Basic Income could be the key to success in the 2021 elections

As Spring Conference starts, I have to be honest – I’m simmering with frustration.

As I’ve explored at greater length here, I feel the party leadership is at serious risk of missing the enormous opportunity that the sweep of elections in 2021 represents – failing to provide a foundation for electoral success when the key tool to do so is in their hands.

Basic Income is that tool.

Adopted as party policy at our Autumn Conference just a few months ago by an overwhelming margin of 715 votes to 250, and with motions being passed and proposed by local parties all over the country, now is the time for the party leadership to commit and come in behind the grassroots on this.

What would that look like?

  • The Scottish Liberal Democrats should follow the Welsh in making a nationwide trial – not localised pilots – a manifesto commitment; both should elevate this to flagship status, not just one proposal among many
  • All mayoral candidates should do the same at the level of their cities and city-regions – not just supporting disparate motions for borough-level trials as is happening in London, admirable as this is, but making a whole that is more than the sum of the parts
  • Our local government movement should commit that every Liberal Democrat-led Council will write to the Chancellor demanding the right to host a localised trial, as the Hull party has campaigned for
  • Armed with these commitments, Ed Davey should lead a major event bringing together voices from all these parts of the party to launch this commitment, positioning himself and his economic expertise in support of all of them

This would create a national news story – and national debate – that would position us as a party with a different and positive take on what should happen, and one that is prepared to make noise.

Why would we not do this?

The naysayers might argue that we shouldn’t create a campaign for these elections around a policy we have committed to only in principle, not specifics. This I’m afraid is nonsense. The extent of NHS coverage was not defined before the NHS began to be a national conversation; like the creation of the NHS, this is a policy of principle, and it is the principle that matters.

They might then say we shouldn’t talk about it because it might be breathtakingly expensive. But this goes against the evidence that Liberal Democrats are otherwise so keen on. Indeed, trials, pilots and economic studies from around the world have shown this concern should be turned on its head: Basic Income is a highly effective economic stimulus, an investment not a cost, and a very good one at that. D66 have just made it a major pillar of their highly successful election platform on exactly this basis; the governing Canadian Liberals are having the same discussion.

With this in mind, I would argue it’s actively illiberal not to back Basic Income: if we worry that Basic Income might be a disincentive to work, in the face of evidence, can we really claim to believe either in evidence or in people? Can we really call ourselves liberals?

The kind of platform I have set out above would gain wide support. When I asked Sharon White – now Chair of the John Lewis Partnership and previously Second Permanent Secretary at HM Treasury – what she thought at a recent event run by Tortoise Media, she was all for this kind of approach, and her comments have since been widely and positively reported, even in the Daily Telegraph.

There really is no good reason not to do it.

This Conference represents a moment when we need to step up for the sake of the country. Basic Income is the key to doing it. I really hope we do.

* Jon Alexander is a member of the council of the Social Liberal Forum and of Sevenoaks, Dartford and Gravesham Liberal Democrats

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26 Comments

  • “Basic Income is that tool.”

    Until a respected body like the IFS validates UBI, then it’s not.

  • David McKenzie 19th Mar '21 - 1:56pm

    Jon as always well written, well detailed and irrefutable as to the direction we should be taking. I know who my first call will be to if elected in May 🙂

  • Jonathan Alexander 19th Mar '21 - 2:25pm

    @David Raw with all due respect, is Sharon White not respected? Is D66 not respected? Are the Canadian Liberals not respected?

  • Simon McGrath 19th Mar '21 - 2:29pm

    “Hello I am from the Lib Dems”.
    “oh hello, why should I vote for you”
    “we have a great policy on paying everyone a basic income ”
    “That sounds interesting , how does it work”
    “Everyone would get a basic monthly income from the Government ”
    ” oh , that sounds good, how much?”
    “I’m afraid we havent decided that yet but we have some people working on it ”
    ” Well, doing a bit of mental arithmetic if we gave everyone £100 a week that would be around £250bn a year”. Who would pay for it ?
    “Again we have a working party looking at that”
    “why dont you come back when you can give me some answers “

  • Jon,

    I agree now is the time. If there was ever a need to differentiate the LibDems from the pack it is now and a form of basic income – the guaranteed minimum income – is the policy. A minimum income of £95 per week is deliverable at minimal additional cost and targetted where it is needed most.
    You write “Basic Income is a highly effective economic stimulus, an investment not a cost, and a very good one at that. D66 have just made it a major pillar of their highly successful election platform on exactly this basis; the governing Canadian Liberals are having the same discussion.
    With this in mind, I would argue it’s actively illiberal not to back Basic Income: if we worry that Basic Income might be a disincentive to work, in the face of evidence, can we really claim to believe either in evidence or in people? Can we really call ourselves liberals?”
    The one caveat I would make is it should be combined with a program of job guarantees as advocated by the Alliance for Full Employment and TUC to make it both effective and deliverable. For MMT enthusiasts this article explains why http://heteconomist.com/job-or-income-guarantee-jig/

  • Lorenzo Cherin 19th Mar '21 - 2:42pm

    Jon

    Excellent piece. The sort of thing we need more of. Unfortunately the party is often to busy in navel gazing , to look at really important things it could do.

