Universal Basic Income

Rachael Maskell Excerpts

Tuesday 13th October 2020 Westminster Hall

[Rachael Maskell (York Central) (Lab/Co-op)]

It is a pleasure to serve under you as Chair, Mr Davies. I start by saying to both contributors so far that I wholeheartedly agree with the thesis that they set out while also highlighting the practical realities of what a universal basic income could bring.

We live in such an inequitable society—the second most inequitable society that there is. We have 4.5 million people living in poverty today, in one of the richest countries. We know that many have made their millions out of this crisis, but millions have fallen into very stark circumstances. We have heard about the 3.1 million people who have been excluded from any support whatsoever and are desperate at this time.

The unemployment rate in my constituency last year was 2.8%; next year it will be 27%. This is terrifying—one in four people losing their jobs because of the nature of our local economy. The 2.8% was an incredible feat, in a post-industrial city where the manufacturing base was wiped out, with the loss of the rail and chocolate manufacturing jobs, but we now face an unprecedented precipice, and we are worried—terrified—at what lies ahead. We have to think outside the box at a time like this. That is why I believe that York, because of the nature of the economy and the way our city works, would make an ideal pilot for a UBI, or citizen’s wage, as many call it.

We also know that, at the end of this month, many people on furlough today will fall over tomorrow. The reality is that, while wages are currently at 80%, they will drop in areas of high lockdown to 67% and in many areas to nothing. That will mean a longer and longer queue at the jobcentre—none of us wants to see that—or people simply struggling. UBI is not just about economic circumstances; it is about holistically supporting individuals, which is why I am also a convert to such a mechanism. It does not judge or call out, but it does protect. At a time like this, we have to look at how we protect society.

The Prime Minister talks about putting his arms around our society, yet we are not seeing the evidence of that. Many of the economic packages that have come out have been narrow, too late and too little. They do not look at the real, longer-term solutions that we need to look at in this crisis. The packages are short term and have not grappled with the real economic challenges of our age. We have to look at what will sustain us, and not just in the next six months or year—we are talking decades of recovery from this pandemic.

We have to inject the right solutions. Therefore, we should not rush, but move on this path to look deeper into this situation. We have seen the benefits where universality has been applied. We have the pension scheme—too low, I would argue, but it is a scheme that does not judge—and child benefit. Such a solution removes the issue of the undeserving poor, a narrative that has often sat with this Government. It does not judge; it recognises the real challenges. Of course, it should also sit alongside a progressive taxation system—something we desperately need which challenges those with broader shoulders and supports those without that resilience.

At a time when we see our high streets about to topple over, businesses folding, our whole local economy in York and our national economy spiralling out of control, and pp spiralling down with it, we need that safety net. Universal credit has been a good attempt, but it judges, it sanctions and it has caused harm. People have to wait for weeks before they get any money. At the height of the pandemic, it was not just five weeks, it was eight or nine weeks that people in my constituency waited.

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

indicated dissent.

[Rachael Maskell]

The Minister is shaking his head. I talked to my constituents who were offered a loan, to be paid back. I am telling the Minister about cases in my constituency where people waited that length of time to get their hands on any money. They were absolutely desperate and needed to use the food bank. Why are we doing this to people when we have other tools that we can utilise?

That is why I believe that universal basic income will bring the universality, the collective responsibility of society, and the solidarity to see people through this time. I argued for it at the start of the pandemic, seeing what was ahead. I believe ever more strongly that, as poverty encroaches, we must find proper solutions. At the moment many people are struggling to pay heating bills. A constituent came to me about that this week. People cannot afford to feed their families. Often it is the women in the family—the mothers—who do without to make sure their kids get what they need. It is tough. My city is like many other places in facing that.

One of the benefits of universal basic income comes from the fact that at the moment people are in and out of work, sometimes because they must isolate, and sometimes because of the pace of fluctuations in work. People who are self-employed try to get started or to do more work and then, with levels fluctuating, they fall back. Perhaps they have access to workplaces, or perhaps not. If there was a steady income for the self-employed, what a difference it would make to entrepreneurs who want to start a business but need time to build it up and to build a custom base. That would give them the underpinning they need to grow.

As for people on statutory sick pay—as well as those who do not get it—universal basic income would provide more of an underpinning while people have to move in and out of the economy. People on zero-hours contracts get paid—and then they do not get paid. They do not know, from week to week. Universal credit, whatever the Minister will say, is not agile enough to respond to the real economy that people work in. That would not be the case with a universal basic income. Also, people entering training and skills development may move in and out of it, perhaps with different hours at different times. They may or may not be on full-time courses. Universal basic income provides underpinning and does not discriminate. It does not call out disabled people, those who are shielding, or anyone else. It does not judge in that way, but understands. We need a system that understands people.

