September will mark 10 years since I attended my first Liberal Democrat Conference, albeit this year’s Conference being entirely online. Having attended most Federal Conferences over that period I have witnessed numerous debates on topics ranging from public services to constitutional reform and from scrapping Trident to building more houses.
Lately, several of the motions that have come to be debated at Conference have been very uninspiring; all motherhood and apple pie, while not wanting to scare the political horses too much. Can we truly call something a debate if 99% of conference goers are already in favour of it? When we look back at the party’s history, we see moments of great policy radicalism and an unflinching willingness to be the shapers of the big ideas of tomorrow. A liberal party, especially a liberal party with only 11 MPs and currently on single digits in the polls, needs to be bold, radical and imaginative in its policy development.
I was therefore delighted to see that a motion on the Universal Basic Income (UBI) has been chosen to be debated on the evening of Friday 25 September. The Universal Basic Income is the idea that all citizens should have an unconditional guaranteed minimum income. It would enshrine the principle that everyone has the right to own some capital. A UBI would guarantee a social minimum for the poorest members of society and would be the jewel in the crown of the party’s commitment to social justice. I welcome the motion’s commitment to guaranteeing continued additional income support mechanisms for people in receipt of housing and disability support payments. I also welcome a UBI being rolled out on the basis of the best available international evidence.
A Universal Basic Income would deliver essential social protection for those who fall outside traditional realms of employment, such as carers, students, parents with child caring responsibilities, as well as continuing to deliver welfare support for the elderly, the unemployed and people with disabilities. It would also help to raise the income of low-paid workers and those in precarious employment situations. It would help to remedy the injustices faced by the so-called ‘WASPI women’ who have lost out financially as a result of changes to the pension system. Finally, it would give additional financial support for those wanting to pursue a new vocation (such as becoming a musician) or to set up a new business, where there may be a significant period of time before a secure income can be received.
A UBI would produce positive mental health benefits by boosting personal wellbeing and reducing the anxiety that comes from financial insecurity. A factor that has become evident following the COVID-19 outbreak. The recent UBI trial in Finland resulted in its participants seeing improvements to their mental wellbeing. The precarious employment culture of zero hours contracts, structural low pay in some sectors of the economy, and the potential impact of automation, all demonstrate why a UBI is becoming essential for our future socio-economic wellbeing.
Liberals are the setters of political paradigms. Whether it was on free trade, the right to vote, social welfare or the rights of women and LGBT+ people; where liberals lead, others follow. At the height of the Second World War, while the Nazis still occupied most of Europe, Keynes and Beveridge were already beginning to envision what the post-war world would look like. We Liberal Democrats, like Keynes and Beveridge before us, have the potential to set a new progressive political paradigm. Let us embrace their spirit and envision a new consensus for politics post-COVID-19. A UBI would form the heart of just such a new progressive consensus.
Achieving a Universal Basic Income should become the driving mission for our party. Let’s become the party of the Universal Basic Income. Let’s make the UBI an essential part of our party’s identity for voters across Britain. I hope that in future when supporters and party members are asked “why be a Liberal Democrat?” they will answer “to give everyone a Universal Basic Income”.
Fellow Liberal Democrats, this September at our next Federal Conference, let us take the first important step in making our party the party of the Universal Basic Income.
* Paul Hindley is a Liberal Democrat member in Blackpool, researching a PhD at Lancaster University and is the co-editor of When We Speak of Freedom: Radical Liberalism in an Age of Crisis.
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45 Comments
Paul
As you have been a member for 10 years, you may not be aware that UBI type proposals were adopted as party policy in the 90s, but almost as fast as they came, more “orthodox” economic voices reasserted themselves, and the policy was fairly quickly thrown out. I agree generally with your thoughts, but you will know the vulnerabilities of this policy to knockbacks, not least in our party, where economic views are so sharply and starkly divided! (qv Coalition policies, and reactions to them!)
As usual, not a moment’s thought has been given as to who qualifies and , just as importantly , who does not.
I will start the bidding at 5 years NI contributions on your own account, or 10 years from a parent or partner.
