Universal Basic Income
(2 years, 6 months ago)
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Angela Crawley (Lanark and Hamilton East) (SNP)
I beg to move,
That this House has considered the potential merits of a universal basic income.
It is a pleasure to serve under your chairmanship, Ms McVey. I thank my hon. Friend the Member for Inverclyde (Ronnie Cowan) for his contributions in this place on the issue of a universal basic income. There is no better time to reopen the discussion on this subject. We are up to our necks in the cost of living crisis, which is pushing households across this country further into poverty and destitution. We need change, and we need it now.
Over more than a decade, the Conservative Government have carefully crafted a welfare system that designates recipients as being deserving of payments only if they meet conditions. I appreciate that the idea of implementing a universal basic income and removing the conditions on welfare payments would not normally sit comfortably with the Government. However, it seems that the Conservative party has had a change of heart. On Monday 6 June at the Treasury Committee, when the Chancellor of the Exchequer was questioned on the universal nature of energy bill discounts, which will leave third home owners £1,200 better off, he said:
“there will be some people who do not need the help. That is, unfortunately, the consequence of having to do policy in practical terms.”
He said that, having looked at all the options, the Government decided that the discount was “the most effective way” of reaching a “large number of people” and helping them when they needed it. Clearly, this Government have had a change of heart, and are open to universal policies, depending on who benefits, so it seems that the biggest barrier to implementing a universal basic income is ideological. I urge the Minister to consider extending his party’s new, compassionate approach to the benefits system, and to abandon the cruel and unforgiving system that depicts desperate people as undeserving.
I come to the benefits of a universal basic income. As we have heard many times here and in the main Chamber, a universal basic income would mean that every citizen was provided with a subsistence income. It would mean secure, regular payments into every individual’s bank account, without threat of disruption. In real terms, it would ensure that every person in this country was always able to afford food, keep a roof over their head, provide for their children and have a minimum standard of living.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
In principle, the concept of a universal basic income is promising, but just so that I understand, will the hon. Lady answer these questions? Under her definition, would the universal basic income be the only income that a person received? Would they receive additional benefits if they were unemployed or had disabilities? At what amount would she consider setting a universal basic income?
Angela Crawley
I thank the hon. Member for addressing those points. To be clear, we already have a system that recognises that individuals will need an approach that is tailored to their needs. Those who have disabilities will need additional support. Those who need additional support because of family requirements will have it. We have a system that already accepts that.
This is about acknowledging that every single person has the right not to be destitute. That is a basic, fundamental tenet. I find it uncomfortable that anyone in this place would consider it a radical motivation. A recent study by the University of York found that a universal basic income would cut poverty by more than half, bringing it to the lowest level for 60 years. It would cut child poverty and pensioner poverty by more than half and working age poverty by a quarter. It would be a driver of economic equality. Further research has shown that it would stimulate local economic growth. Introducing a universal basic income would allow us to incentivise people into work properly, and to move away from the current focus on cruelly sanctioning those who are desperate. Instead of our pushing people into precarious forms of employment and pretending that work programmes are actually working, a universal basic income would provide financial security. It would enable everyone to pursue employment that was more suitable for their lifestyle, hopes and ambitions, and it would allow everyone to engage in socially and personally productive activities, such as community or voluntary work, care giving, or entrepreneurial or creative activities.
The Scottish Government explored the feasibility of introducing a universal basic income, but found that it was impossible under the devolved settlement. With independence, the Scottish Government could be ambitious and look to a future where we could ensure that every citizen in Scotland had the support they needed. We do not have those powers yet and, without independence, we will not have them.
Instead, the Scottish Government commissioned research on a minimum income guarantee, which would transform Scotland’s fight against poverty. Rather than leaving those in need at the mercy of universal credit sanctions, it would at least guarantee that they did not drop below the poverty line. One of the Government’s core contentions, when this matter was last brought to the House, was the expense of setting up such a system. However, the UK Government already have the technology to implement a minimum income guarantee. We already have the tapers in place for the universal credit system, which has markers to ensure that those who need additional funds will get them; that answers the hon. Member for Central Suffolk and North Ipswich (Dr Poulter).
Universal credit was supposed to streamline and simplify the welfare system. Instead, it has led to the Government ploughing excessive funds and resources into empty work programmes, processing sanctions, and a target-driven jobcentre workforce unable to help those most at risk of poverty. If the Government wish to cut 90,000 civil service staff, and expect to keep this very complex welfare system running, it has another thing coming.
I ask the Minister to read through the numerous studies that have shown the benefits of introducing a universal basic income; to keep a close eye on the Scottish Government’s work on the minimum income guarantee; and to explain how the flawed and damaging universal credit system is in any way an adequate system by comparison.
The country is in crisis. As the cost of living crisis continues, we cannot ignore the worsening mental health crisis. The two are most definitely linked, and introducing a universal basic income would help to alleviate both. Innumerable studies show the detrimental impact of welfare conditionality and its impact on the mental health of welfare recipients. I do not think anyone here is in a position to argue with that. A universal basic income pilot scheme, conducted in Germany and Finland, showed that reform of the welfare state directly impacts the mental health of welfare recipients and their overall mental and physical wellbeing.