Something that came through to me clearly when we debated the Coronavirus Act 2020 was that there were opportunities to volunteer during the pandemic. We saw that from the British people in an incredible way at the start of the pandemic. No doubt as we get through the winter crisis together—and it is going to be a hard winter—many people will put their hand up and say, “I will help.” Universal basic income would give employers flexibility, because they would know that their staff would be out volunteering, moving in and out of those opportunities, as we pull together as a society to get through this impossible situation. We have to have that solidarity that was built. Flexibility, built into our ability to sustain ourselves through the crisis, would be underpinned by a universal basic income.

That is why I say do not push it off the table. A recovery UBI would help the economy to grow and establish itself again. It is interesting that the Mayor of London and even Andy Burnham, the Mayor of Greater Manchester, have said that we need to look at UBI. That is my ask of the Minister today: that we look at how to build the foundations of a new, fair economy, which does not discriminate and is built on the principle of recognising that everyone wants to put in, but sometimes people need help. UBI is the fairest way to do that. I ask the Minister whether he will set up a UBI commission to look at how UBI can work in different areas, and at the economic challenges of our age and the flexibility needed to grow a new economy, and to report back to the House on that commission to show how we can build a stronger, better economy and a fairer system for the future.

--- Later in debate ---

[Jim Shannon]

I wholeheartedly agree. I was sympathetic to the really good question that the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) asked the Prime Minister yesterday in the Chamber. I am not saying that because he is sitting across from me; I told him it was a good question at the time. It was about the minimum wage. I understand how it works. There are arguments to reduce the working week to four days and to reduce wages, but if someone on a minimum wage loses wages, they have nowhere to go. This is about every penny they have.

I remember the stories that people in my constituency have told me. They managed everything almost to the last pound for that week. Even a small reduction in what they have will mean that they will not be able to pay their rent or their car off. They may be paying off furniture for their property, too. The whole thing becomes a real difficulty. If somebody takes ill, it becomes a real problem. The hon. Gentleman’s question was pertinent, because I could relate personally to what he was saying. I thank him for that.

In opening the debate, the hon. Member for Inverclyde referred to other schemes. I read in the briefing about the Finnish experiment. It is not all about money. I am conscious of time, so I will come to my conclusion fairly quickly. Those who participated in the Finnish experiment

“were more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness. They also had a more positive perception of their cognitive abilities, i.e. memory…and ability to concentrate.”

Giving people that help improves their quality of life, physically and mentally. We have to look at that, because there is cost otherwise. If the Government or others are not able to help, there are impacts on people’s physical and mental health, which then has to be paid for by the NHS. I suggest that although the Finnish experiment may not be the best example, it did highlight that issue.

As I see every day, those who are under financial pressure and who are worried about their future also face mental stress and difficulty. I meet people every day, every week, in my office—my staff do most of that, to be fair—and recently, when universal credit first came in, I remember that there were great problems. The hon. Member for Glasgow South West (Chris Stephens) and I have spoken about these things on a number of occasions, and we understand that.

[Rachael Maskell]

That brings to mind another aspect of this issue, which is sickness absence from the workplace. We obviously know the impact that has, but if people have the underpinning of a universal basic income, that will help with their rehabilitation and get those people back into work, whatever form of work that is. It may be volunteering experience or it may be through social prescribing, and therefore having a universal basic income could be a real aid to rehabilitation. Does the hon. Gentleman agree that this is another opportunity?

[Jim Shannon]

I certainly do. That is why I brought up the issue of people’s physical and mental experiences—because if we can get people into volunteering or get them back to work and moving up, that will make the Minister’s job a lot easier as well.

The hon. Member for York Central (Rachael Maskell) referred to the five-week period, which turned out to be an eight-week period in many cases. In a way, with all the experiences we had early on with universal credit, we overcame many of those issues, and the Government did as well. I therefore say gently to the Minister that we should perhaps be looking at a methodology for a universal basic income, at least on the basis of a pilot scheme, because with a pilot scheme the Government can perceive the issue, look over it, challenge it and investigate to see whether it is possible. In Northern Ireland, 16% of people—300,000 people—live in poverty, and that is before housing costs, which are enormous. With that in mind, the Northern Ireland Assembly also asked questions on this matter, although I understand that responsibility for the DWP lies here.

We have always had the greatest respect for the Minister, as he knows, and I believe him to be a compassionate person who can understand why we, the hon. Member for Inverclyde, and others have spoken on this topic. We believe there is a necessity for the universal basic income to be looked at through a pilot scheme. I believe it will help others, and therefore, along with others, I ask for that as well.