You say “Lately, several of the motions that have come to be debated at Conference have been very uninspiring; all motherhood and apple pie, while not wanting to scare the political horses too much”
Reading the UBI Conference motion F8 this is exactly how I would describe it. Nothing on the detail of UBI, nothing on how it would be paid for, nothing on the opportunity cost of such an expensive policy. It’s all UBI as a panacea, which I don’t believe it is. This is NOT how the Lib Dems have traditionally gone about policy – evidence based, costed, hard-nosed and well researched. There is no way I could support F8 as it stands.
The basic reason why I personally dislike the UBI proposal is that it gives the idea that there is an easy obvious though partial solution to manifold problems and will benefit everyone. How very Liberal! Of course, the Lib Dems want to benefit everyone! But it is to my mind slipshod thinking which I should be sorry to see our party committed to.
Among social justice measures that should be taken, I care most about the relief of poverty, with more than 14 million people in this country living in relative poverty. Despite the enormous implementation costs of a UBI scheme, reckoned by Compass to range from £177 bn to £210 bn and so often ruled out anyway on grounds of cost, if a UBI were introduced at the level of the current safety net, I understand that those wholly dependent on state support would be neither better nor worse off as a result.
What is needed for them is a higher level of benefits, as is also the case for working people who, in intermittent employment at the minimum wage, fall in and out of poverty. To live like that is to live without freedom.
The ‘jewel in the crown’ of our party’s commitment to social justice, Paul, should be the acceptance of the need for a new national Social Contract, which, in addressing the current social ills which equate to Beveridge’s ‘five giant evils’, would lead to us campaigning not only to end poverty, but to provide adequate health and social care, ensure universal good education and technical training, have affordable homes for all, and tackle both unemployment and underemployment. This should be the distinctive aim with which we should proceed, and which I shall go on fighting for us to embrace.
Perhaps we should look at a guaranteed minimum income designed to tackle poverty rather than handing out money to those who don’t need it.
Bottom line is, it is better to allow people to sit around doing nothing in their own homes or where they rent, than to allow them to become evicted / repossessed and then suffer from the related increases in crime, anti social behaviour, physical and mental health problems.
I’d like to see everyone back at work – but many jobs are lost, even entry level jobs are often now very very difficult to get, and repeated local lockdowns will kill off even more jobs – although I am not disputing that public health measures however harsh are needed.
I’m still working full time and have been through the virus, and I’d rather we paid people to do nothing – than evict or reposess their homes, and drag them through UC and benefit sanctions for no good reason – when there isn’t the work for them.
No idea what the solution is, but the last thing I want is the dog eat dog brutality and humiliation of DWP thuggery being the norm.
It all depends on what the detailed proposals are.
UBI also attracts the support from the Libertarian right who envisage one payment to replace all means tested benefits. Such a proposal would be deeply worrying because it would mean people in expensive housing areas would be evicted on masse and displaced to cheaper areas and people unable to work through illness or disability would be no better off than a job seeker in good health.
That doesnt mean UBI is a bad idea just tgat we have to tread carefully. I am attracted to any idea that removes the punishing egime of sanctions and increases incentives to work at the same time.
Can you give us a rough costing please – to say the nearest £10bn ?
You cannot be serious!
“Liberals are the setters of political paradigms”. ?? I bet that will go down well on the doorstep, especially in Blackpool!
There doesn’t seem to be much interest from Lib Dems in the idea of the Job Guarantee despite it not having the obvious flaws of the UBI. Like it won’t give money to those who don’t need it.
It will have other benefits too. It will set a floor for pay and working conditions that the private sector will have to at least match. Those on the left may be thinking that this is why you don’t like the idea.
http://pavlina-tcherneva.net/job-guarantee-faq/
Perhaps there are at least two ways in which “social justice” may be achieved?
One is to accept that “The Market” is humankind made, and not a creation of nature, and so arrange its rules, conventions and the like, visible and submerged, so that “The Market” serves all equitably.
The other is to make provision “beyond The Market” to achieve “social justice”.
U. B. I seems to come into the latter category.
As “austerity” was a Neo-Liberal economic policy and U.B.I appears to be an/the antithesis of Neo-Lib theory and practice, how might we accommodate this (apparent) inconsistency?