The Mental Health Foundation found that children who receive payments were less likely to use drugs and alcohol, more likely to stay in education, and more likely to have improved physical and mental health outcomes. The Finnish system showed that universal basic income helps improve cognitive functioning in adults, reduces feelings of anxiety and depression, and generally increases overall life satisfaction.
A universal basic income is a holistic policy that will have holistic effects across a whole area of social policy. Studies have shown that a universal basic income, although expensive in the beginning, pays for itself over time, through its far-reaching impacts.
Gareth Davies (Grantham and Stamford) (Con)
I congratulate the hon. Lady on securing the debate and giving a considered and well thought-out speech. Will she clarify that point on expense? The cost of this programme, even if it were rolled out using a modest income, would be around £316 billion annually, according to one study. Can she clarify what her research has shown about the overall annual cost?
Angela Crawley
As the hon. Gentleman will appreciate, there are no studies that can show comprehensively the long-term benefits of such a scheme, because there has been no extensively researched pilot here or in most countries. I think we can all agree that when an individual does not have to think about how they will fund their next meal, pay for the electricity or subsist and survive, they can start to think about their life chances and opportunities, and can begin to fulfil their ambitions in life. There is so much to be gained from a pilot, which would give the hon. Gentleman the evidence, studies and statistics that he asks for.
A universal and destigmatising, more compassionate welfare system would decrease depression and anxiety rates. It is not over-dramatic to say that it would save lives. If the Government are committed to addressing the mental health crisis, will they reform the system responsible for pushing so many people to the edge? I end my contribution by calling on the Government to consider seriously the prospect of a universal basic income. I do not believe such a policy is as radical or unattainable as it seems. We already have the technology and a substantial Department for Work and Pensions budget that could cater for most of these measures. It is wasted, however, on empty work programmes and on processing sanctions, which scar people mentally and financially and abandon those most at risk to life in poverty.
Universal basic income represents a fairer system. I encourage the Minister and his Department to consider establishing a pilot scheme, and to speak to the results rather than to the rhetoric. The biggest issue is cutting through the damaging Tory ideology that people have to work for their basic human rights. I urge the Minister to rethink his Government’s approach, and to seriously consider a universal basic income pilot scheme.
Several hon. Members rose—
Esther McVey (in the Chair)
Order. I am mindful that there will be a vote at about 5.5 pm, and we want to get to the Front-Bench speakers no later than 5.10 pm.
Beth Winter (Cynon Valley) (Lab)
Thank you, Ms McVey. The actions of this Government are really hammering working people and the working class, and are driving more and more people into poverty. People’s incomes and living standards are under attack on many fronts, as we face the worst cost of living crisis in living memory.
The Government have imposed cut after cut to social security benefits, and increased benefits by only a paltry 3.1% in April, though inflation stands at 10%. We have seen freeze after freeze of public sector pay. We clapped for our key workers—be they care workers, Government workers or NHS workers—throughout lockdown, but they have not been rewarded. There is a debate in the main Chamber about the National Union of Rail, Maritime and Transport Workers, who have been forced to strike next week because their reasonable demands for better pay and terms and conditions have fallen on deaf ears. On pensions, the Tory Government have broken the triple lock.
All that has had a devastating impact on far too many people. Some 14.5 million people live in poverty. That includes the 4.3 million children who live in relative poverty—nine in every classroom of 30 children—and the 10 million people who use food banks. We should be angry that we, the fifth richest nation on the planet, have allowed this situation to arise and become normalised. That is a political choice.
There are alternatives, however, and universal basic income is one of them. We must do everything we can to achieve a fairer and more resilient society as we come out of the pandemic. A vital part of that is replacing our dysfunctional benefits system with one that provides financial security for everyone. UBI—an unconditional and regular cash payment to everybody, regardless of their income—is gaining significant traction as a solution to many of those issues. It is underpinned by the principle of universality, which I endorse. It would provide everyone with enough to cover the basic cost of living, and would ensure that financial security was a basic human right.
Universal basic income has lots of merits. It enables us to ensure that people’s human right to an appropriate amount of money to live on is met; it overcomes the negative features of means testing, particularly the stigma associated with claiming social security benefits; it is simple, unlike the current complex welfare system; and it would stimulate demand in the economy by putting money in people’s pockets.
I am particularly proud of the universal basic income campaign in my country of Wales. That grassroots, bottom-up campaign, led by a gentleman called Jonathan Williams of UBI Lab Wales, has been successful in getting constituency Labour parties, local authorities and Assembly Members to sign pledges in support of universal basic income, and it has also participated in various groups here in Parliament.