    It is too busy jumping on being, right on, and “progressive,” in words not actions. UBI is radical and progressive and can be implemented but won’t be by this govt or a Labour one.

    Nobody realises, and you need to, Jon, UBI, threatens the elitist, top down power of officials, bureaucrats. It can and would, if funded, mean, no need for the power of the DWP. It is about a far greater degree of dignity as well as a degree of greater equality.

    Anyone who has had to beg for their bread, literally, dealing with DWP, knows what I mean. Simon Mc, David raw, take note. Unless you have known poverty, or disability, you know little of this issue. If you do not know it first hand, accept the knowledge of those who do, and those who, here, like Jon, want to and do something about it!

  • The Lords Library paper has a list of resources from respected bodies that have undertaken extensive work on the policy https://lordslibrary.parliament.uk/coronavirus-and-the-case-for-a-universal-basic-income/

  • Jonathan Alexander 19th Mar '21 - 2:44pm

    @Simon McGrath
    “Hello I am from the Lib Dems”.
    “oh hello, why should I vote for you”
    “we really believe in people, and we want to give everyone the chance to contribute to the nation’s recovery. For example, we have a great policy on paying everyone a basic income”
    “That sounds interesting , how does it work?”
    “Everyone would get a basic monthly income from the Government ”
    “Wow, that sounds different – could that really be done?”
    “Yes it could – it’s like furlough but would reach everyone. The big worry is cost but the thing is, the evidence shows when you believe in people enough to give them a foundation to stand on, they WANT to work and WANT to contribute – it actually gives them the agency and hope to believe they can”
    “Wow you guys actually stand for something instead of just sniping around the edges and getting obsessed with tiny details! I’m going to vote for you!”

  • Peter Martin 19th Mar '21 - 4:00pm

    I notice that the word “universal” seems to have been dropped.

    So, what’s the difference between a BI and UBI?

  • David Evans 19th Mar '21 - 4:23pm

    Sadly for once I am going to have to disagree with Simon McGrath. I think the conversation will be much shorter than his suggestion.

    “Hello I am from the Lib Dems”.
    “oh hello, why should I vote for you”
    “we have a great policy on paying everyone a basic income ”
    “You do know these are elections for the [local council/mayor/Welsh assembly/Scottish Parliament – delete as appropriate], don’t you?”

    Sadly we still have so many people who believe that the road to national electoral success is simply achieved by adopting one or two ideas he or she is particularly keen on, and telling the public about them.

    Sadly, the truth is that the first of a great many steps to success is finding out what is concerning the public and finding a solution that they are particularly keen on.

  • Jenny Barnes 19th Mar '21 - 4:47pm

    “hello, I’m form the LibDems”
    “Oh? I voted for you in 2010, and you enabled 5 years of a Tory government. Goodbye”

  • @ Jonathan Alexander Come on, Jonathan. Don’t over-egg the pudding.

    1. The Canadian Liberals haven’t come out in favour of a UBI (Trudeau’s lukewarm). It’s not included as part of Chrystia Freedland’s autumn statement “for the government to inject fiscal stimulus in 2021, 2022 and 2023”.

    2. D66 . In 1994 D66 minister Hans Wijers publicly favoured the basic income, leading to negative reactions by his colleagues in cabinet. D66 endorsed his position in 1995, but did not incorporate it in its 1998 election manifesto.

    3. Yes, Sharon White is well respected, but since taking over at John Lewis (on a £ 900,000 plus salary) she’s busy closing stores, cutting jobs and facing a £ 543 million loss.. Sadly, as a long time customer, part of the problem is a decline in the quality of service by what used to be an admired brand.

    Personally, I’d be delighted to see a UBI trial in Glasgow if it could be done, and delighted to see it succeed…… as a Trustee of a Scottish food bank, why wouldn’t I, Lorenzo ? But – Nicola et al would need Johnson’s agreement which she won’t get. I’m sure the Duke of Rothesay would pass on his UBI to one of his ghillies – no doubt Dame Sharon would too.