I haven’t got my notes here (I’m on holiday – sadly looking at LDV as it’s too hot to be outside!) but I remember being invited to run a session for a local party looking at UBI under the guise of Antony Atkinson’s great book https://www.tony-atkinson.com/new-book-inequality-what-can-be-done/. I thought it might be a hard sell but the large turnout overwhelmingly supported it as ideal for LD policy by the end of the evening. It’s exactly the sort of distinctive simple fair policy the party needs now to mark us out and stop us fading to ever greater obscurity. @JohnMarriott Paul’s supposedly talking to his peer group here not ‘on the doorstep’ so I think he’s allowed to use the word paradigm. And @SteveTrevethan, I don’t think we need to worry about accommodating the neolibs. They had their chance and look where that got us.
The only way to pay for it is for it to replace welfare, pensions, personal, tax allowance, child benefit, etc., etc – at 4000 per adult, 8000 for elders and 2000 for children it is just about doable pre-covoid, not sure now. So two adults with two kids would get 12k and then have to top up with work or live a very basic life. All income, inheritance and cg could then be taxed at a flat rate of say 40 percent if you wanted a really simple system. It would only be available to British passport holders to discourage illegal immigration etc, the newly arrived effectively paying a higher tax rate as they would not get the UBI, which seems fair as they have not made any prior contributions to the country.
So that married couple with one earner on 25k would actually net 27k whilst a single bloke on 25k would only get 19k, which seems okish given the simplicity of the system. Any fraud and it would be lifetime loss of the UBI.
In January Layla Moran, writing on LDV, called for a ‘trial for UBI’.
In July she wrote, “”As leader of the Lib Dems, I’d do this by campaigning and making the case for a Universal Basic Income (UBI)”.
Has there been a trial of UBI somewhere since January that we don’t know about ? I’m sure I won’t be the only one to ask this question…. Andrew Neil and Emily Maitlis just for starters.
https://twitter.com/EconTalker/status/1291734089670832131/photo/1
I very much hope that we go into the next general election supporting the UBI. However I am very sceptical of having such a major policy passed by a conference motion. Not long ago we had a welfare working group that looked into UBI and they rejected it. I also recall the Green Party in the 2015 general election supporting such a policy and their leader at the time, Natalie Bennett could not answer basic questions on how the policy would be funded.
So I worry that this policy is emerging through the Lib Dem bubble, similar to our Revoke policy at the last general election where like minded people are agreeing with each other and noone is asking the difficult questions.
It would be better if we had a policy working group to look into this policy in detail and come forward with a motion next year. The part of the motion that suggests “The Federal Policy Committee to work further on the details of
the implementation.” – perhaps that should have been done before presenting a motion? I would favour referring back this motion to enable this to happen. Given the position of the leadership on this issue (whoever gets elected) there will likely be a majority who favour UBI which is fine by me.
The current status quo for most people; that if you lose your job it is a financial disaster (particularly if you have a mortgage and a family) is not acceptable, so the UBI must be an improvement on that. But there is also a political problem we have to confront with the likely objections to people getting “something for nothing”.
What’s at issue with UBI isn’t actually the movement of money but the privileging of interests—not who is served but who’s best served.
Universal basic income needs to be considered in the context of an integration of the tax and benefit system. When considering the main tax reliefs available, at a cost (n terms of tax foregone) of over £101 billion the largest factor by far is the personal allowance. The next three largest are the national insurance contribution (NIC) thresholds and the capital gains tax exemption for main residences. Fifth largest is income tax relief for pension schemes, costing an estimated £24 billion in 2017/18.
A revenue neutral UBI or minumum income guarantee woud replace part of the personal tax allowance and NI threshold reliefs with a direct tax credit or cash benefit payment.
A Universal basic income as envisaged by the policy paper ‘A Fairer Share for All’ is more accurately termed a minimum income guarantee. The paper proposed to ‘pilot a secure income guarantee to test the impact of introducing an unconditional element to the benefits system’.. The policy was endorsed in a letter signed by 50 PPCs in the last election:
“We, Liberal Democrat prospective parliamentary candidates for the 2019 election, wish to highlight the party’s policy of trialling an unconditional minimum income element in the social security system, as endorsed by conference this year within our A Fairer Share for All policy paper. It is crucial that a liberal perspective on this debate is heard as widely as possible… as a prospective party of government it is crucial that the electorate hear about the full range of effective, progressive policies with which we want to tackle the deep evils of poverty and insecurity in Britain.”
