Universal Basic Income

Caroline Lucas Excerpts

Wednesday 14th September 2016 Westminster Hall

[Ronnie Cowan]

I take on board the hon. Lady’s comments. My concern about that idea is that it would entail a change to just one aspect of what we are trying to achieve. It is a very important aspect of what we are trying to achieve, but it would not fulfil the requirements of everybody who relies on welfare.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I congratulate the hon. Gentleman on securing this important debate. A basic income has long been Green party policy, so I am very glad to hear him talk of it. Does he agree that as well as making the very strong case that he is making for a basic income on the grounds that our welfare system is not working, there is also a case to be made for it on the grounds that increasing automation will create a huge revolution in the way that work is done? There are estimates that by 2025 we could be losing a third of the jobs in the UK retail sector. For that reason too, we need to look outside the box and explore this idea in a lot more detail.

[Ronnie Cowan]

Yes, we are going there. I believe that it is called the “gig economy”, in which people share jobs and try to find a better work-life balance. People do not want to have to put in all those hours of work in simply to make money if it is not within them that they want to spend all that money. That chasing of the capitalist dream is hopefully something that is confined to the past.

If we genuinely want to create a more effective system of state support, we need to be prepared to address the difficult questions. Part of the challenge will be to bring together the patchwork of individuals and organisations that have expressed an interest in pushing forward the UBI agenda. Groups such as Citizen’s Basic Income Network Scotland and the Citizen’s Income Trust have helped me to outline what options are open to us in defining a basic income.

It is argued that the benefits of introducing a basic income include: reducing poverty and boosting employment; providing a safety net from which no citizen will be excluded; and creating a platform upon which all people are able to build their lives. More generally, it could be argued that a basic income would bring about increased social cohesion and mark the end of incentives that discourage work and saving.

In the time available to me today, I can only touch on the wide range of questions that will need to be answered in order to implement such a scheme. Who will be eligible for basic income? What will be the rate of payment? Over what timeframe will it be implemented? Most important, can the affordability of such a scheme be demonstrated? Having clear answers to these questions is vital, but that will not be enough; we will also need the political will to make changes.

The Irish Government published a Green Paper on a basic income as far back as 2002. It concluded that a basic income would have a substantial positive impact on the distribution of income in Ireland and would reduce poverty in a more effective way than the existing welfare system, but 14 years later the concept has not managed to evolve into a fully formed Government policy.

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[Caroline Lucas (Brighton, Pavilion) (Green)]

It is a pleasure to serve under your chairship, Mr Davies. I warmly congratulate the hon. Member for Inverclyde (Ronnie Cowan) on securing this important debate. I want to raise three particular areas that I think we should examine, given that the conditions of the 21st century demand that we investigate basic income in more detail.

First, as the hon. Gentleman powerfully set out, our social security system is no longer fit for purpose and requires fundamental reform. Through my constituency surgeries, I see at first hand just how badly the system is failing. The combined impact of bureaucratic complexity and a brutal, punitive sanctions regime that almost seems designed to humiliate those that need help the most can be absolutely catastrophic for vulnerable families and individuals. We simply cannot go on tinkering with a model of social security that was designed to meet the economic and social conditions of the 1950s. However, it is absolutely crucial that any move to a basic income protects and increases the income of the poorest and those who are unable to work on account of disability. A universal payment for all must not undermine additional help for those who need it most.

Secondly, fundamental changes to our economy and labour market are working together to make work itself increasingly precarious. Well-paid jobs on permanent contracts have dwindled, while short-term, zero-hours contracts and bogus self-employment are rife. Alongside a genuine national living wage, a basic income would provide a vital buffer against this new age of insecurity and an escape route for those caught in the trap between a complex, punitive and quite simply outdated social security system and low-paid, insecure and all too often exploitative employment.

Thirdly, a basic income would give people more control over their working, caring and personal lives. That is especially important for women, who despite the growing number of stay-at-home fathers continue to do most of the heavy lifting of child and elder care without payment, but it is also about having the opportunity to contribute more time and effort to our local communities by doing things we might simply want to do. There is far more work that needs to be done than that which is simply parcelled up into what we call jobs. We only have to look around our local communities to see railings that need painting, older people who need visiting and allotments that people would love to tend, but we cannot necessarily do many of those things—they are in some ways important economic activities—because right now we are penalised for doing so.

