Universal Basic Income

Ronnie Cowan Excerpts

Wednesday 15th June 2022 Westminster Hall

[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—

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[Ronnie Cowan (Inverclyde) (SNP)]

I congratulate my hon. Friend the Member for Lanark and Hamilton East (Angela Crawley) on bringing forward this debate. Basic income and the phrase “an idea whose time has come” seem to go hand in glove these days. It has been around for a long time. Recently, thanks to Guy Standing, it has been linked with Magna Carta—or, to be precise, the Charter of the Forest—which makes it at least 800 years old.

There is a growing body of thought that is engaging with the concept of a common good, commonweal or commonwealth. Our current welfare system is failing. It is abused and misused, which is a great pity. Like the hon. Member for Edinburgh West (Christine Jardine), I invoke the spirit of William Beveridge. In December 1942, when considering establishing a welfare state, Beveridge released a report in which he wrote:

“A revolutionary moment in the world’s history is a time for revolution, not for patching.”

The welfare system he established was once the cornerstone of a brave new Britain, but sadly it has fallen into disrepair. Once again, we are looking at a time for revolutions. I say to this Conservative and Unionist Government that that is not just for welfare, but for transport, heating, energy, employment and constitution.

Will basic income cost a lot to implement and run? You bet it will. It will cost a shedload of money. But is it cost-effective? I could argue until I am blue in the face that once we consider the cost of the existing system, the health benefits of basic income—both physical and mental—the increase in start-up businesses, the greater take-up in further education, the freedom it gives people to live a life well spent, it is more than cost-effective. It is a must if we are to raise people out of financial poverty and poverty of aspiration. What price can be put on releasing children from the crushing poverty that they currently experience? What price for hope, aspiration and ambition?

As was mentioned by the hon. Member for Grantham and Stamford (Gareth Davies), whom I welcome to the debate—it really puts the pleasure into debating if people come and put their side of the argument in such a well-informed and well-mannered fashion—this tax system is for everybody. We adjust the tax system accordingly. If I am given £12,000 extra through basic income and I earn an MP’s salary, I will pay back that £12,000, so it nets off. Alternatively, we could use sovereign money, or we could have a citizens’ wealth fund. It does not have to be topside down.

Basic income does not make people indolent. Every pilot that has been run across the world has shown that it frees people to go out and work without being financially penalised. Do we know everything about how it will work? No, we do not, but I am not asking the UK Government to take a punt on this; I am asking them to consider the evidence, and that is why they should embrace the opportunity of pilot projects. These are projects designed to investigate and identify the pros and cons of basic income. I am pleased that in Scotland—backed by the Scottish Government, who provided £250,000 over two years to support the undertaking of a feasibility study for a citizens basic income pilot—we are planning four pilot projects in Fife, North Ayrshire, Glasgow and Edinburgh.

I am equally delighted that there are similar projects in Wales, Northern Ireland and England, with 32 motions calling for UBI trials passed by local councils. Those projects will provide substantial data for academic research, which we can learn from and use to form future policy, but they need financial and administrative support from the UK Government. All I am asking is that the Government make policy based on evidence and stop hiding their head in the sand.

I led the first ever debate in this Parliament on basic income, on 14 September 2016. Sadly, the UK Government are no further forward, and we are now experiencing increased poverty and an increasing gap between the richest and poorest in society. The status quo is unacceptable. Basic income represents something better: hope and opportunity. It is a platform to build on and a safety net if required. I will end today as I ended my speech in 2016, with a quote from Noam Chomsky:

“Optimism is a strategy for making a better future. Because unless you believe that the future can be better, you are unlikely to step up and take responsibility for making it so.”

Once again, I am asking the UK Government to take responsibility.

[Alison McGovern (Wirral South) (Lab)]

It is a pleasure to serve under your chairship, Ms McVey. I congratulate the hon. Member for Lanark and Hamilton East (Angela Crawley) on securing the debate, which has been good, although slightly interrupted. Her argument against financial insecurity was a very good one. It is stressful to tackle poverty. A family that does not have enough will almost certainly experience significant mental health challenges and will not lead the kind of life that we would wish for them.

The hon. Lady also made a good argument for what has gone wrong in the Department for Work and Pensions since 2010. There are numerous examples where the actions of Government have caused simply unnecessary stress and pressures. All hon. Members argued against poverty and for a universalist approach for a United Kingdom where no one is left behind. That is where we agree. But I was not clear what the hon. Member was arguing for. She mentioned several times that it is not possible to give full details and that is why UK Government should do more research, or that somehow we need to progress this, and then there might be information about what would be available under a universal basic income. However, we need some simple facts in order to make the case for such a radical change to our system. Those facts are how much the universal income might be and how it would be paid for.

[Ronnie Cowan]

Is the hon. Member aware that Andy Burnham, the Mayor of Greater Manchester, is pushing for a basic income to be trialled in the Greater Manchester area? He seems to understand that by trialling these things and learning from them, we will all be better informed.

[Alison McGovern]

I will go on to say why universal basic income is not the Labour party’s policy.

Basic facts are important. The hon. Member for Lanark and Hamilton East could tell us more about the situation in Scotland. She mentioned the experience of the Scottish Government, and I think she could make her argument by giving some more basic facts. It is difficult to see exactly what she wants the change in system to do when we do not know exactly what is being proposed.

The hon. Lady mentioned supporting the idea of a minimum income guarantee, as did several Members. That, however, is not the same as a universal basic income. A minimum income guarantee is about a standard below which no one should fall, whereas a universal basic income—as I understand it from her—is about a universal payment for everyone, regardless of circumstances.

We need to think about this from first principles. Our social security system has two purposes: first, to smooth incomes over a person’s lifetime. We therefore have universal aspects to our system that we all agree with, such as the idea of the state pension being universal on the basis of age. Other aspects of our social security system, such as child benefit, are paid on the basis that children have limited possibilities to generate income. In fact, we absolutely think that children ought to be supported, though we could have a long debate about the two-child policy and the fact that it rather contravenes the principle. That smoothing of income over a lifetime is exactly as Beveridge envisaged the system would work.

Secondly, our social security system addresses the needs that people have in order to enable their full participation in society—so, those who have extra costs, the obvious example of which is people who have a disability .