“…we are proud to stand …on a policy of abolishing benefit sanctions – but as a party we have rightly committed to going further and piloting a minimum income element, accessible to all. One of the most damaging features of poverty is the chronic insecurity faced by the worst off in our society; as liberals, our policy will give a route to tackle this and pilot a new, twenty-first century system that will give people the freedom to make use of opportunities and improve their lives. We are proud to be standing as candidates with a party policy to secure pilots of such a system, given its potential for putting our Liberal Democrat values into practice, and as such we wish to highlight our personal support for this policy and our willingness to work to secure such trials in the next parliament.”
Agreed, Geoffrey Payne. Reference back of this somewhat sketchy UBI policy motion for further consideration by the FPC would, in my view, be the most sensible course of action – to enable a properly detailed *and costed* proposal (supported by evidence) to be brought to a future Conference.
Perhaps, at the same time or in parallel, the FPC could also consider more targeted alternatives to UBI, e.g. proposals for a minimum income guarantee (as suggested above by Kay Kirkham) or a potential Job Guarantee, as well as Katharine Pindar’s repeated advocacy for a “new national Social Contract”, etc.
David Raw,
this article Pandemic speeds largest test yet of universal basic incom discussess the program implemented in Spain.
@ Joe Bourke “On 15 June, spurred by the coronavirus crisis and its economic fallout, it launched a website offering monthly payments of up to €1,015 (US$1,145) to the nation’s poorest families”.
That’s not UBI, Joe, though it sounds interesting and promising. Does Ms Moran know about this ?
I just hope the party top brass (be it Moran or Davey) get properly briefed – if not it will be a car crash in any interview… no Charlie Kennedy excuses about the baby kept him up all night this time.
Sorry about the Fulham result… your lads deserved better… but maybe next year ?
I have asked many times for the reasons to adopt UBI and failed to get any response, so congratulations for your efforts to list a number of perceived benefits.
But on inspection, your list is equally valid as a checklist for a properly managed and targeted benefits system.
Therein lies the problem. An optimised and well run benefits system beats UBI every time because it gives money to those who need it and doesn’t waste it on those who don’t. This means that for the same cost to the taxpayer, the recipient of the benefits system should be better off.
Unfortunately, you enthuse about other benefits for the party, “setters of political paradigms” and so on. A rush to endorse UBI as part of a party branding exercise is a high risk strategy in my view. There is a narrow margin between genuinely sensible progressive initiatives and stupid Lefty virtue signalling in the eyes of the hard pressed taxpayers. I am still not convinced that paying a wage to people who don’t need it is a good idea.
Perhaps yet another comprehensive rethink of the universal benefit would achieve the desired result but I would imagine there is not huge enthusiasm for this and it does not provide glamour for the party. Specific improvements to the benefits system to plug some of the gaps you list is still a worthwhile thing to do and perhaps that should be the recommendation.
To all the skeptics asking for details: The whole point here is that there is more than one way to go about a UBI, and frankly any proposal from our party that could withstand the scrutiny of a general election will need to have been worked up in full integration with the rest of our economic policy. As such, it will inevitably need to be done by Federal Policy Committee (FPC), not by a member motion. In previous FPC working groups on social security, the relatively narrow terms of reference given to them by FPC has meant that UBI usually ended up being difficult to deal with adequately.
What this motion offers us is the opportunity, at a time when both of our leadership candidates support UBI, to commit ourselves as a party to the PRINCIPLE of UBI, giving FPC a firm steer that we want to move this policy forward. The details can be examined properly in due course (eligibility, how much do we claw it back from those making enough money on their own?, mechanisms for delivery, etc.). What this motion does is assert the principle of universal support; that rather than have a welfare system predicated on separating the deserving from the undeserving, we advocate a society in which all citizens have the security that comes from UBI.
I don’t see any good reason to give £200bn a year to people who don’t need it in preference to spending that money on health, education, police, defence, housing, transport, local government, welfare for the poor and tax cuts.
That said there’s a couple of good ideas behind UBI. Let me characterise it as a welfare system in which
a) if you are out of work, it is unconditional
b) if you are in work, the taper rate is the income tax rate
a) is a brave and radical proposal that will be tremendously unpopular for good reason. But it is fair to say that the current system of conditionality is arbitrary and unfair, and a more human and helpful alternative is badly needed.
b) This is a nice idea and is why the proposal is phenomenally expensive. But taper rates on benefits are swingeing, and a reasonable and relatively affordable step would be to cap the total taper of all benefits and income tax at some number like 65% with an ambition to reduce it further.
