Universal Basic Income

Lloyd Russell-Moyle Excerpts

Tuesday 13th October 2020 Westminster Hall

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

Yesterday the Prime Minister responded to me when I asked what someone on minimum wage, who will have a third of their wage cut, should do. He said, “Oh, that’s the point of universal credit,” in the way that he does. I think he was getting confused with universal basic income. That would be the point of a universal basic income—so that as wages fluctuated down or there were particular problems, there was an automatism; so that there was always a basic floor and an income stream that people could rely on.

The reality, as we know with universal credit, is that there is an application system that is particularly difficult, and the work component has been re-imposed on universal credit in this country since lockdown. It is not just a payment made to support people unconditionally, and we know that the stress of the waiting period causes huge anguish for many of our communities. People do not see universal credit, or jobseeker’s allowance, or the dole—or whatever name it is given—as something that is their right or that they deserve. They see it as something that they are being judged on to get, and many proud people leave it until it is too late. They leave it, thinking, “I will use my savings; I will do the good thing for society and not go immediately and ask for support.” That means that by the time they are knocking on the jobcentre door, they might have already used up what little resources they had—resources that the Government expect them to live on while they are waiting for an application. How could we avoid a system that is degrading, causes mental health problems and causes people to rely on food banks? Surely we should explore some sort of system of universal basic income. It would, after all, do exactly what the Prime Minister promised; it would actually fulfil that pledge.

Universal basic income is not a replacement for universal basic services. We need the NHS, we probably need a separate way of dealing with housing, we need lifelong learning—we need those things to go along with it. However, it is a liberating factor for those things that the Government really should not be providing. My view is that the Government should not be providing food parcels—neither the Government nor charities. Charities do it in large part. In Brighton, most of those charities are also supported by the local council through cash amounts for them to go to the cash and carry. That is not dignified. It is not dignified that people have to go and get a bag of pre-sorted goods to live on that week. I do not think that is acceptable. That is where a cash transfer is important, because cash has a liberating element in those circumstances. It has a dignifying element in those circumstances, because when a person walks into the supermarket, they are able, on a par with everyone, to engage and purchase the things they may like.

Nor is a universal basic income a substitute for a decent industrial strategy. We need strong trade unions pushing for greater conditions for workers. We need to ensure decent relations between employers and trade unions to make sure we have industrial harmony. We need to make sure that the national minimum wage is being pushed up so that it becomes a real living wage. All those things are needed. However, if we do not deal with the transitions, particularly in a society where we have more transitions and less stability in the job market, we might be helping those fewer and fewer people in full-time and stable work but not enabling people to develop full-time and stable work positively.

I am a universalist. I generally believe that giving things to everyone pushes the quality up, not down, because the pressure is that everyone understands their value. That does not mean that everyone pays in equally. One of the critiques that we hear is that giving all this money to everyone means giving rich people money. I do not know how those people think the pay-as-you-earn system works, but in a person’s payslip for the month they pay x amount of tax—x is given to the Government. If UBI were set at something like £100 a week—I pick that number from the top of my head—that would mean £5,000 a year. Under the current tax system, anyone earning more than £26,000 would be a net contributor. That is an interesting number, because £26,000 is about the average wage in the south-east, although it is slightly higher in Brighton. Actually, that would be very positive, because those earning more would be paying for it. Of course, the tax system would have to be redesigned to make it balance. Those enabling figures are an automatism.

In the ’90s, the Scandinavians developed what was called flexicurity. It was adopted, of course, by the European Union—we can have arguments about our leaving, but that is not why I raise it. I raise it because it was about looking forward and saying that the job market was changing. The Scandinavian countries recognised that they needed a more flexible labour market. Jobs for life were not necessarily going to happen, and were not necessarily desirable. Companies were saying that they needed the ability to be fleet of foot. The pact that was made was that if there was to be a more flexible workforce—the ability to hire and fire more easily—there needed to be greater protections. Some of that was about free lifelong learning. The pillars were a flexible labour market, lifelong learning, labour market policies and a strong trade union-business pact. The final pillar of the European model was a model social security system with adequate minimum support for all.

I know that the Government are slightly allergic to things that come out of Europe, but we should learn from that decent, forward-looking principle of how the labour market needs to look in the future. I do not want creative people to be forced to go into cyber-security, as the latest Government advert suggests, if they want to make ends meet. I want them to be free to develop new creative industries that provide billions of pounds of revenue to our country. If they are not given support to do that in difficult times, there is a danger that we will lose whole sections of our industry. I genuinely think that UBI is an opportunity to put some of that flexicurity model into practice.

UBI will not be perfect—there are problems with all systems—but I believe that it encompasses some of the principles of the failed universal credit system. It encompasses the idea that people can transition. Conditions could be put on it and infrastructure could be put around it, but I am not sure that would be particularly helpful.

UBI also has the ability to rebalance our generational problem. We have the clear problem at the moment that many younger working-age people—people under 30 or even under 40, so not that young in some accounts—feel that they are getting a rum deal. They feel that they will never reach pension age because it will increase on and on. They feel that the state has abandoned them in housing and welfare—under-35s have lower rates in housing, et cetera. They feel almost infantilised by the current system. That generational pact has broken. I think that part of the problem with coronavirus is that a lot of young people are not convinced that there is a generational pact in society, because they do not feel that the state or society has actually bothered to care for their concerns. They feel that huge amounts are given to pensioners. That is not necessarily true—our pension is rather low—but that is the feeling among lots of people.

A universal basic income would of course differentiate between ages. It would be slightly lower for children and would then increase for working-age people and again for pensioners. It would be a continuum, which would rebalance that understanding of a generational pact that everyone gains from. That would really transform our society for the better, which is why I hope the Government will at least explore some real, decent pilot schemes.