Universal Basic Income

Beth Winter Excerpts

Wednesday 15th June 2022 Westminster Hall

[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.

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[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.

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[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—