If UBI has a positive transformative power at all all, we should see some of that from this sort of modest step in the right direction.
David Raw,
I would expect anyone proposing a UBI/Mininimum Income Guarantee scheme to be aware of Spain’s program. Paul Mason has a good article in the New Statesman https://www.newstatesman.com/politics/economy/2020/07/moment-universal-basic-income-here-s-how-it-could-work
He makes the point that we are heading for 4m unemployed by Christmas and that job creation is no longer easy. The UK workforce is heavily concentrated in low-value, private service occupations. To move several million people from these into a revived green manufacturing industry, which expands solar and wind power capacity, and into new green transport systems is going to take time.
He notes its opponents rely on three main arguments: principle, cost and relative benefit. Many in the Labour and trade union movement are opposed to UBI on principle.
Malcolm Torry has developed a revenue neutral model that will see the lower two income deciles benefit significantly. middle earners largely unafected and relatively modesy tax increases in the top two deciles. In the article. Mason referes to research published in July by the Georgetown University economist Karl Widerquist that calculates to provide £7,706 a year to all adults and £3,853 to all children could cost £67bn a year )about 2/3rd of the current personal allowance cost). All families earning below £32,000 a year would benefit i.e. “most households in the lower 70% of UK income distribution”.
@ Joe B,
“….. job creation is no longer easy”
Local councils and other public bodies, such as the NHS, schools, river and canal trusts etc all have projects which are stalled because of lack of available human resources. If Govt can pay 80% of everyone’s wages and salaries for doing nothing they can pay wages and salaries for only those who need to earn something. What’s difficult about that?
Ultimately, if we ever do run short of things to do, then it makes sense to share out what work is available more equitably. So rather than having n% of the workforce unemployed or underemployed and (100-n)% of the workforce working the same hours as they’ve always done then we reduce working hours for all.
“To move several million people from these into a revived green manufacturing industry, which expands solar and wind power capacity, and into new green transport systems is going to take time.”
Jobs don’t all have to be about “green” energy. If someone is working close to home, or even at home there is a green element in that. Less crowded roads and less crowded trains. Travelling to work in a crowded commuter train can hardly be something we’d do from choice. Sure it might take some time but the sooner we start the sooner we’ll see results.
“Many in the Labour and trade union movement are opposed to UBI on principle.”
Well yes. It isn’t some on some highfalutin ideological ground. The labour movement has never demanded the abolition of the wage system. There has always been a recognition that workers should be workers. Yes there should be fairly paid jobs available for everyone who wishes to work but there has never been a demand that workers, if that is still the correct term to use, should be paid for doing nothing.
Did the Party’s interest in universal basic income lead to the adoption of universal credit in the Coalition?
In fact, isn’t universal credit a version of universal basic income? I think we need to analyse more closely how universal credit has been adopted and implemented. Why are we not discussing how universal credit needs to be changed? Is it because we are happy to discuss principles but shy of the details?
I posted this before, but here are some example numbers for discussion, with the proviso that I am not an economist or accountant! My version of UBI recovers a lot from the better off who don’t need it via the tax system, while also simplifying it and reducing admin (but never makes anyone worse off).
UBI scheme pays an unconditional £7k a year to working age adults. Pensioners still get state pension as now, but not UBI. In parallel, the basic rate allowance is eliminated and the top rate threshold reduced to £44k per year. Basic tax rate increased to 30%, upper stays at 40%. All paid work has income tax of at least 30% deducted at source. UBI entirely replaces tax credits and jobseekers allowance, which no longer need to be administered. Disability and housing benefit don’t change and are still assessed and means tested. I haven’t included NI because it’s too complicated.
£7k per year to 40m working age adults costs £280bn.
Savings from tax credits and jobseekers saves £30bn
Half the admin cost of the DWP is abolished, saving £3bn
28m tax payers earning over £12.5k pay an extra £3.75k tax per year from zero threshold – recovering £105bn tax income.
Estimated extra tax take from those earning under £12.5k – £5bn
Extra tax income from reduction in upper rate threshold – £7bn
Extra tax income from changing basic rate from 20% to 30% on middle earners – £66bn
Net cost to Exchequer of UBI is £64bn.