Hywel Williams (Arfon) (PC)
I apologise for my late arrival to the debate; I was detained elsewhere. Does the hon. Lady welcome, as I do, the small-scale pilot scheme that is being run by the Welsh Government? It will target money at 250 care leavers, who are a particularly vulnerable group. I look forward to the results of that pilot. However, it will take three years, and I am sure that she will agree that we need something larger scale, very quickly.
Beth Winter
I do agree, and thank the hon. Member for that intervention. I will come on to the universal basic income pilot scheme that the Welsh Government are introducing in the next few weeks. Mark Drakeford, the First Minister of Wales, is a strong proponent of universal basic income, and it is part of the radical and more progressive policies, particularly when compared to those of the UK Government, being pursued by the Welsh Government. It forms part of a co-operation agreement between the Labour party and Plaid Cymru that I fully support. The pilot is as ambitious as can be expected, given the financial constraints placed on the Welsh Government by the UK Government; the financial settlement is decided by the Barnett formula. From what I understand, attempts by the Welsh Government to discuss potential assistance from the UK Government fell on deaf ears.
I welcome the pilot, which gives care leavers £1,600 per month. That amount is significantly higher than the amount in any other basic income pilot globally. It is broadly equivalent to the real living wage. There is a comprehensive methodology associated with that, and there will be a very robust evaluation process. Michael Marmot is one of the advisers, as is Guy Standing, who is world-renowned on UBI. The pilot has a technical advisory panel. It is a very well thought-out process that goes as far as it can. Even I would admit that it has some limitations, but it is trying to look at progressive, radical and alternative ways of supporting people.
Any pilot or roll out of UBI must form part of a much broader transformative agenda. We need a benefits system that ensures that everyone has equal access to a safety net that will ensure that they can meet their needs, and we need a progressive tax system. I propose the reinstatement of the £20 universal credit uplift, and that benefits and wages be inflation-proofed. I am a proponent of the wealth tax. UBI must form part of a more transformative agenda. I will continue to work alongside colleagues in Parliament, but crucially, I will work outside the bubble of Parliament with organisations such as Anti-Poverty Alliance in Wales, Child Poverty Action Group and trade unions—in particular, Unite Wales community—to promote radial, alternative and socialist policies. I want to celebrate and congratulate the Welsh Government on the ambitious pilot. Diolch yn fawr.
Gareth Davies (Grantham and Stamford) (Con)
It is a pleasure to serve under your chairmanship, Ms McVey. I congratulate the hon. Member for Lanark and Hamilton East (Angela Crawley) and every Member here. I welcome any debate about moving our economy forward and helping the most vulnerable in society. However, I am afraid, although it may come as a complete shock, that I disagree with the proposal of UBI. I want to set out four reasons why, in good humour and constructively.
First, there is a great deal of uncertainty about how much UBI would cost taxpayers and the British Exchequer. “Universal” means “everybody”; in our country, over 65 million people will receive some form of income under a universal basic income policy. If we provided just a basic income—even a modest income—it would result in hundreds of billions of pounds of extra money being spent. We would have to find that money from other Departments, or raise new money through higher taxes. That is a perfectly noble argument to make, but it is a fact of running a budget that the money has to be taken from somewhere else, or it has to be raised.
Gareth Davies
I am not sure what the argument of the Welsh Government or the Liberal Democrats is, but I am happy to hear it.
Christine Jardine
I also apologise for being a little late; I was caught unawares by the broken lifts in Portcullis House. Does the hon. Gentleman accept that the universal basic income is still a concept—an idea? Those of us who earn much more than what it might offer should perhaps not look for any payment at all. We should accept that we already have that income. We can calculate how much it would cost to give it to everybody, but that might not be in line with the spirit of the universal basic income.
Gareth Davies
It is beyond the bounds of my intellect to debate what “universal” means. I take it to mean, “being received by everyone.” It could be up to people to give it back, but as we have seen in recent policies, that does not always happen.
Hywel Williams
I do not want to be argumentative, but the Chancellor has agreed to give us all, including everyone here, the princely sum of £400, so the principle is accepted by Conservative Members, although I agree that there might be rather larger sums involved in the universal basic income. We have talked about the gross cost, but we might be able to net off a considerable amount of money in view of the wellbeing, better health and happiness, and everything else that comes with having a proper income.
Gareth Davies
The hon. Member for Lanark and Hamilton East (Angela Crawley), who introduced the debate, made the point that the Conservatives recently implemented a universal policy. She will be aware, as will the hon. Member for Arfon (Hywel Williams), that in exceptional circumstances—be it the first pandemic in over 100 years, or a national crisis in energy prices—we would expect the Government to protect as many people as possible, and to act at pace. I accept that point, but that is not what we are talking about today, which is, as I understand it, a complete and permanent root-and-branch reform of our welfare system.
Several hon. Members rose—
Gareth Davies
I will make some progress, if that is all right; I am sure that colleagues will disagree with other points that I make. That was my first point, about cost.
