I want to encourage all Liberal Democrat candidates in the local election to sign this pledge of support for trials of universal basic income (UBI). If you are a candidate in London you can sign a London-specific pledge.
This initiative is being promoted by the UBI Labs Network, one of the leading organisations campaigning for UBI in the UK.
The Liberal Democrats made UBI official party policy in 2020 and this is a great opportunity to show that party members up and down the country support UBI.
It may seem like a small thing to sign a pledge like this. After all, councils by themselves could not put such an initiative into action: they cannot raise the revenue to pay for it or change the tax code in ways that support it. So why bother?
And yet, and yet… every big journey begins with a single step.
At last year’s elections in Wales, 25 of the current 60 senedd members backed a similar pledge (and 105 candidates signed it). I was one of them.
I am sure that the strength of cross-party feeling demonstrated by this show of support played a part in the Welsh government’s decision to introduce of one of the world’s most important UBI trials to date.
And I think that strong support for these sorts of initiatives can help get the issue of UBI on the agenda and get more people behind the idea. All these small steps bring the prospect of a UK-wide Basic Income closer to becoming reality.
Financial security for everyone has never been more important, given the current cost of living crisis and the ever increasing queues at foodbanks. And Basic Income is a truly liberal policy idea that can tackle poverty and inequality.
Right now there are a number of different organisations campaigning for UBI in different ways: While the UBI Labs network lobbies locally for these pledges of support, the Basic Income Conversation tries to get people up and down the country talking about UBI, by organising small meetings with friends and family to discuss what a Basic Income is, and encouraging people to think about what they would do if they had a small regular income.
All of them, in their own way, are getting more people familiar with the idea of Basic Income and growing support for it. The Liberal Democrats are currently putting together a Basic Income policy proposal and I look forward to campaigning on that platform at the next general election campaign. In the meantime, I believe we should be supporting all these initiatives that are helping to expand awareness of Basic Income.
I hope that you agree with me and will put your name to one of these pledges.
* Jane Dodds is Leader of the Welsh Liberal Democrats
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30 Comments
Can please you share with us a rough costing ( say to the nearest £5bn) and how you would propose to raise the extra cost?
Ooh a pledge! The last one went so well!
UBI not focused enough on the poorest. So it’s absurdly costly.
Better to go for well-above inflation increases of benefits.
The great thing about IBI – and raising benefits won’t achieve this – is that it breaks the link between basic income and work. It recognises the right of everyone to a basic level of income and if they are happy to live on it, then they can.
This is why some people are against the whole idea because they still believe that poor people and the unemployed are work-shy and must be forced to work in order to reach a basic income. It’s the whole ‘scrounger’ mentality that has bedevilled our society and made it very difficult to tackle poverty.
Liberal Democrats, in our constitution say that people shall not be enslaved by poverty..
Better benefits will not achieve this. UBI, if set a a real living wage level will.
UBI will also sweep away a whole swathe of means tests and different benefits at a large saving to the public purse. Now, don’t get me wrong, UBI will cost quite a lot, but if we Lib Dems are serious about sweeping away poverty and allowing everyone to live a decent life, then we should not hesitate.
I agree with Mick Taylor – we already (more or less) recognise the necessity of a basic level of income, we just choose to do it via an absurdly complicated and beaurocratic benefits system, and cling to the concept of “deserving” and “undeserving” poor.
UBI is a far more dignified and efficient way of providing a basic subsistence level of income, and a significant part of the cost can be recovered from those who don’t need it via a simplified tax system.
Lib Dems have had great success in a couple of parliamentary by-elections in the last year, electing Members of Parliament who could help “put such an initiative into action”.
How well was UBI received by voters in those campaigns?
There is no necessary connection between work and benefits. Many of the most vulnerable can’t work.
It’s absurd to give a benefit – UBI – to say 80% of adults and have 50% then paying back more than received in taxes to fund it.
If it really is U, then it’s even more absurd.
Please let’s have some figures
I’m skeptical about whether UBI can work but only way to find out is through trials, collecting feedback, further research etc. However, how much is going to be allocated to these trials when mechanisms such as raising taxes can’t be utilised? How much good data can be collected?
Right, real living wage level, is it, Mick?
Great idea.
That’s 10 quid an hour (9.90 to be precise), which is about 20k per year.
About 54 million over 18’s.
Cost of UBI: a mere 1.080 trillion.
Save on benefits? Yes, total cost of benefits: 212 billion per year. Call it 220 billion.
So taxes need to rise only by an EXTRA 860 billion to pay for the UBI.
Given that all adults, post UBI will pay income tax, it only comes to around 17k income tax EXTRA per head. Or how about sensational increases in VAT?
Good luck with that.
I’ll stick with re-distributing to the people who really need it. It’s fairer and targetted and doable.
A real UBI isn’t at anything beyond the level of pocket money.
I support the principle of UBI but would have thought the party would have learnt the lesson of tuition fees and avoid the word “pledge” like the plague !