However no one is worse off and low paid are always better off, and that £64bn will get spent into the economy. Contrary to what some people think, I believe UBI will encourage people to work – anyone taking any work, no matter how casual, temporary or part-time always keeps 70% of what they earn with no form filling or benefit clawback. Having all earnings always taxed at 30% at source will reduce deliberate or accidental income tax fraud. So the true net impact is likely to be less than £64bn, but still needing a significant sum to be found from somewhere.
Obviously tax rates and thresholds can be adjusted for a different outcome.
We British never seem to want to look abroad. We should look at that and variations of it. Finland, Uganda, etc
As for paying for it raising income tax seems to be a NoNo. For 20 years after the War America had 90% at top incomes 80% for the next ten years. We had 98%, had huge debt to US and created a welfare state and much else that transformed life.
I think Mrs Thatcher brought it down to 60%. Politically obviously difficult, but a Dutch friend said we have high tax (50% I think) but we get so much for it.
@ Martin No. They’ve every reason to be embarrassed by what they voted for. That was the top bail….. UBI will be the middle stump.
Time they got some competent advice from the Joseph Rowntree Trust and the Trussell Trust.
@ Katerina,
Yes a good point about looking at other countries’ experiences. As far as I know there hasn’t been a UBI introduced anywhere. And you can’t have a meaningful trial (which by definition is not universal) of a universal benefit.
The experience of Finland has shown that “giving people a universal income did not help them get into jobs, but they did feel somewhat happier than those in the control group.”
Surprise surprise! Who wouldn’t feel happier at being given a few thousand extra per year? You only have to see the reaction of prize winners on TV programs to know that. But how would they feel if their tax bill went up too? Does the trial simulate that? How would they feel if the lady who normally opens up the kiosk to sell them their morning paper and coffee decided that the paying extra tax wasn’t worth it and she just decided to make do with her UBI? Or their bus didn’t turn up because there was no driver?
We do need to get away from this idea that Britain should lead the world on everything. If and when someone else gets a genuine UBI up and running we can look at how well it all works and decide if we should do the same.
https://www.independent.co.uk/voices/finland-universal-basic-income-trial-unemployment-usa-uk-a8782856.html
Vince Cable’s book Beyond Brexit says Universal Basic Income has as many difficulties as Universal Credit. He suggests fixing Universal Credit and ireversing the cuts made by the Tories would be better. see pages 55 & 56
UBI debate is surely worth the time and effort.
UBI has a problem which has been identified above and that is the word Universal. Giving money to millionaires makes no sense, economic , fairness or any other kind. If the UBI was to be tapered away as an individuals income or capital increases it may be achievable. It should take over from many forms of ‘Benefits’.
The only way the Universal bit could truly make any sense though is for all land to be transferred to common ownership with the occupier paying ground rent. A policy I know finds favour with many Lib Dems but would give the orange bookers some problems.
Cooperatives could become a preferential form of business ownership with Government support in place and if the universal basic income was to mean anything then it would need substantial ,if not revolutionary ,changes in many more ways too.
Paul, you will have been disappointed by the tone of many of the responses to your admirable piece for us — even, I fear, if you’ve been following the LDV occasional attempts to debate UBI. Too many have expressed an ignorant opposition to UBI on clearly emotional and unstable grounds. And too many can’t see the wood for the trees — most of which are easily felled.
Martin, at 08.45 on9/8, for example, misses the main point of UBI, which is what it would do to people: all people in the UK, that is, and especially those on Universal Credit, which is widely deplored because of the humiliating treatment it deliberately inflicts on those unfortunate enough to need it. IC is harsh and mean; UBI is open-hearted, and since everyone will get it, none will be demeaned. If you haven’t read it yet, do read the concluding chapter of the Report by Prof Guy Standing for the Shadow Chancellor in May last year. Then read the rest. And if everyone gets UBI [how to pay it follows below] there is no expense of elaborate admin trying to get public servants to say No to the needy if they possibly can. If all get it, there’s no questions to answer nor hoops to struggle through. It can be paid for by restructuring the Income Tax rates. For in the end UBI will only seem impossibly costly to those who are pretty rich and excessively greedy. [Continues below, I trust.]