My second point is that a universal basic income could exacerbate, not alleviate, inequality. Under a universal system, everybody would receive the payment. Millionaires would receive a cheque through the post. Even an RMT driver on £70,000 a year would receive a cheque. There is, however—I would like the Minister to address this—a point to be made about the need to simplify our benefits system. I accept that, having dealt with hundreds of cases in my constituency. A lot of the time, vulnerable members of society are not aware of all the many benefits that are available to them. I would endorse any effort that the Minister made to inform people of them, and to simplify our benefit system. As a universal system would exacerbate inequality and give billionaires and millionaires a cheque through the post that they did not need, I cannot accept this policy suggestion.
Beth Winter
If the hon. Gentleman had listened to what I said, he would have heard me say that the policy would have to be part of a more general transformative agenda. I was here yesterday, speaking in a debate on a wealth tax. According the Wealth Tax Commission, such a tax would raise £260 billion. Does he agree that that would be a good way of raising funding?
Gareth Davies
It will shock the hon. Lady to hear that I do not agree. We are going a little off-course, but on a wealth tax, a lot of people invest in our country, and a lot of people start from nothing and go on to achieve great things. I do not want to hamper their ambition for a better life, and their aim of setting up a business and employing lots of people. A wealth tax would not only put people off from investing in and coming to this country, but dissuade people such as my dad, who is not a particularly rich man, from doing what he did: he set up a business because he wanted to do better for himself and his family. He ended up employing a lot of people. A wealth tax is not the way forward, in my view. Incentivising economic growth and the dignity of work is the way to go.
That brings me to my third point. Time and again, the dignity of work and the security of a regular pay cheque have been proven to be the best way out of poverty. However, people in work do not just get an income; they get so much more. They get friends; sometimes they meet their wives. They get meaning in life and a purpose. The dignity of work gives people things to get up for in the morning.
The work environment and the people who we work with add so much to our lives, but jobs also give us skills that develop over time. I am afraid that I disagree with my friends from the Scottish National party about the effect of introducing a universal basic income, which will dissuade people from going to work. It will not encourage work in the way that they have said it will.
Ronnie Cowan (Inverclyde) (SNP)
There is absolutely no evidence from any pilot programme from anywhere in the world that shows that people are indolent and do not want to work. In fact, the current welfare system punishes people for going back to work. As for the basic income, I am not taking people’s basic income away if they go and get some part-time work or to go back to university to study, so it actually encourages them and gives them the confidence to go back into work.
Gareth Davies
The hon. Member makes a reasonable point about evidence, but I will point out to him that there is also no evidence of universal basic income working anywhere in the world. The hon. Member for Lanark and Hamilton East—
Gareth Davies
I can pre-empt it. The hon. Lady rattled off a number of examples—I will hurry up with my speech because I am being asked to move on, although I have taken a number of interventions, which will hopefully be acknowledged.
There have been a number of studies and pilots, not least the one in Wales that is going on at the moment, but not one has been executed. There is not one example from around the world that we can point to where universal basic income has been implemented. The reason is that, although such pilots may show some benefits for mental health, wellbeing and other points, not one of them has not shown any Government around the world that universal basic income is the right model for alleviating poverty in the future. [Interruption.] I am afraid that I will end my speech here, by saying thanks to you, Ms McVey, and thanks to everybody for listening. I feel a little alone on this side of the Chamber, but I am pretty sure that the British people are with me.
Christine Jardine (Edinburgh West) (LD)
It is a pleasure to serve under your chairmanship, Ms McVey.
We are living in unprecedented times—although I am loth to say that, because every time that I have said it in the past two years, things have got worse. However, we are living in unprecedented times, and the problems we face now demand very different and potentially more far-reaching solutions than anything this country has attempted since the end of the second world war—or, perhaps there is no evidence from anywhere else in the world, and we might need to be first.
Now more than ever, we see clearly how easily any of us could find ourselves needing support. There is a generation out there who had no thought that they might ever need benefits, because they had good, well-paid jobs, but they are seeing that that now is no security. In my constituency of Edinburgh West, foodbanks are telling me that the people who used to bring donations are now themselves coming for help. So it can happen to any of us: that we would need support and perhaps find none.
Sadly, we are learning that the welfare state, which has served us so well for seven decades, is not fully equipped for the new reality that is the consequence of the series of crises that we have faced in the past two years. During covid, I spoke to too many people for whom the many Government schemes offering furlough, business grants or support for the self-employed simply did not provide support. Coronavirus made no exception in who it attacked, yet the Government were unable to say the same about who they supported. Yes, we have heard examples today of payments that are now being made to everybody, but the Government repeatedly tell us that they cannot help everyone all the time.
I do not think that is good enough, but I recognise that what we face now is a mammoth task. But we have to find a way. We cannot lose sight of the question that so many people will face this coming winter: how will they feed their family, keep a roof above their heads and stay warm? When even the welfare state, which generations in this country have worked hard to maintain, is not able to do that, we have to accept that the time has perhaps come to do things differently. What has become abundantly clear is that what has been missing throughout all these crises is a crucial element of universal protection—something that perhaps none of us realised we would need.
