis. An emergency basic payment would not be a universal basic income, but would go some way towards ensuring that people had a secure income. That is something which we very much believe the Government need to look at. The 3 million who have been excluded have been referred to in this debate. The Government need to consider an emergency payment going to everyone, particularly as local and regional lockdowns are put in place across these islands.

We certainly encourage a universal basic income. We want to encourage the Department for Work and Pensions to engage with all the devolved Administrations and any local authorities that want to put a basic income pilot in place, wherever they are in these islands. We believe the time has come for that to happen.

--- Later in debate ---

[Will Quince]

I have given way once already; if I can give way again at the end, I will.

As I was saying, the Finnish Finance Minister concluded that there must be conditionality—that is the important point—in the social security system.

This Government have done brilliant work through the pandemic to stand up and bolster services, and to get money to those who need it in all four nations of our United Kingdom. We have supported more than 9 million people through the coronavirus job retention scheme and we have accepted more than 3 million new claims for universal credit. The universal credit system has proven that it is up to the challenge, and replacing it at potentially astronomical cost would provide little benefit to anyone, not least those who rely most on our welfare safety net.

Finally, I want to discuss impact, which is the fundamental case against UBI. The welfare system is a safety net and should be there for those who need it. Unlike universal credit, UBI does not target support at those in greater need or take into account additional costs faced by many individuals, such as those with disabilities or those with childcare responsibilities. To put things into some kind of perspective, UBI would be paid, as the hon. Member for Inverclyde pointed out, to me and all the other Members in the Chamber today and across Parliament. I would much rather that it be spent on supporting those who need it. To claim, as the hon. Gentleman did, that that would simply be taken back in tax is not a valid argument, as I have set out, because that is simply shuffling money around.

The OECD has also been clear about the broader consequences. For most high-income countries, a UBI could increase poverty and negatively affect the poorest, with middle-income households most likely to gain. That is all before we start discussing real outcomes. Evidence suggests that UBI provides a disincentive to employment, and in the Finnish trial the Government have acknowledged—I repeat this, because it is important—the need for conditionality.

[Chris Stephens]

Surely the Finnish model demonstrated that people rejected precarious work and that employers had to increase pay and model terms and conditions. It is just not the case that the Finnish model suggested a disincentive to work.

[Will Quince]

I thank the hon. Gentleman for his intervention and I hear the call that he and other Members across the Chamber make for a UBI pilot, but in rebuttal I say, “Show me the international evidence.” The hon. Member for Inverclyde made reference to numerous pilots that have taken place all over the world, so why does he not demonstrate what he argues for by showing what impact they had, and then showing the evidence of how those countries have gone on to implement UBI?