    The temptation for Lib Dems now (in a current desperate wipe out situation) is to look for a magic silver bullet or a Holy Grail policy . They’d be better advised to do some sums (it’s called evidence based) and some polling research on the doorstep.

    Maybe opposing the billions spent on nuclear weapons might help, but I doubt if the party grandees would agree ?

  • Peter Watson 19th Mar '21 - 5:20pm

    @Jonathan Alexander “The big worry is cost but the thing is …”
    Unfortunately though, the rest of that sentence does not address that “big worry” about cost.
    I’m pretty agnostic ( ignorant! 😉 ) about UBI, but I think that a challenge for the party is that the areas in which it is strong and the areas which it is targetting, are relatively (very!) affluent, so the people behind the doors on which Lib Dems will be knocking are more likely to have the “big worry” that they will be footing the bill.

  • So, just out of interest, what is the current spend on benefits, pensions, tax credits, HB etc (adding in please the cost of all the heads, deputy heads, executive heads, officers and assistant involved in administering the benefits tangle, the costs of their equipment, offices, paper, electric, rates, etc etc

    Thing is, as a self employed person left without any help at all (living off a bequest in fact if anyone cares) I’ve seen a/e pals sign on, wait for hours to be verified, fill in acres of stupid forms (‘why are you not working?’ “Err you locked me and my clients down?” ) to have monthly assessments (because if you manage to earn anything someone has to work out the clawback of 66%) and a monthly ‘have you found work yet’ phone call from someone answering to a deputy someone in a building run by a head someone … and all to administer a ‘benefit’ of about £90 a week.

    Heaven help us !

  • john oundle 19th Mar '21 - 7:22pm

    David Evans

    “we have a great policy on paying everyone a basic income ”
    “You do know these are elections for the [local council/mayor/Welsh assembly/Scottish Parliament – delete as appropriate], don’t you?”

    Spot on

    How about actually focusing on ‘Local’ issues, council tax, pot holes, public toilet closures, planning issues etc.

  • The doorstep question is a reasonable one.

    Draft for Leaflet: LibDems call for guaranteed minimum income of £95 per week.

    How it works
    Every citizen or permanent resident who is a taxpayer, benefit claimant or student in full-time education is guaranteed a minimum income of £95 to live on.
    – Taxpayers receive it as a fixed tax and national insurance reducer via their PAYE code or self-assessment return. Currently the tax allowance of £12,570 provides tax relief of £48 per week for a 20% taxpayer and £96 for a 40% taxpayer. There is also combined employer and employee National insurance relief of £47 per week. All taxpayers would get the same total level of relief i.e. £95 (higher rate relief would no longer be available).
    – The current basic allowance for Universal credit for a single person is £95. This would be replaced with the non-means tested guaranteed income as would Job seekers allowance, carers allowance, income support etc. The minimum guaranteed income would continue to be supplemented by child benefits, disability allowances, housing benefits and other supplementary benefits based on eligibility.
    – The current nursing bursary of £5,000 will be replaced with the guaranteed minimum income. Those joining an under-subscribed discipline such as mental health nursing, live in an area of specific need or have childcare responsibilities will receive an additional £3,000 supplement, as is currently the case. The guaranteed minimum income will be made available to all students currently eligible for maintenance loans from the Student Loans Company.
    How it is paid for.
    The changes are largely paid for by restricting tax and national insurance relief to a fixed amount so higher earners pay a little more. Larger employers will no longer get national insurance relief on the first £9,500 of annual wages paid. There will additionally be no upper limit of earnings beyond which employee national insurance falls from 12% to 2%. But, all taxpayers including those earning over £100,000 will get the fixed amount of the tax reducer. Further tax changes (coupled with more generous work allowances for benefit claimants and introduction of a youth job guarantee program) include limiting tax relief on pension contributions to basic rate, equalising capital gains tax rates with income tax and unfreezing the fuel duty escalator.
    Who is excluded?
    If you are a taxpayer, benefit claimant or domestic student in full-time education you will automatically receive the guaranteed income either as a tax reducer, basic allowance or maintenance grant. If you do not fall in any of these categories then you will receive neither the tax reduction or income payment. Non-working spouses or other individuals without taxable income who are not eligible for universal credit or available for work, will not benefit from the fixed tax reduction or be eligible for the Universal credit payments.Child benefit, however, will be returned to its universal provision without a higher income charge. State pensions and pensioner benefits are unaffected by this working-age minimum income guarantee.

