Universal Basic Income

David Rutley Excerpts

Wednesday 15th June 2022 Westminster Hall

[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.