How a Universal Basic Income could make Britain more liberal

The news of a trial of universal basic income in Jarrow and East Finchley sparked a true watercooler moment. For a party like the Lib Dems, it is important to recognise what that means. It wasn’t a viral meme to like, or share, and it wasn’t a culture war issue that triggered rage, or anxiety. In conversations in staff rooms and pubs, in social media spaces from LADBible to Gransnet, people were talking about an idea. 

There are lots of reasons why. The cost of living crisis, obviously; the fear by every political party that they interrupt the Tories whilst they are making mistakes has led to a dearth of ideas; and, finally, the pandemic.  Arundhati Roy wrote in April 2020 “Historically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different. It is a portal, a gateway between one world and the next.”

The idea is simple to grasp. It is money that is always there, if your life changes, or you want to change your life. It appeals to both optimists and pessimists. Post Covid, we all know that our lives can change in a moment. UBI supports those in need, with the dignity of liberal choices. 

This national conversation echoes the support we found on the doorstep and in focus groups. 

The trial will not tell us everything we need to know about basic income, but it will tell us a lot about damage the current welfare system causes. The gap between losing your job and receiving Universal Credit is a minimum of 5 weeks, and can be up to 12 weeks. Very few people can sustain that wait without getting into debt that is almost impossible to climb out of. Sanctions cause the same problem. Being unable to feed your family, owing money everyone you know, is bound to make you feel worthless and a failure. When a bill you cannot pay lands, you will panic. The cure is not antidepressants or mindfulness. The cure is money. The thousands of people queuing at foodbanks are not there because they need help to shop. They know how to do that, they just lack the means. 

Disabled people are trapped by the fear that showing any activity at all will mean an end to their ESA or PIP. Others are trapped by conditions and thresholds. The mother employed to do rewarding, socially valuable, skilled work at above living wage, in a job for a charity that cannot afford to offer her another 2 hours a week will not save the Government a penny if she is forced into unskilled labour. The taxpayer will not benefit, whilst both she and her community loses. The teacher working as a childminder, because she cannot manage without the passporting to housing benefit that UC brings, is just as trapped, to the detriment of the community in a teacher shortage, as well as to Government coffers. 

We know, from the very high success rate of advice agencies, that decision-making in the benefit system is poor, which is both expensive and counter-productive. 

Universal basic income provides an answer to all of these problems; a controlled trial can highlight them and tell those stories. They are stories that need to be told, because, so that we all understand that there are problems that need to be fixed. 

The trial will focus on the health and wellbeing benefits of a basic income. This is a deliberate choice. Firstly, because the harm the system causes ought to be brought into the light. The community were clear about that. Second, because it bolsters the economic argument for UBI. Modelling suggests that between 125,000 and 1 million cases of depressive disorder could be prevented or postponed (depending on the level of payment) at a cost saving of £125 million – £1.03 billion to the NHS and social care. Similarly, between 125,000 – 1.04 million cases of clinically significant physical health symptoms could be prevented or postponed, with potentially even greater savings.  Health is an issue that motivates voters, in a way that welfare benefits currently do not. Finally, it reframes poverty as a public health issue, rather than an individual one. 

So it will come as no surprise that the Liberal Democrats in City Hall have been very supportive of this trail in Finchley. In fact, we have been pushing the Mayor of London to trail one. As recent as last December the Liberal Democrats tabled a motion asking the Mayor to run the trail. It seemed like a logical step considering that we had successfully passed a motion on declaring a Cost of Living Emergency and that the Mayor himself had joined Lib Dem Assembly members and over 300 others politicians from across the UK who signed a letter to the Prime Minister to launch substantial pilots on UBI and a taskforce to explore its potential.

There is already growing evidence that a trial provides invaluable evidence such as the scheme run by the Welsh Government for care leavers, an idea Welsh Liberal Democrat Leader Jane Dodds has championed in the Senedd. And recent research by the Royal Society of Arts indicates that such a scheme would be affordable, feasible, popular and have a significant impact on mental health, youth and social crises.