There are finite resources in the Country and in the World.
Unless we find a way of sharing these out equitably then we will end up with those without fighting those with. UBI is not an easy fix and may not be the final way of sharing but we have to start somewhere and soon.
Yes, I agree with that David.
But UBI is not a solution; it’s fantasy politics. It’s not doable.
As David says, “There are finite resources in the Country and in the World.
Unless we find a way of sharing these out equitably then we will end up with those without fighting those with.”
Sadly our leading lights are great at coming up with ideas as how to hand out extra money (the nice easy bit), but never make any suggestion as to how to get the money to pay for it out of the hands of the mega rich (the difficult bit).
“Sadly our leading lights are great at coming up with ideas as how to hand out extra money (the nice easy bit), but never make any suggestion as to how to get the money to pay for it out of the hands of the mega rich (the difficult bit).”
Land Value Tax?
Hi Nonconformist, good to hear from you again. While acknowledging that you are very much a valued member of our Lib Dem community, I might humbly suggest you don’t quite come in the category of leading light of the party. An article from Jane or anyone of her ilk on LVT or anything similar would be appreciated, but for some reason it never happens.
However, part of the problem with LVT is that it only targets those who are UK land rich, not those who are financial asset risk like Google, Amazon, venture capitalists, merchant banks etc etc.
To me LVT is only a partial solution at best.
@David Evans
A partial solution would be better than no solution.
And land doesn’t get up and move offshore.
But I do also wish to see google, amazon and others of their ilk taxed properly.
Agreed
@David Evans @Nonconformistradical
I think part of the thinking about modern-day LVT is that it should be applied not just to literal land but to other things that might be called artificial but essential monopolies – rights to flight corridors, use of radio frequencies, access to national infrastructure and so on. All a bit more nebulous than land but recognising that not all wealth in the modern world depends on that one finite resource, but that other resources – even if developed by human labour and ingenuity – are also finite and as such give excessive rewards to those who win control of them at an early stage.
Might a problem for the party with UBI, LVT, and other policies, be selling them in the target “blue wall” seats where voters could feel they will be picking up the bill?
In a by-election, a candidate can ignore – or even contradict – party policy, but a general election requires a national message, and in the absence of “stop Brexit” (and “Corbyn bad”), what will that be?
Jane Dodds states we “made UBI official party policy in 2020”. What we actually agreed was that a working group should be set up to come back to conference with a scheme of UBI and it was told also look at how it could be funded. The UBI Working Group has been wound-up without producing a policy paper on a UBI (but it did produce two consultation papers). The UBI issue has been passed to the Fairer Society Working Group. At the consultation session at Spring Conference Julia Goldsworthy (Chair of the Fairer Society Working Group) seemed to say that the Policy Paper will include a UBI option along the lines set out in the UBI consultation papers.
I am surprised that Simon McGrath asks for rough costings of a UBI. In the second UBI Consultation Paper a UBI of £71 per week is being proposed and the gross cost is £152.8bn. With the abolition of the National Insurance Threshold and the Income Tax Personal Allowance as there were in September 2021, savings in welfare spending and the increase in government revenue because of increased economic growth the estimated funding requirement is £30bn (page 13 Consultation Paper 146B).
The Consultation Paper also proposed funding £29.8bn of this £30bn “with four major tax changes: re-allocating the 3 percent corporation tax rise (worth around £10 billion) and capital gains tax reforms (worth around £5.6 billion) already in the Liberal Democrats’ 2019 manifesto, and additionally eliminating capital gains tax uprating at death (worth around £1.2 billion) and reducing pension relief to the basic rate of tax (worth around £13 billion)” (pages 14-15).
30bn.
You could actually do something targetted and useful with 30bn.
25% increase in all benefits.
Or make major inroads on a series of problems which impact on peoples’ lives: buy more ambulances and train more para-medics + more funding to the legal system to reduce dreadful back logs + ….+…+….
This is the other serious downside to UBI indulgence: the massive opportunity cost.
Targeted benefits miss many of the people they are supposed to be targeting. The increasingly complex application forms ensure that many don’t claim the benefits they are entitled to.
Universal benefits don’t have that problem as people get them as of right.
The Liberal Party supported combining the tax and benefits systems and using negative income tax to give benefits to people entitled to them. I think that UBI will be best run by a negative income tax system, where only one form needs to be filled in each year and people either pay tax or get negative income tax according to their circumstances. UBI would be shown as income and those deemed rich enough not to need it would have it taken away as tax.
Targeting benefits needs an army of people to administer the system, mountains of forms to fill in and huge computer systems to boot.
To those who say this is unaffordable, I recommend ‘The Deficit Myth’ by Stephanie Kalton, which debunks much of the rhetoric about tax and spending that dominate our political discourse.
We can and must afford UBI and we absolutely must stop conspiring with the other parties to keep alive the myths about people who receive benefits. We need to move away from the idea that people absolutely have to do paid work and be much more open to allowing people to live on a basic income and contribute to society in ways other than as wage slaves.
