Universal Basic Income

Hywel Williams 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]

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.

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[Christine Jardine (Edinburgh West) (LD)]

It is a pleasure to serve under your chairmanship, Ms McVey.

We are living in unprecedented times—although I am loth to say that, because every time that I have said it in the past two years, things have got worse. However, we are living in unprecedented times, and the problems we face now demand very different and potentially more far-reaching solutions than anything this country has attempted since the end of the second world war—or, perhaps there is no evidence from anywhere else in the world, and we might need to be first.

Now more than ever, we see clearly how easily any of us could find ourselves needing support. There is a generation out there who had no thought that they might ever need benefits, because they had good, well-paid jobs, but they are seeing that that now is no security. In my constituency of Edinburgh West, foodbanks are telling me that the people who used to bring donations are now themselves coming for help. So it can happen to any of us: that we would need support and perhaps find none.

Sadly, we are learning that the welfare state, which has served us so well for seven decades, is not fully equipped for the new reality that is the consequence of the series of crises that we have faced in the past two years. During covid, I spoke to too many people for whom the many Government schemes offering furlough, business grants or support for the self-employed simply did not provide support. Coronavirus made no exception in who it attacked, yet the Government were unable to say the same about who they supported. Yes, we have heard examples today of payments that are now being made to everybody, but the Government repeatedly tell us that they cannot help everyone all the time.

I do not think that is good enough, but I recognise that what we face now is a mammoth task. But we have to find a way. We cannot lose sight of the question that so many people will face this coming winter: how will they feed their family, keep a roof above their heads and stay warm? When even the welfare state, which generations in this country have worked hard to maintain, is not able to do that, we have to accept that the time has perhaps come to do things differently. What has become abundantly clear is that what has been missing throughout all these crises is a crucial element of universal protection—something that perhaps none of us realised we would need.

The hon. Member for Grantham and Stamford (Gareth Davies) said that universal basic income does not exist anywhere in the world and asked how could we provide it. In 1942, Beveridge’s vision did not exist, but it is undoubtably one of those iconic British systems of which we are rightly proud. Because that generation took the risk, we benefited. Now we need to take the risk so that future generations can benefit and to realise that we need a new vision to equip us for the 21st century and the very different challenges it brings.

The concept of a universal basic income, a guaranteed basic income or a universal right to a standard of living that looks at the country and says that everybody should be able to be sure that they will have food on the table, a roof over their heads and some warmth in the winter. That is what we are talking about: the principle. We are not talking necessarily about sending everybody cheques every month, and millionaires getting cheques. We are talking about looking at people and seeing if their standard of living, income and quality of life reaches a basic level. That is what we are talking about today.

As a constituency MP, with every passing day and every desperate phone call from someone in trouble who is frantically searching for a financial lifeboat that does not exist, I become more convinced that some form of universal basic income has to be the solution in this country. Nobody should be left behind. Moving forward after the pandemic and this cost of living crisis, unemployment and financial insecurity will be major challenges for any Government. A basic income, a basic standard of living or a guaranteed income will be the best, fairest and simplest way to safeguard the most vulnerable in society and care for those who need it.

[Hywel Williams]

Given that we are talking in high terms and with a breadth of vision here, and apropos what the hon. Member for Grantham and Stamford (Gareth Davies) said about the dignity of work, we must crack this paradox whereby it is said that to get the poor to work harder, we must provide them with less support, and to get the rich to work harder, we must provide them with other support, such as cutting their taxes. We need a much more universal view of income support and dignity for everyone.

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[Alison McGovern]

I will come to that point, because I will set out shortly, if I may, what I think is the important way in which we should take our country forward.

[Hywel Williams]

I remind the hon. Lady that there are three particular principles of social security and the support that we give to each other. One is income replacement, the second is addressing particular needs, such as childcare or whatever it is, and the third one, which is important for those of us in this part of the Chamber, is the need to promote solidarity and cohesion, using the system to ensure that we all realise that we are all in this together, as it were. In that sense, the system should be generous—indeed, much more generous than it is at the moment.

[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.