A trial of UBI will tell us about UBI, but it will show us so much more about the often hidden pain of a life on benefits at the moment. And now as we seek to rebuild after the impact of COVID-19, is the perfect moment to run it. 

I hope I will be able to discuss this with many of you at Liberal Democrat Conference this weekend at our fringe event “How a UBI Could Make Britain More Liberal” with Welsh Liberal Democrat Leader Jane Dodds MS at 19:45 Sunday 24th September in the Meyrick Suite of the Bournemouth International Centre.

* Hina Bokhari is a Liberal Democrat member of the London Assembly and Julia Hines is a community volunteer

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17 Comments

  • Peter Martin 20th Sep '23 - 1:46pm

    Not another article on the UBI !

    “the cure is money”

    Actually is isn’t. There’s a passage in the Ragged Trousered Philanthropists where Owen explains the folly in thinking this.

    The cure is an more equitable distribution of goods and services which also have to be created. So therefore we can’t just pay everyone a sum of money to keep them out of poverty. We also need them to help create the goods and services!

    In other words we need everyone to work and then receive a fair share of what they create in return. Sure, in a money based economy this will mean that everyone should be paid enough money to provide for the essentials of life. However we still need to recognise that these come from the labour power of workers and the support of nature.

  • Can the advocates of UBI simply state what the actual payment will be, or should be, per person?

  • Katharine Pindar 20th Sep '23 - 7:07pm

    I am sorry to see this article. Our party turned decisively at York Conference last spring to support Guaranteed Basic Income rather than UBI, because GBI will target people in most need, rather than giving everyone a small sum. Promoted as it should be to other progressive parties, we could hope that in the decade of two terms of a Labour government, this policy to end deep poverty and the need for food banks will be effective. What is needed now is for our party to back it thoroughly in our next Manifesto and in our campaigning in the country.

  • Peter Davies 20th Sep '23 - 9:04pm

    Any scheme for ending poverty or reducing inequality and financial insecurity requires raising taxes as well as giving money away. That’s why trials are complete nonsense and why neither scheme proposed to spring conference could ever be a manifesto policy. Which option targets people most in need depends entirely on how we raise the money.

    Simon. Most of us advocates of UBI could give you a figure though we might all disagree on what it should be. The amount in option A of the motion was a direct conversion of the NI and income tax allowances (about £4k). I’d be happy with that if all the tax rises were on direct taxes that the poor don’t pay. If it involved indirect taxes, it might need to be a bit higher to compensate.

  • Simon McGrath 20th Sep '23 - 9:36pm

    The article makes a good case for a better welfare system and none for a UBI. As usual there are no costings.

  • Simon McGrath 20th Sep '23 - 9:56pm

    Actually there is sort of implied costing in here. The publication linked to this bit . “Modelling suggests that between 125,000 and 1 million cases of depressive disorder could be prevented or postponed (depending on the level of payment)” has some figurs associated with 3 levels of basic income ( the 125, 000 figure is linked to their case 1, the 1m to their case 3. Its a bit complicated and not easy to understand but a single househlder in their lower case would get £10.6k , rising to £15.3k for the top case. Very roughly if you said there were say 40m adults below retirement age ( it should be said tey also want to give between 50 and £100 a week to children) the cost comes out around £450bn to £650bn a year.

  • The gap between losing your job and receiving Universal Credit is a minimum of 5 weeks, and can be up to 12 weeks.” …. so why not propose simply fixing that gap? You don’t need to introduce UBI to fix that problem!

  • Peter Martin 21st Sep '23 - 4:42am

    The problem with a GBI is that hardly anyone really knows what it is. When I googled the term to check my own understanding, the first references were to a UBI. So many might assume it’s just another term.

