Universal Basic Income

Alison McGovern Excerpts

Wednesday 15th June 2022 Westminster Hall

[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?