The hon. Member for Grantham and Stamford (Gareth Davies) said that universal basic income does not exist anywhere in the world and asked how could we provide it. In 1942, Beveridge’s vision did not exist, but it is undoubtably one of those iconic British systems of which we are rightly proud. Because that generation took the risk, we benefited. Now we need to take the risk so that future generations can benefit and to realise that we need a new vision to equip us for the 21st century and the very different challenges it brings.
The concept of a universal basic income, a guaranteed basic income or a universal right to a standard of living that looks at the country and says that everybody should be able to be sure that they will have food on the table, a roof over their heads and some warmth in the winter. That is what we are talking about: the principle. We are not talking necessarily about sending everybody cheques every month, and millionaires getting cheques. We are talking about looking at people and seeing if their standard of living, income and quality of life reaches a basic level. That is what we are talking about today.
As a constituency MP, with every passing day and every desperate phone call from someone in trouble who is frantically searching for a financial lifeboat that does not exist, I become more convinced that some form of universal basic income has to be the solution in this country. Nobody should be left behind. Moving forward after the pandemic and this cost of living crisis, unemployment and financial insecurity will be major challenges for any Government. A basic income, a basic standard of living or a guaranteed income will be the best, fairest and simplest way to safeguard the most vulnerable in society and care for those who need it.
Hywel Williams
Given that we are talking in high terms and with a breadth of vision here, and apropos what the hon. Member for Grantham and Stamford (Gareth Davies) said about the dignity of work, we must crack this paradox whereby it is said that to get the poor to work harder, we must provide them with less support, and to get the rich to work harder, we must provide them with other support, such as cutting their taxes. We need a much more universal view of income support and dignity for everyone.
Esther McVey (in the Chair)
The sitting is resumed and the debate may continue until 5.55 pm.
Christine Jardine
I agree wholeheartedly with the comments from the hon. Member for Arfon (Hywel Williams), which are very welcome.
I will wind up simply by saying that in the current circumstances, with the series of crises we are facing, including the cost of living emergency, we must find a way to free people from the insecurity and anxiety that they face so often. If that means we have to try more than one way of providing and ensuring a universal basic income, a guaranteed standard of living or whatever we want to call it, we have to do so. We simply have to find a way and ensure that this generation does not let down future ones.
Jim Shannon (Strangford) (DUP)
May I say at the outset how pleased I am that the hon. Member for Lanark and Hamilton East (Angela Crawley) has brought this issue forward? I fully support what she is trying to achieve. Everything that the hon. Member for Edinburgh West (Christine Jardine) has just said supports my thoughts as well.
I say respectfully that we do not always hear from someone with an opinion that is from what we are putting forward here, so I am pleased to see the hon. Member for Grantham and Stamford (Gareth Davies) in his place and arguing his point, which is the right thing to do. I probably do not agree with much of it, but that is not the point. The point is that the hon. Gentleman had the courage to come here and say his piece, which is something I admire in anybody.
I am also pleased to see the Minister in his place, because I know that he always puts forward his point of view compassionately and respectfully. We would hope that the Minister might agree with us—we will wait to see whether that is possible—but we will make our points.
I have highlighted in this House numerous times over the past few weeks that I have real concerns about the working poor. Maybe that is because—I say this for no other reason than that it is factual—when I was a young boy growing up, we did not have very much. We did not have many goods or toys, but we always had plenty of love in the house from our parents. I say that because it may give a perspective on those who do not have much today. That is the reason I have come here to speak in support of what the hon. Member for Lanark and Hamilton East has put forward.
For those who were working hard this time last year but barely making ends meet, increasing costs mean difficult choices—poverty is staring them straight in the eye. For example, how do parents explain to a seven-year-old why a school trip to the local aquarium is not accessible, and why they will have to stay in school with another class while everyone else’s parents pay the £11? How do they get across to the child the fact that the school only informed them mid-month and they were expected to pay within the week, that Mummy literally does not have a spare pound until the child benefit comes in, and that the money usually goes towards topping up the electricity, as it does today more than ever? If that sounds far-fetched to some people, I can assure them that it happened in my office just last week. A member of my staff stepped in and paid that amount for a parent who had come in for a food voucher and broke their heart with that story.
The three hon. Ladies who spoke—the hon. Members for Edinburgh West, for Lanark and Hamilton East, and for Cynon Valley (Beth Winter)—reiterated the importance of food banks. That parent hated asking for the food voucher, but they were desperate. That is life today in this great United Kingdom of Great Britain and Northern Ireland; that is what we face. I do not say this to score points, but to speak up for the people who we have to speak up for. That is what I am here for, and I know it is what everybody else is here for.
That school trip was not essential for that seven-year-old, but it is life at present for their Mummy who works in the local shop and whose partner also works, and that will be their life until we in this place reduce the cost of fuel and electricity and uplift the cap. I want to see the cap uplifted. It is not about millionaires getting money; it is about the working poor and those in poverty. This year they simply cannot manage and that is only going to get worse.