We must not get carried away—basic income must not be seen as some kind of panacea for all our problems, but it could play a key part in rebalancing towards more satisfying lives and a more sustainable economy. I very much welcome today’s debate, and the growing interest across the political spectrum in an idea that my party has fought for over many years. It is heartening to see the invaluable work being done by groups such as Compass, the Royal Society of Arts, the Fabians and the Institute for Public Policy Research, as well as by long-standing advocates such as the Citizen’s Income Trust. It is refreshing to hear Members from other political parties talk positively about an idea that treats people on the basis of the best in them, not the worst.

We do not have all the answers yet—of course not. Getting to a meaningful basic income from where we are now presents major challenges. I think 34 MPs signed my cross-party early-day motion, which calls on the Government to fund and commission further research into the various basic income models, looking at their feasibility and how the challenge of moving to a basic income might be met. I hope that we can build on that number and that between us we can generate universal support for an idea whose time has definitely come.

I point to the progress being made in other countries. In Finland, the coalition Government have announced a €20 million experiment that will test two or possibly three basic income models over the next two years, involving up to 180,000 citizens. Green councillors in the Dutch city of Utrecht are also planning a basic income pilot, as is the Canadian province of Ontario. In New Zealand, the opposition Labour party is actively considering basic income as a means to combat the possibility of higher structural unemployment. In a sense, the UK would just be catching up by doing its own research into this. I mentioned a whole range of different independent organisations that are doing research, but it would be most helpful if the Government commissioned some research and did some pilots of their own. A lot of the figures that we need to investigate on how best to make this a serious policy proposal are figures that the Government have but the rest of us do not. I make a plea to the Minister to look seriously at this proposal and to use some of the resources at his disposal to invest in a pilot and some more research, because I genuinely think this is an idea whose time has come.

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[Damian Hinds]

I am grateful for the clarification.

A universal basic income or similar systems that guarantee a minimum income to all have been debated and discussed at some length across the world. This debate has been stimulating and important, and discussing UBI and similar concepts, such as the negative income tax, which was a popular subject for academic debate before UBI, is an engaging activity. Any system that promises protection and, to quote the recent report from the Joseph Rowntree Foundation and Compass,

“freedom of choice for individuals between work and leisure”

is bound to sound appealing. It is difficult to argue with a utopian system that enables individuals to choose whether to work or to engage in leisure activities, alongside all the other valuable things that people do, such as voluntary work and caring.

However, as the Compass report suggested, the big issue with UBI is not whether it is desirable but whether it feasible. Would it be affordable, and could it be introduced in a way that prevented losses among the poorest sections in society? The hon. Member for Inverclyde said we should not turn our back on laudable aims. I could not agree more, but laudable aims are not enough. When Jack Kennedy said he wanted to put a man on the moon, he knew that just willing it would not make it happen. It had to be technically feasible.

The Citizen’s Income Trust, which the hon. Gentleman cited, and the RSA claim to have developed cost-neutral models for a scheme, but less highlighted is the fact that they could do so only by collecting huge amounts of additional tax. I can confirm that that is not everybody’s definition of cost-neutral. As the JRF and Compass report found, the additional tax revenue required to deliver a sustainable UBI would be as much as £160 billion. Such a system is clearly unaffordable, even if we assume that the introduction of a UBI would not affect individual behaviour in the labour market and that nobody would give up paid work as a result of its introduction. That assumption, of course, goes against common sense. It goes against trials that have happened in other countries, which have been referred to, and the principles of this Government and all recent Governments that I know of.

[Caroline Lucas]

I have got the Compass figures in front of me. The report says that the net cost of the hybrid model that Compass proposes would be about £8 billion a year. That is a significant sum, to be sure, but it is not impossible if we are talking about a revolution in the way that work is organised. The problem with many of the contributions this afternoon is that it has been assumed that we go on as we are now and suddenly graft a citizens’ income on top of it. I think the way work is going to look in the future will be very different; therefore we need to look at bolder ideas.

[Damian Hinds]

I think the hon. Lady has the relevant page in front of her; I do not, but I have it nearby. From memory, if she casts her eye about three lines further up above the £8.2 billion figure, she will find another figure for what the impact on income tax will be. That is where the total effect, which is so much greater, is laid out.