    I doubt, though, if many understand properly what a UBI is. When I mentioned it in conversation recently just one person had actually heard of it. The concept did provoke some mirth.

    So whichever way you go I’d say you’ve got your work cut out to convince sceptical voters who might well be forgiven for thinking LibDems are somewhat removed from reality.

  • Peter Davies 21st Sep '23 - 7:16am

    @Peter Martin GBI is quite simple to explain. It’s Universal Credit (renamed so it won’t be associated with the coalition). Option B put forward two levels: one that they knew could be afforded (because it’s the same cost as UBI) but couldn’t say how and an aspirational one that they knew could not be afforded.
    @Simon R. UC requires means testing and that can’t be done instantaneously. We could and should get it down a bit but it will always be a problem. Any system that involves humans assessing other humans will have delays, mis-assessments, appeals and more delays.

  • Peter Davies 21st Sep '23 - 7:34am

    One way to reduce the delays would be to allow people who get short-term jobs to remain on the books as zero-level claiments. They would need to report their earnings like a claiment but get no money. When they reported a low enough income (or none), they’d get their payments automatically without the delays.

  • Katharine Pindar 21st Sep '23 - 10:03am

    The principle of Guaranteed Basic Income is I believe different from that of Universal Basic Income. It goes back to the principle of William Beveridge, that no-one should be left destitute when he is unable to provide any means for himself. The Guaranteed Basic Income would be decided each year by a new Commission, and be sufficient to ensure that recipients would be raised from deep poverty and the necessity of using food banks. We should have this in our Manifesto, now we have decided on it, and discuss further the taxation reforms that will enable it to be paid for. This party is committed to reducing poverty, unlike the others, and this policy is a start to doing so.

  • Peter Martin 21st Sep '23 - 10:22am

    @ Peter Davies,

    So GBI is a just another name for UC but implemented in a more humane and generous way? This is what you’re going to say on the doorstep?

    The way UC works isn’t widely understood in any case so it probably won’t make anyone the wiser. It will leave everyone wondering why you want the name changed. Those of a more radical disposition who were probably against the concept of UC when it was first introduced will just dismiss it as a repackaging of a failed Tory initiative.

    I have asked the question of why, if you’re so keen to eliminate deep poverty, the Lib Dems don’t have a policy on the level of minimum wage. You’ll just have to say to anyone who asks that you’re in favour of it being £15 ph or whatever figure you think reasonable. No-one can fail to understand what this means.

    I appreciate it won’t be a complete solution but a higher minimum wage has to be part of the answer when a high percentage of those in financial difficulties are actually working. It also won’t be subject to the same scrutiny in terms of higher taxes needed to pay for it.

  • Daniel Mermelstein 21st Sep '23 - 11:32am

    The LD working group on UBI made a perfectly sensible proposal for an affordable UBI back in 2021.
    We just decided to bury it… it’s not even on the LD website. I’ve made a link to it here: https://drive.google.com/file/d/1WRW8A1N2MlV8mEOasNjTe_AA-Yrh3rm6/view?usp=drivesdk

    Liberals have been calling for this for decades. It was a central plank of paddy ashdown’s recipe for a better society back in the 1990s.

    It’s just political cowardice that has prevented this party from championing UBI after taking the courageous step of making it party policy in 2020. Every since then everyone has tried to hide this, as if it was some crazy uncle up in the attic. It isn’t.

    Rehashing UC as some other means-tested nonsense with a nice name is not gonna cut it. We have to stop treating the poor as deficient; stop making them prove their poverty or their disability; stop making them jump through hoops to prove they deserve help.
    Instead, let’s recognise that poverty is simply a lack of money. So if you want to solve poverty give people money. The rest is detail. We can work out the detail.