  • Showcase Basic Income at the Hartlepool bye-election.

  • @ Manfarang Ahhhhh….. the Hartlepool by-election….. Memories, memories…..

    Where in 2004 we nearly won it with Jody Dunn (34.2%, 10,719 votes). Who would have the nerve to say the Coalition was a failure after a massive 1.8% (746 votes) in 2017 ?

    But all is not lost. The vote more than doubled to 4.1% (1,696) in 2019 after Ms Swinson wisely said she “wouldn’t hesitate” to use a nuclear weapon if she was Prime Minister. An extra 950 voters rushed out to support mutual destruction.

  • I’m 100% behind this. We need eye catching, stand out policies. And Vision. not everyone will be in favour but we aren’t looking for a majority are we? Just to get back on track and be a party offering something different: post Covid this will go down well.

  • Sadly being 100% behind another thing that the vast majority of the electorate have no interest in, in elections for bodies that have no power to deliver the policy. is just another way of kicking the can up the road. Unless we confront and end this self comforting role of endlessly talking about offering something different (usually because no one else can be bothered), instead of finding out what people are concerned about and offering a better solution, we will remain a niche party in decline and “Losing Elections” will be sung with ever greater gusto and poignancy at Conference Glee Club for decades to come.

    These are local elections, not a General election. We have to get back to basics and win seats, street by street, one ward at a time. Knocking on doors and listening to people will be key so long as people are happy it is safe. Any other approach is mere self indulgence.

  • David, I agree with your emphasis on LOCAL elections, but longterm, increasing our support depends on both national and local activity. The latest Green Party political broadcast showed green councillors and what they achieve on their local council; much better than ours.
    However, I must agree with Jon’s point that our national messaging must be simple, concentrating on the principles and how we change the system to make it fairer for individuals.

  • Phil Wainewright 20th Mar '21 - 11:06am

    I’m all for listening to people and addressing their concerns, but from some of the comments on here it sounds like the doorstep conversations are supposed to go something like:
    “Hello I am from the Lib Dems”.
    “oh hello, what do you believe in?”
    “Well, what would you like us to believe in?”

    It’s the job of a political party to a) have some beliefs and visions and b) show how they’re relevant to voters. Millions of people this May will vote for candidates not because of their focus on local issues, but because they identify with what they perceive those candidates believe. Yes those candidates will also have taken a stand on local issues – no one here is arguing for abandoning that. But building up this party’s support depends on also building up a perception of our identity and values.

    I fully agree with Jon about basic income (personally I would argue for making it universal but BI would be a great step in the right direction) and I’m encouraged to see such a robust debate in the comments here. It is a great policy and one that, done right, allows us to promote our vision and beliefs in social justice, individual dignity and economic self-determination.

  • So at one extreme we have Jo Bourke’s ‘simples’ [not] explanation of something that is not actually UBI (as it excludes various adults such as non working spouses) but involves, at first glance, 6 different Tax and NI increases. At the other we have Jon Alexander who says never mind tiny details (like how much and how is it funded) the vision alone will have voters flocking to us.

    So far I’m afraid this seems to be as well thought out and researched as past election winners such as Revoke (Lib Dems), the Poll Tax (Cons) or ‘free everything’ (Corbyn’s Labour).

    Simon McGrath takes the figures suggested above (about £5,000 per adult per year) and calculates a £250Billion price tag, rightly asking how it is to be paid for? Yet around £100 a week/£5,000 a year doesn’t remotely meet the aspirations of some who have espoused the cause on LDV before. They have waxed lyrical about it being enough to allow people to decline minimum wage, boring jobs, so they can ‘find themselves’ whilst avoiding poverty. So that version of UBI would see payouts -and costs – at 2 or 3 times the level of £100 a week. I think that when the working party finally comes up with some detailed and costed proposals there are going to be a lot of disappointed enthusiasts out there!

    As for the areas volunteering to pilot UBI-are they also volunteering to pilot the tax, NI and benefit changes that would be needed to fund it? Otherwise, simply giving away ‘free’ money is not going to be real indicator of anything much.

    Now I’ll get back to writing our next round of leaflets for the Council elections.

