Universal Basic Income

Gareth Davies Excerpts

Wednesday 15th June 2022 Westminster Hall

[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.

[Gareth Davies (Grantham and Stamford) (Con)]

I congratulate the hon. Lady on securing the debate and giving a considered and well thought-out speech. Will she clarify that point on expense? The cost of this programme, even if it were rolled out using a modest income, would be around £316 billion annually, according to one study. Can she clarify what her research has shown about the overall annual cost?

[Angela Crawley]

As the hon. Gentleman will appreciate, there are no studies that can show comprehensively the long-term benefits of such a scheme, because there has been no extensively researched pilot here or in most countries. I think we can all agree that when an individual does not have to think about how they will fund their next meal, pay for the electricity or subsist and survive, they can start to think about their life chances and opportunities, and can begin to fulfil their ambitions in life. There is so much to be gained from a pilot, which would give the hon. Gentleman the evidence, studies and statistics that he asks for.

A universal and destigmatising, more compassionate welfare system would decrease depression and anxiety rates. It is not over-dramatic to say that it would save lives. If the Government are committed to addressing the mental health crisis, will they reform the system responsible for pushing so many people to the edge? I end my contribution by calling on the Government to consider seriously the prospect of a universal basic income. I do not believe such a policy is as radical or unattainable as it seems. We already have the technology and a substantial Department for Work and Pensions budget that could cater for most of these measures. It is wasted, however, on empty work programmes and on processing sanctions, which scar people mentally and financially and abandon those most at risk to life in poverty.

Universal basic income represents a fairer system. I encourage the Minister and his Department to consider establishing a pilot scheme, and to speak to the results rather than to the rhetoric. The biggest issue is cutting through the damaging Tory ideology that people have to work for their basic human rights. I urge the Minister to rethink his Government’s approach, and to seriously consider a universal basic income pilot scheme.

--- Later in debate ---

[Gareth Davies (Grantham and Stamford) (Con)]

It is a pleasure to serve under your chairmanship, Ms McVey. I congratulate the hon. Member for Lanark and Hamilton East (Angela Crawley) and every Member here. I welcome any debate about moving our economy forward and helping the most vulnerable in society. However, I am afraid, although it may come as a complete shock, that I disagree with the proposal of UBI. I want to set out four reasons why, in good humour and constructively.

First, there is a great deal of uncertainty about how much UBI would cost taxpayers and the British Exchequer. “Universal” means “everybody”; in our country, over 65 million people will receive some form of income under a universal basic income policy. If we provided just a basic income—even a modest income—it would result in hundreds of billions of pounds of extra money being spent. We would have to find that money from other Departments, or raise new money through higher taxes. That is a perfectly noble argument to make, but it is a fact of running a budget that the money has to be taken from somewhere else, or it has to be raised.

[Christine Jardine (Edinburgh West) (LD)]

rose—

[Gareth Davies]

I am not sure what the argument of the Welsh Government or the Liberal Democrats is, but I am happy to hear it.

[Christine Jardine]

I also apologise for being a little late; I was caught unawares by the broken lifts in Portcullis House. Does the hon. Gentleman accept that the universal basic income is still a concept—an idea? Those of us who earn much more than what it might offer should perhaps not look for any payment at all. We should accept that we already have that income. We can calculate how much it would cost to give it to everybody, but that might not be in line with the spirit of the universal basic income.

[Gareth Davies]

It is beyond the bounds of my intellect to debate what “universal” means. I take it to mean, “being received by everyone.” It could be up to people to give it back, but as we have seen in recent policies, that does not always happen.

[Hywel Williams]

I do not want to be argumentative, but the Chancellor has agreed to give us all, including everyone here, the princely sum of £400, so the principle is accepted by Conservative Members, although I agree that there might be rather larger sums involved in the universal basic income. We have talked about the gross cost, but we might be able to net off a considerable amount of money in view of the wellbeing, better health and happiness, and everything else that comes with having a proper income.

[Gareth Davies]

The hon. Member for Lanark and Hamilton East (Angela Crawley), who introduced the debate, made the point that the Conservatives recently implemented a universal policy. She will be aware, as will the hon. Member for Arfon (Hywel Williams), that in exceptional circumstances—be it the first pandemic in over 100 years, or a national crisis in energy prices—we would expect the Government to protect as many people as possible, and to act at pace. I accept that point, but that is not what we are talking about today, which is, as I understand it, a complete and permanent root-and-branch reform of our welfare system.

[Several hon. Members rose—]

--- Later in debate ---

[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.

[Ronnie Cowan (Inverclyde) (SNP)]

There is absolutely no evidence from any pilot programme from anywhere in the world that shows that people are indolent and do not want to work. In fact, the current welfare system punishes people for going back to work. As for the basic income, I am not taking people’s basic income away if they go and get some part-time work or to go back to university to study, so it actually encourages them and gives them the confidence to go back into work.

[Gareth Davies]

The hon. Member makes a reasonable point about evidence, but I will point out to him that there is also no evidence of universal basic income working anywhere in the world. The hon. Member for Lanark and Hamilton East—

[Angela Crawley]

rose—

[Gareth Davies]

I can pre-empt it. The hon. Lady rattled off a number of examples—I will hurry up with my speech because I am being asked to move on, although I have taken a number of interventions, which will hopefully be acknowledged.

There have been a number of studies and pilots, not least the one in Wales that is going on at the moment, but not one has been executed. There is not one example from around the world that we can point to where universal basic income has been implemented. The reason is that, although such pilots may show some benefits for mental health, wellbeing and other points, not one of them has not shown any Government around the world that universal basic income is the right model for alleviating poverty in the future. [Interruption.] I am afraid that I will end my speech here, by saying thanks to you, Ms McVey, and thanks to everybody for listening. I feel a little alone on this side of the Chamber, but I am pretty sure that the British people are with me.