We can give the food voucher and we can point to the wonderful local charities that help parents in need, but we in this place must address the fact that the working poor are working full time but can still not make ends meet. That is the reality in my constituency and many others—maybe including yours, Ms McVey.
That is why we need to consider a universal basic income. That burden cannot fall only on small business owners by demanding increased wages from them, because sometimes that is not possible. Businesses are on the brink and that could tip them over. For example, one small business owner told me that he used to be able to buy for 80p a toilet roll that he then sold for £1. Because the price of shipping has gone up by £9,500 per container, he cannot buy it for £1 anymore; he now buys it to sell for £1.29, an increase of 29%. If we tell him he has to top up the wages of his staff again, the product will be £1.50 and the price will continue to increase. It is about viability and sustainability for small businesses.
When the Government created the universal credit system, it was with the idea that it would give flexibility to working people to ensure that they have enough money. For example, £20,000 a year for a couple without Government assistance may have been enough last year, but it certainly is not enough this year. I ask the Minister, with respect and with a plea from myself, all the hon. Members in this corner of the Chamber and the shadow Minister, on behalf of working families in poverty, will he go back to the Cabinet and the Treasury and uplift the cap, and get hard-working people who want to work, such as my constituent, the help they need to survive?
I am talking about surviving. It is not like getting a passport to take a much-needed holiday, or saving for a TV or a new sofa. Instead it is about people feeding their children and allowing those children go on educational school trips, instead of being left with another class feeling left out, embarrassed and ostracised. That is why this is not okay.
I have great affection for the Minister; he and I speak about many things and there are not a lot of things that we do not agree on, from a human rights or persecution point of view, and we are on the same side. But I say to him and to the Government that this is not okay. This House has the ability to make changes. I ask that we make them, please.
Ronnie Cowan (Inverclyde) (SNP)
I congratulate my hon. Friend the Member for Lanark and Hamilton East (Angela Crawley) on bringing forward this debate. Basic income and the phrase “an idea whose time has come” seem to go hand in glove these days. It has been around for a long time. Recently, thanks to Guy Standing, it has been linked with Magna Carta—or, to be precise, the Charter of the Forest—which makes it at least 800 years old.
There is a growing body of thought that is engaging with the concept of a common good, commonweal or commonwealth. Our current welfare system is failing. It is abused and misused, which is a great pity. Like the hon. Member for Edinburgh West (Christine Jardine), I invoke the spirit of William Beveridge. In December 1942, when considering establishing a welfare state, Beveridge released a report in which he wrote:
“A revolutionary moment in the world’s history is a time for revolution, not for patching.”
The welfare system he established was once the cornerstone of a brave new Britain, but sadly it has fallen into disrepair. Once again, we are looking at a time for revolutions. I say to this Conservative and Unionist Government that that is not just for welfare, but for transport, heating, energy, employment and constitution.
Will basic income cost a lot to implement and run? You bet it will. It will cost a shedload of money. But is it cost-effective? I could argue until I am blue in the face that once we consider the cost of the existing system, the health benefits of basic income—both physical and mental—the increase in start-up businesses, the greater take-up in further education, the freedom it gives people to live a life well spent, it is more than cost-effective. It is a must if we are to raise people out of financial poverty and poverty of aspiration. What price can be put on releasing children from the crushing poverty that they currently experience? What price for hope, aspiration and ambition?
As was mentioned by the hon. Member for Grantham and Stamford (Gareth Davies), whom I welcome to the debate—it really puts the pleasure into debating if people come and put their side of the argument in such a well-informed and well-mannered fashion—this tax system is for everybody. We adjust the tax system accordingly. If I am given £12,000 extra through basic income and I earn an MP’s salary, I will pay back that £12,000, so it nets off. Alternatively, we could use sovereign money, or we could have a citizens’ wealth fund. It does not have to be topside down.
Basic income does not make people indolent. Every pilot that has been run across the world has shown that it frees people to go out and work without being financially penalised. Do we know everything about how it will work? No, we do not, but I am not asking the UK Government to take a punt on this; I am asking them to consider the evidence, and that is why they should embrace the opportunity of pilot projects. These are projects designed to investigate and identify the pros and cons of basic income. I am pleased that in Scotland—backed by the Scottish Government, who provided £250,000 over two years to support the undertaking of a feasibility study for a citizens basic income pilot—we are planning four pilot projects in Fife, North Ayrshire, Glasgow and Edinburgh.
I am equally delighted that there are similar projects in Wales, Northern Ireland and England, with 32 motions calling for UBI trials passed by local councils. Those projects will provide substantial data for academic research, which we can learn from and use to form future policy, but they need financial and administrative support from the UK Government. All I am asking is that the Government make policy based on evidence and stop hiding their head in the sand.
