Universal Basic Income

Dan Poulter Excerpts

Wednesday 15th June 2022 Westminster Hall

[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.