Yes, UBI would be best administered through the tax system. That’s certainly true.
Mick, are you really advocating shaking the magic money tree instead of doing some painful thinking about how this would be funded?
If that’s so, you’re going to have absurd levels of inflation.
No serious adherent of MMT thinks you can hand out 20k a piece without dire inflationary consequences.
Chris Moore,
Indeed targeted benefits are a more effective use of funds. With a UBI many spouses of people on earnings high enough for them to afford not to work will receive the UBI and it is problematic to come up with a way of recovering it from these couples.
If we assume there are 8.2 million claimants and increasing benefits by £20 a week costs £8.2 billion, then £30 billion would increase benefits by just over £73 a week. This compares to single claimants being £26.27 a week better off under the proposed UBI system in the UBI consultation papers because we proposed reducing their Universal Credit by the taper (63%) on the UBI amount.
I believe that if the UK government increased its deficit by more than 3% of GDP (about £63 billion) when economic growth is forecast to be zero this would lead to inflation. We say that £71 a week (£3692 a year) would cost gross £152.8 billion, so £20k would cost £827.7 billion.
Mick Taylor,
I am not convinced that members on our committees and policy working groups understand that it is possible for the UK to borrow a lot more than neo-liberal economists state without causing any economic problems.
@ Chris Moore, @ Mick Taylor
“No serious adherent of MMT thinks you can hand out 20k a piece without dire inflationary consequences.”
Largely true.
Unless, perhaps we add something like, ‘without making a significant extra contribution to the economy in exchange’. This is why MMT adherents, including Stephanie Kelton, largely favour a targetted Job Guarantee rather than an untargetted UBI.
Stephanie makes a valid argument in her book “The Deficit Myth” but it does need to be read in its entirety. You’ll find her telling us that the government’s deficit is everyone else’s surplus. This means that the government can only run a deficit if everyone else is running a surplus. Equally everyone else can only run a surplus if the government is running a deficit. The government needs to accommodate the wishes of everyone else, both in the domestic private sector and overseas, to run a deficit when necessary but there will be times, if everyone else doesn’t want to run a surplus, when it cannot and should not even try.
This means that any calls to ‘fund’ a UBI by a running a continual deficit aren’t at all valid.
@ Michael BG,
“I am not convinced that members on our committees and policy working groups understand that it is possible for the UK to borrow a lot more than neo-liberal economists state without causing any economic problems.”
That was certainly true during the period of the coalition but it may not always be the case. Then everyone else wanted to save, ie lend to the government, so the government needed to ‘borrow’ and spend more to prevent the economy falling into recession.
The situation is less clear cut now.
Malcolm, Thanks for the thought on ‘ artificial but essential monopolies,’ but immediately it fails the old doorstep test – can you explain it in 10 words to a normal member of the public. As for the ‘Newspaper Headline Test’ or the ‘Snide Radio Interviewer Test’ – sorry its another fond dream for theoreticising Lib Dem anoraks.
Agree that Kelton needs to be read in full. She argues that it is possible for governments that have their own currency, like the UK and the USA can fund projects, AS LONG AS THEY ENSURE THAT INFLATION IS UNDER CONTROL.
I don’t think that because I think MMT is a better approach than neo-liberal policies that I am calling for permanent deficit funding. I have found that most critics of MMT (including Vince Cable) make this accusation and that suggest to me that they haven’t actually read anything about MMT except criticism of it.
Read the book, then talk about it, please
David Evans
I’m not sure whether it’s the details of LVT that you describe as failing the “old doorstep test” or the idea of a UBI.
As for LVT, there would be no need to go into all that detail on the doorstep. Tell people it’s a tax on the unearned value of land and how much you think it would raise. I mean, Income Tax is extremely complicated if you try to get into it, but people have no problem with the general principle. I don’t think LVT has the magical properties sometimes ascribed to it here, but it’s certainly a good idea.
As for UBI, yes, I agree. Although I am, I think, in favour of the principle, I can see no way of selling it to the public and I think we’re a long way from being able to afford the deadweight cost. You can interpret “afford” fiscally, economically or politically as you like, but it comes to the same thing. We’re more likely to see the end of the monarchy than the introduction of a meaningful UBI, and I have no hope of either in my lifetime.
There have been plenty of “trials” and within their remit they worked. They showed that people like money. The whole point of UBI is universality. No trial that does not include everybody is a trial of UBI. UBI will involve increased taxes on the better off. A trial that only tests the benefit part is not a meaningful trial. If you want to test the concept in a way that doesn’t frighten the electorate, it can only be done by the UK government and it would involve introducing the benefit at a low level (£2514 p.a. would be a direct replacement for income tax allowance) while keeping all existing benefits at a correspondingly reduced level.
This would show that the mechanism was workable and would provide some extra support for those groups that fall through the cracks in the current system. I don’t have exact figures for this because government statistics only tend to cover categories the government is currently supporting but it is likely to be well under £10 bn.