I led the first ever debate in this Parliament on basic income, on 14 September 2016. Sadly, the UK Government are no further forward, and we are now experiencing increased poverty and an increasing gap between the richest and poorest in society. The status quo is unacceptable. Basic income represents something better: hope and opportunity. It is a platform to build on and a safety net if required. I will end today as I ended my speech in 2016, with a quote from Noam Chomsky:
“Optimism is a strategy for making a better future. Because unless you believe that the future can be better, you are unlikely to step up and take responsibility for making it so.”
Once again, I am asking the UK Government to take responsibility.
Alison McGovern (Wirral South) (Lab)
It is a pleasure to serve under your chairship, Ms McVey. I congratulate the hon. Member for Lanark and Hamilton East (Angela Crawley) on securing the debate, which has been good, although slightly interrupted. Her argument against financial insecurity was a very good one. It is stressful to tackle poverty. A family that does not have enough will almost certainly experience significant mental health challenges and will not lead the kind of life that we would wish for them.
The hon. Lady also made a good argument for what has gone wrong in the Department for Work and Pensions since 2010. There are numerous examples where the actions of Government have caused simply unnecessary stress and pressures. All hon. Members argued against poverty and for a universalist approach for a United Kingdom where no one is left behind. That is where we agree. But I was not clear what the hon. Member was arguing for. She mentioned several times that it is not possible to give full details and that is why UK Government should do more research, or that somehow we need to progress this, and then there might be information about what would be available under a universal basic income. However, we need some simple facts in order to make the case for such a radical change to our system. Those facts are how much the universal income might be and how it would be paid for.
Ronnie Cowan
Is the hon. Member aware that Andy Burnham, the Mayor of Greater Manchester, is pushing for a basic income to be trialled in the Greater Manchester area? He seems to understand that by trialling these things and learning from them, we will all be better informed.
Alison McGovern
I will go on to say why universal basic income is not the Labour party’s policy.
Basic facts are important. The hon. Member for Lanark and Hamilton East could tell us more about the situation in Scotland. She mentioned the experience of the Scottish Government, and I think she could make her argument by giving some more basic facts. It is difficult to see exactly what she wants the change in system to do when we do not know exactly what is being proposed.
The hon. Lady mentioned supporting the idea of a minimum income guarantee, as did several Members. That, however, is not the same as a universal basic income. A minimum income guarantee is about a standard below which no one should fall, whereas a universal basic income—as I understand it from her—is about a universal payment for everyone, regardless of circumstances.
We need to think about this from first principles. Our social security system has two purposes: first, to smooth incomes over a person’s lifetime. We therefore have universal aspects to our system that we all agree with, such as the idea of the state pension being universal on the basis of age. Other aspects of our social security system, such as child benefit, are paid on the basis that children have limited possibilities to generate income. In fact, we absolutely think that children ought to be supported, though we could have a long debate about the two-child policy and the fact that it rather contravenes the principle. That smoothing of income over a lifetime is exactly as Beveridge envisaged the system would work.
Secondly, our social security system addresses the needs that people have in order to enable their full participation in society—so, those who have extra costs, the obvious example of which is people who have a disability .
Angela Crawley
The hon. Member has made it very clear that the Labour party does not support universal basic income, which I find profoundly fascinating. However, that is not the point that I want to make. She also said quite clearly that she felt the benefit system had started to change since 2010. What lessons have been learned by the Labour party, which itself had a system that was far less than perfect, and what exactly is she proposing to ensure that those living on the lowest incomes can at least have the basic subsistence that is required?
Alison McGovern
I will come to that point, because I will set out shortly, if I may, what I think is the important way in which we should take our country forward.
Hywel Williams
I remind the hon. Lady that there are three particular principles of social security and the support that we give to each other. One is income replacement, the second is addressing particular needs, such as childcare or whatever it is, and the third one, which is important for those of us in this part of the Chamber, is the need to promote solidarity and cohesion, using the system to ensure that we all realise that we are all in this together, as it were. In that sense, the system should be generous—indeed, much more generous than it is at the moment.
Alison McGovern
The hon. Gentleman makes an important point about the universality of the system, which we all pay into and we all take out of when we need to. That is the contributory principle—the principle that we are all part of the same system.
This is where I think there is an important point that is at risk of being missed, because the contributory principle—the idea that we are all a part of this system—is failed when people are left behind. Beveridge and Eleanor Rathbone—whose history you know well, Chair—created a system of social security that was not in isolation from the other work that they did in analysing the problems that had happened in the 1930s and assessing which institutions were needed for a good economy that would leave no one behind and in which people could pay into the social security system when they were able to, through working, and take out of it when they needed to. Their point was to ensure that work would help to support families and that the social security system would be there to provide a minimum level of income, as needed, to support a family.
The Beveridge report required two other things to be in existence to support the system of social security. The first was the creation of the NHS and the second was the assumption of full employment—a labour market where everybody could take part and where work would provide enough to help to support a family.
As various Members have already said, that is what is going wrong right now. The Prime Minister crows about jobs, but he does so in the middle of a crisis of huge price rises while wages are falling. For me, that is the definition of a broken jobs market.