No Magic Money Tree will be needed. The essence of the thing is straightforward: those whose incomes are very large (they will of course be getting the UBI themselves: that is the U) will pay enough to finance the needy. So choosing the level of UBI will not be a financial or an economic puzzle: it will be a political one. If you have not yet heard of the Modern Monetary Theory, look it up. It looks to me very much like Ordinary monetary theory in the time of Keynes. (Until quite recently, I got an income of £14 pa from HMG, because I held 3.5% War Bonds. That was interest paid by HMG on £400 it had borrowed, to finance fighting the Great War — with no obligation ever to repay it. It had indeed refused to repay it to me, when I suggested it. Fair enough — those were the terms.
Then, a couple of years ago, unprompted, it sent my £400 and terminated the annual payments, having realised the going rates of interest were so low that they could borrow £400 from someone else at a rate much lower than 3.5%)
So I believe a sensible UBI — enough to relieve the destitute, or more — can be financed by taking more tax from those with relatively very high incomes. The point of high incomes, once you’re comfortable, is principally to lord it over your near rivals, isn’t it? UBI will leave all the Joneses still the envy of the same neighbours — a little poorer, no doubt, but still more smug than grumpy. The imbalance we all deplore will have been shrunk, and the needy will be dry and fed. So once we have PR, then we shall get UBI. Whyever not?
Giving money away? What’s not to like? Not if it’s MY money, mate! Just what IS a ‘sensible UBI’ in any case? Another opportunity to double the number of contributions to this article?
If you really do want to spend your time arguing about what they used to call ‘funny money’ in the Social Credit days in pre war Canada and ignore the really serious issues, is it any wonder that the party is currently polling around 8%.
@ Roger Lake,
“If you have not yet heard of the Modern Monetary Theory, look it up.”
I think I might have come across the term from time to time. MMT doesn’t actually say you can do what you like without consequences! It’s essentially a Post Keynesian development as you’ve already noticed.
The term was originally coined by Prof Bill Mitchell. The consensus of opinion in the MMT grouping is against a UBI. Bill puts it:
“It is not a progressive position but continues the unemployment regime that suits capital – they get wage suppression from the slack and maintain sales via the UBI.”
http://bilbo.economicoutlook.net/blog/?p=44133
The question “How much will it cost” may make no sense when you are just moving money around but it will always be asked and when you try to explain 280 bn people just stop listening however well you think it out.
We should start out with one simple step: extend the value of the personal tax and NI allowances (about £3,200 a year) to all those who are not using all of it. That’s about 12 m people. By adjusting the base amounts and withdrawal rates of all working age benefits, you get the cost down well under 20 bn with everybody on a low income either unchanged or better off.
That’s still a lot of money but it it’s obviously possible. Once you have taken that first step, you have a simple mechanism to take it further. Any tax rise, however regressive it may seem, can obviously be turned into something progressive if the money raised is re-distributed through UBI. The removal of the tax thresholds also means that many forms of income can then be taxed at standard rate with higher rates being collected at year end.
Has everybody read “Fully Automated Luxury Communism”? I thought Aaron Bastani was rather too smug for comfort when I saw some snatches of him talking on he web, but I found that I liked the book a good deal more than I was expecting to. Technophiliac, yes, but that’s not necessarily a bad thing.
As a contribution to debate, without necessarily endorsing it, I attach a search indicator to the Scottish Green Party’s paper on UBI.
Scotland can lead the world with Universal Basic Income pilot …greens.scot › news › scotland-can-lead-the-world-with-…
11 Jun 2020 – Scotland would grab the world’s attention by undertaking a three-year pilot of a Universal Basic Income,
John Marriott,
Canada conducted a UBI trial in the 1970s called Mincome as described in this article https://www.bbc.com/worklife/article/20200624-canadas-forgotten-universal-basic-income-experiment
“… for basic income to work on a larger scale, governments would need to find an eligibility income threshold that is reasonable enough to cover necessities, while not allowing people to live “the good life”. He predicts that such a threshold is likely to lie in the region of CAD$15,000 ($11,000, £8,800) – very similar to the equivalent sum which families in Dauphin received during Mincome.”
“When Covid-19 came along and people started to lose jobs in Canada, we discovered that the suite of social programmes in place was really not up to the task,” she says. “You have this mismatch of inconsistent programmes, and you’ve got people falling through the gaps so they’re not getting the support they need. That’s only going to continue as many of the firms suffering now because of the pandemic are probably finished. With so much employment, I think basic income needs to be considered as it provides a much more coherent solution.”