  • This thread’s protagonists are support the existing paradigm that says that the under 66s should work to earn a living and not ‘sponge’ on the state, that people not working are feckless and it’s their own fault.
    We need a different paradigm. In our affluent society all should have an income to live on whether or not they work. Not a huge income, but a living income so that no-one is enslaved by poverty.
    That’s a big ask. Anyone knocking on doors knows that the biggest believers in the existing paradigm are those on low to medium incomes, egged on by the right-wing press. For the rich, work has always been optional.
    UBI or GBI is beside the point. If people don’t accept that it’s all right not to work all the time, the policy is doomed to ridicule and ultimate failure.
    There are alternatives. In Germany people pay higher contributions and have much more generous out of work and sickness benefits and much higher pensions. Politicians here seem frit to ask people to pay more and so we continue to have poor unemployment and sickness pay and lousy pensions, the worst in Europe.
    Personally, I support UBI, but I am not unhappy that the party will promote GBI. My fear is that we won’t sell it properly – as we failed utterly in 2019 to explain our EU policy – and the electorate will be convinced that the policy is pie in the sky and vote accordingly

  • Peter Martin 21st Sep '23 - 1:27pm

    @ Mick Taylor,

    “In our affluent society all should have an income…. whether or not they work. ….. That’s a big ask. ….. the biggest believers in the existing paradigm are those on low to medium incomes, egged on by the right-wing press.”

    So you’re going to persuade the voters there is no need for anyone to work? Good luck with that! As you say it’s a “big ask”. The right wing are in favour of not wanting all the people to work who would like to. They support the idea of ever increasing interest rates and tight fiscal policies to generate a pool of unemployed. You might want to look up the concepts of the NAIRU and Philips Curve.

    Working people do take pride in their work and in making a contribution to society. The principle of “from each according to their ability” is largely accepted. The “to each according to their needs” is somewhat more difficult but there is also a general acceptance that if anyone is sick or incapable for any reason then they should be given the support they need.

    I’m not sure what you expect of human nature. If you’re busy all the time, for example, working, doing the housework etc you aren’t going to be too happy if your partner regularly swans off to indulge in whatever may take their fancy. Or maybe you would? Most wouldn’t and they don’t need the Daily Mail to tell them that.

    https://www.economicshelp.org/blog/glossary/the-difference-between-the-nairu-and-the-natural-rate-nr-of-unemployment/

  • The Beveridge Report claimed to offer all citizens protection as of right “from the cradle to the grave”, thereby abolishing the hated household means tests that had characterised public relief in Britain during the Slump years of the 1930s The Beveridge Report and Its Implementation: a Revolutionary Project?
    “…much of the acclaim that greeted the report in the 1940s can be ascribed to its promise to provide benefits “as of right” to all contributors, removing the threat of means-tested assistance… The promise to abolish means tests was widely popular”.
    Beveridge, identified five major problems which prevented people from bettering themselves:
    want (caused by poverty)
    ignorance (caused by a lack of education)
    squalor (caused by poor housing)
    idleness (caused by a lack of jobs, or the ability to gain employment)
    disease (caused by inadequate health care provision)
    Abolishing means tests by integrating the tax and benefits system; providing high quality education for all; tackling the housing crisis; job guarantees for the long-term employed and a high quality health service free at the point of use should remain the core of the Liberal Democrat promise.
    Contributions to qualify for benefits do not have to be only NI they can be participation in voluntary actities, caring resonsibilities, job training etc.

  • How Liberals do like a quibble! (I am one, incidentally, since 1959)

    Why not start by giving every adult the same (obviously) UBI — though I prefer the name or label “NATIONAL INCOME DIVIDEND” — and then add it to the Income of each, so that the NID is income-taxed at the appropriate rate for their affluence.

    Even the poorest recipient of NID would pay Income Tax on it . Thus in a very real sense every adult in the land would face his or her compatriots on an equal footing, as a contributor to, and beneficiary of, the NID.

    Consider also the Saving to the nation: no army of expensive public servants trying to deny applicants for ‘Benefits’ by trying to disprove their claims to entitlement.

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