Beth Winter
As I am sure my hon. Friend is aware, prior to the 2019 Labour manifesto, the then shadow Chancellor, my right hon. Friend the Member for Hayes and Harlington (John McDonnell), commissioned Guy Standing to undertake a research project on a pilot of basic income. A document was produced, which I expect she has read, that proposed a UBI pilot and piloting UBI was included in the 2019 manifesto. Is that something we continue to support?
Alison McGovern
I will set out the rest of my argument about what I think we should do to help to improve people’s incomes. And I will do so very quickly, Ms McVey.
People have mentioned the various pieces of research, which are important, because they tell us about how people respond to different systems. However, I think that this broken jobs market that we now face, whereby businesses are crying out for staff and there are vacancies left, right and centre, but too many people are stuck in work that is far too low-paid, shows exactly what is going wrong.
The problem with what the hon. Member for Grantham and Stamford (Gareth Davies) said about work having been proven to be the best route out of poverty is that, for the past decade, the Tory Government have set out on a mission to prove that that is not the case. We need a social security system that does what it was designed to do—help people through different life stages when they need it, and help lift people out of disadvantage and into the dignity of work. There will always be people who are unable to work, but the vast majority of people want to be in work.
It is not obvious to me that there is a proposal on the table that does either of those things. Labour’s approach will be different. We need to change jobcentres—
Esther McVey (in the Chair)
Order. I need to hurry you along, because we still need to hear from the Minister and have the wind-up at the end.
Alison McGovern
My apologies, Ms McVey.
We need to change jobcentres to help people move on and move up in work, and progress our country to real full employment that involves disabled people and everybody in our country. That would be a plan towards progress.
Esther McVey (in the Chair)
Minister, will you be mindful of the need to leave a minute at the end for the Member in charge to wind up the debate?
The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)
It is an honour to serve with you in the Chair, Ms McVey—one of Cheshire’s finest. I am mindful of the time that is available, and I am sure you will give me a reminder as we go on.
It is an honour to be involved in the debate. I know that all Members have sincerely held views. It is also pretty clear that there is still quite a lot of debate about this subject, even within the Opposition parties. I look forward to seeing how that debate moves forward.
As Members are aware, our welfare system is centred on the support provided by universal credit, which offers a streamlined and simplified benefits system that supports those on low incomes, as well as those who are unemployed or who cannot work. Universal credit is a dynamic benefit that reflects people’s needs from month to month. It ensures that claimants are paid depending on their circumstances, with claimants’ awards changing depending on how much they earn from month to month. That is in strong contrast to a universal basic income, which does not fluctuate based on earnings in the same way but mandates a standard monthly allowance paid to all working-age adults—although I am mindful that there are still details to be worked through in the proposals from the Scottish Government.
I want to reassure colleagues—not least the hon. Member for Lanark and Hamilton East (Angela Crawley), whom I congratulate on securing the debate, but also my friend the hon. Member for Strangford (Jim Shannon), the hon. Member for Edinburgh West (Christine Jardine) and so on—that my views, and those of my hon. Friend the Member for Grantham and Stamford (Gareth Davies), are not ideologically held. They are concerns based on practical issues that, as we have heard in the debate—in particular during the past 10 or 15 minutes—need to be properly worked through.
We have real, evidence-based concerns about UBI on a practical basis because it does not provide the work incentive that we believe is vital in these sorts of systems. We have fundamental concerns, too, about what it might mean for targeting. Many of the UBI schemes that have been put in place are not targeted at those with greatest need. We feel that it is vital that targeted approaches are put in place. We saw that from the Chancellor on 26 May, when he set out our targeted measures to help those who need support through cost of living challenges, whether that is those on means-tested benefits, those on disability benefits or pensioners. By the way, that legislation will come to the House next week.
We have fundamental concerns, which are held not just by the Government but by many think-tanks—they were also expressed by the Work and Pensions Committee back in 2020. They are concerns based on evidence from trials in different parts of the world, such as Spain, Canada and, in particular, Finland. The Finnish Finance Minister concluded that the case was closed and there must be conditionality in the social security system.
It is for those reasons that we have concerns about UBI, whether in the form put forward initially by the Scottish Government or that in the Welsh Government’s planned pilot. I look forward to being a fly on the wall in the discussions between Opposition Front Benchers and the Welsh Government on these matters.
Angela Crawley
I thank hon. Members for contributing to the debate. On the question of where the detail and the facts are, I direct the hon. Member for Wirral South (Alison McGovern) to the fact that the Scottish Government fully costed, in two feasibility studies, a model that is workable, but the simple fact is that this winter will be the hardest yet for too many families and too many children will continue to grow up in poverty. I do not think UBI is a radical concept. With the greatest respect, if the Queen’s Speech is anything to go by, I think this Government need some radical ideas and a new vision. I urge the Minister to seriously consider a pilot of this scheme and to give families a chance.