  • Joseph Bourke 20th Mar '21 - 12:53pm

    David Evans,

    Pollsters Yougov found last summer that a majority of the public support paying people a universal basic income to ensure their financial security, introducing a jobs guarantee to keep employment stable, and bringing in rent controls to limit housing costs https://www.independent.co.uk/news/uk/politics/coronavirus-poll-universal-basic-income-rent-control-job-safety-a9486806.html
    “The poll is the latest evidence that the crisis has opened up Britain’s political terrain to new ideas – with a Tory chancellor unveiling an unprecedented package of state support for families and businesses that would have been unthinkable just months ago.”
    “Research reported by The Independent last week also found that the public want the government to treat the climate crisis as seriously and urgently as it has the pandemic – another sign of the public mood.”
    It is quite clear, the five big themes on the minds of the general public are inequality; jobs; the housing crisis; climate change and local government services including social care.

    Paul Holmes,

    It not only LibDems calling for a basic income. Last April, Ed Davey joined over 100 MPs of different parties to sign a cross-party letter to the Chancellor calling for a Universal Basic Income (UBI) to be implemented post-lockdown https://thetorch.org.uk/lib-dems-support-universal-basic-income/
    As to the cost of a full UBI that would be more ambitious thana guaranteed minimum income. This article costs a full UBI at £67 billion per year or 3.4% of Gross Domestic Product (GDP), https://basicincome.org/news/2020/09/the-cost-of-a-full-basic-income-for-the-united-kingdom-would-be-67-billion-per-year-3-4-of-gdp/
    “The cost of UBI is often exaggerated because many authors focus on its ‘gross cost’: the size of the UBI times the population. The gross cost of UBI is not a cost in any meaningful sense, because it ignores the great extent to which the new taxes people pay to support UBI are cancelled out by new money they receive in UBI. The real cost of UBI is the ‘net cost’ – the amount people receive or pay after subtracting the amount they pay themselves. The net cost of a full UBI for the UK is only about one-third its gross cost.”
    The gross cost of the personal tax allowance is around £110 billion and national insurance lower threshold circa 65 billion. This £175 billion of costs disappears when the allowances are replaced with a basic or guaranteed minimum income.

  • Firstly, I accept that this year’s election are not national elections and so UBI is not a good issue to campaign on. So, looking forward to a general election:

    “Hello I am from the Lib Dems”.
    “Oh hello, why should I vote for you?”
    “Because we aim to remove everyone from living in poverty”
    “Is poverty a big problem in the UK?”
    “Yes over 14 million people are living in poverty in the UK today”
    “What are you going to do about poverty then?”
    “We are going to restore the increase to benefits of £20 a week cut by the Tories in 2021 and introduce a great policy on paying everyone a basic income”
    “That sounds interesting, how does it work”
    “Everyone would get a basic income from the Government”
    “Oh, that sounds good, how much?”
    “It will be introduced it at £48.35 a week and it will replace the Income Tax Personal Allowance. Most people will not be affected. The existing benefits will not be affected and so the poorest in society will benefit the most. Thereafter, we will increase the amount in the same way that we got the Coalition government to increase the personal allowance from £6,475 to £10,600. And over time no-one will have an income below the poverty line and this will mean no-one will be living in poverty.”
    “Who will pay for it?”
    “The richest in society will have to pay more in taxes. The national insurance rate will be increased for them to 12% from the existing 2% and it will be extended to all forms of income such as unearned income from shares and poverty.”

  • Katharine Pindar 24th Mar '21 - 1:32am

    But, meantime, on the doorsteps this April.
    “Hello. I’m from your local Lib Dems.”
    “Hello, what can you do for me? My Council tax has just gone up five per cent!”
    “Yes, we have to revise the bands of Council tax and make it fairer for everyone.”
    “What about that Universal Credit then? my niece lost her baking business and she says that it’s barely enough to live on, and yet Rishi Sunak is talking of reducing it come September!”
    “Yes, we have to make sure it stays. And we want to see the other benefits increased as well, nobody can live on them for long.”
    “You’re right. it’s diabolical what people have to live on – my mate who was on sickness benefit, that’s a pittance.”
    “We agree, and we want benefits increased fairly, but also fair pay. Did you hear that our leader Ed Davey is campaigning for carers to be paid more? Including those stuck at home, never mind in the Pandemic, stuck at home for years looking after elderly parents or perhaps a disabled child. They need more cash in hand.”
    ‘That’s good, then. Anything else?”
    “Yes, we’ve also agreed nationally that we want the government to pay everyone a basic income, as of right – starting maybe at £48.35 a week – and we’ve worked out how we can pay for it.”
    “Oh well, jam tomorrow, like. Not sure I believe that, but it’s a nice idea. Still, I’d rather you got something done about my council tax and enough benefit to live on, for now.”
    “Agreed, and we’ll be on the case. You know the local Lib Dems work hard for everyone here, and we aim for fairness all the time.”

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