“For the residents of Dauphin who lived through the Mincome project during the 1970s, there are no doubts of its merits. “I’m a huge advocate of basic income to this day,” says Taylor. “Knowing that extra money was coming in made life that bit easier. You no longer needed to be afraid of paying the bills or what you were spending on food. It gave you that piece of mind.”
Vince Cable isn’t too keen on the idea of a UBI. He says:
“My scepticism was fuelled by seeing it advocated with equal fervour both by the collectivist left, who saw it as a tool for reducing inequality, and by the libertarian right who saw it as a way of dissolving government once subsistence level income was guaranteed”
He’s not quite right about the first part of this sentence. The labour movement has always been about the elimination of worker exploitation and a demand for fair wages. There has never been demand that those who are capable of work should be paid for doing nothing.
He also fails to mention that many disabled people would wish for a more inclusive role, giving as well as receiving, in our society. Paying them a UBI, and telling them to go away and stop bothering the rest of us is just another way of denying them that. But the article is still worth a read:
https://www.independent.co.uk/voices/coronavirus-universal-basic-income-economic-crisis-recession-unemployment-a9437116.html
Paul Hindley state he welcomes “the motion’s commitment to guaranteeing continued additional income support mechanisms for people in receipt of housing and disability support payments” I would have like a commitment that the party would introduce a UBI on top of all existing working-age benefits. If we don’t then the poorest in society will not benefit from a UBI.
We must not become the party of the UBI, the Green Party is that party. It would be better if we became the party of the new Social Contract to deal with the social ills of today including the eradication of poverty within ten years with a plan for how we would do it.
Richard Easter,
We have policies to make Universal Credit much better – reducing the conditions for it, including the abolishing the sanctions regime and paying it within 5 days of claiming it.
Geoffrey Payne,
I hope you will be proposing a reference back on this motion. However, no UBI will provide enough money to pay a mortgage or a person’s rent and when introduced a UBI is likely to be lower than the current out of work benefit. Most UBI schemes keep housing benefit. Currently people with mortgages get a loan from the government to pay all or most of their mortgage interest, not as in the past when this money was a benefit.
David Raw,
According to the Scottish Greens (https://greens.scot/news/scotland-can-lead-the-world-with-universal-basic-income-pilot) “the results of a feasibility study in Scottish council areas has been published, with a recommendation that Scotland commits to a three-year pilot of the idea, which would provide a reliable, unconditional source of income for everyone. This would be co-delivered by the Scottish and UK Governments alongside local authorities.” (I couldn’t find a link to the study or any reference to a Scottish Green Party report.) Here is another article on it – https://scottishfinancialnews.com/article/scottish-basic-income-trial-could-see-scots-handed-11k-per-year.
Joseph Bourke,
The “A Fairer Share for All” policy work group rejected a UBI, see page 10, “When the Party last considered this issue, we argued that a UBI – i.e. a flat rate sum that is paid to everyone in the country – would not achieve the aims of providing sufficient support for everyone. We remain in broad agreement with this conclusion: the level of support for the poorest is what matters most, rather than the way in which this is means-tested; and the levels of tax rises required to give generous cash benefits to working-age adults on high as well as low incomes is unrealistic” (2.3.1). {The previous policy paper was entitled, “Mending the Safety Net” (Autumn 2016).} They went on state, “However, there is a case for a guaranteed minimum income pilot scheme. … we would introduce a pilot scheme that involve an unconditional payment of the standard Universal Credit allowance (currently £319 per month for a single adult over 24)” (2.3.2) {£319 per month is £73.62 per week}.
Therefore a guaranteed minimum income is not the same as a UBI and I wish you and others would stop saying and implying that they are. We have had discussions in the past where you were clear of the differences with you supporting a guaranteed minimum income while rejecting a UBI.
The Nature article on the Spanish scheme you provide the link for states, “Even before COVID-19 struck, the country’s left-leaning coalition government had proposed the scheme — a variant of UBI called guaranteed minimum income — but the resulting economic emergency brought forward the timeline. The system will allocate a fixed monthly sum to each eligible household, no strings attached.” Please note ‘eligible household’ not ‘every citizen’.
Dr Peter Sloman & Jane Dodds join John Potter to discuss the upcoming conference motion on Universal Basic Income.
https://www.facebook.com/watch/?v=993079577797182&extid=BnPAoJ2tXCdC7Rjo