The compelling case for a national Universal Basic Income trial

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Coronavirus has lifted the lid on the prevalence of financial insecurity in this UK. For many, there is no safety net in place for times of crisis. So, now more than ever, we need progressive, forward-thinking solutions to help people cope.

That’s why I, along with a group of cross-party MPs, have been calling on the Chancellor to implement an Emergency Universal Basic Income. Before the crisis, I advocated for the launch of local pilots to explore the idea. Now, I realise that we to act nationally to protect our most economically vulnerable.

Low-paid workers, such as those in the gig economy, often rely solely on their monthly wage. Many freelancers, as well as those with part-time jobs or on zero-hours contracts, live hand to mouth, without back-up provisions should they suddenly not be able to work.

Implementing a regular, unconditional income to everyone in the UK is a hand up to the most hard-working and economically vulnerable in society. It is a message to all our citizens that says loud and clear: we appreciate your hard work we will help you and your family in this time of crisis.

A set income, that would act as a safeguard for many is the most efficient and compassionate way for this Government to put millions of minds at rest instantly.

Anxiety around where your next meal is coming from should be the least of people’s worries. When we as a nation are undergoing such a crisis, no-one should have to face a choice between isolating to protect their health and putting food on the table for their children.

The Government have tried to build a patchwork of support provisions for people in various different situations. But under their approach, some will have to wait for universal credit applications, others must wait until June for a different payment. Too many people will fall through the net and get no support at all.

A Universal Basic Income is surely a better, catch-all safety net – and it’s not too late to introduce it. The Spanish Government has just become the first country in Europe to announce a rollout of a Universal Basic Income. As the Coronavirus crisis deepens here, and looks as though it will go on into the year, it is becoming clear that we should trial the same.

I will continue to urge the Government to leave ideology at the door and take this radical, progressive action. To not is to risk the livelihoods and safety of vulnerable people who are desperately looking to our welfare system to shelter them from hardship.

* Layla Moran is the Liberal Democrat MP for Oxford West and Abingdon

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41 Comments

  • Simon McGrath 14th Apr '20 - 8:41am

    Layla makes a very good case for ensuring we provide relief to those who arent earning at the moment -but none at all for saying why the majority whose income is unaffected should also be getting money from the state

  • Peter Martin 14th Apr '20 - 9:22am

    The answer to Simon’s question above has to be that the U in UBI stands for Universal. This means it is handed out to everyone whether or not they need it. This the big problem and why it will probably never receive enough support.

    I’m not sure why Lib Dems are so keen on the idea. Why not give everyone a job, or at least several hours work, who needs one? For now, that job could be just staying at home or, maybe just helping out elderly neighbours with their shopping. Maybe helping out at the local hospital. But the job only is available to those who don’t have another source of income. Later, as the economy recovers, and more workers return to their previous jobs, the numbers of people requiring jobs will decrease.

    The ones who remain can be given more meaningful work for the public purpose.

  • Paul Michael Sibert 14th Apr '20 - 11:34am

    Automation and AI will mean that eventually UBi will be needed. The present economic model is that the rich invest money to produce goods and services. They employ people to do this and the income from employment purchases the goods and services. A virtuous circle.

    But increasingly the rich invest in automation and AI. That will produce the goods and services and the income will go straight to the providers of capital, not to the providers of labour. Wealth even more concentrated in the hands of the few.

    Unless we find a way to tax that wealth and redistribute it, there will be no money to purchase the goods and services. The whole structure of the economic model needs to change.

    UBI is the logical answer to that. If we need less labour, because the work is done by capital, then giving everyone the right to live at a basic level and then the opportunity to enhance that income and lifestyle by earning, makes sense.

    It seems an an anathema to many to give people something for free, but we need a paradigm shift in thinking to transition to the technological future.

  • Laurence Cox 14th Apr '20 - 12:13pm

    UBI for one part of the population, pensioners, has been Party policy since 2004 when we passed the Citizen’s Pension motion at Conference. The simple response to those claiming that it will go to those who don’t need it, is that it can be recovered through the tax system; indeed a UBI can be part of a more progressive system of taxation by removal of personal allowances for income tax and tax thresholds for NI.

  • James Belchamber 14th Apr '20 - 12:18pm

    A basic income must be universal because there has never been a means-testing system that has not let some people in need fall through the cracks, either temporarily or permanently (and often through deliberate decisions based on conservative morality).

    Since a UBI would have to be paid for with taxes it will essentially pay most people some of their tax back – until they’re in the sudden and unfortunate situation where they are no longer paying taxes, where they will still receive their UBI.

    No call centres, no masses of bureaucracy – just a simple to administer payment. A very Liberal solution.

  • Phil Beesley 14th Apr '20 - 12:46pm

    I think that UBI will be an important post-Covid-19 solution for unemployment and under-employment.

    At the moment, I think it is more important to feed people, to prevent utilities from being cut off owing to unpaid bills, for people to have a roof over their heads.

    It is too late to invent a UBI system for today.

  • Adam Bernard 14th Apr '20 - 1:28pm

    Thanks, Layla! The case for this is growing by the year even without the current crisis, and it’s heartening to see our parliamentarians ensuring that the party is ahead of the game in promoting this.

  • Excellent news. A UBI is a very liberal idea. It seeks to spread wealth, and with it power, widely. It would transform the relationship between the individual and the state – currently when a citizen loses their job etc they must go to the state and appeal for help which the paternal state may, or may not, grant. A UBI does away with such paternalism – the citizen has a right to a UBI.

  • Phil Wainewright 14th Apr '20 - 1:48pm

    I’m very pleased to see one of our MPs and leadership contenders backing the concept of UBI as a universal entitlement. UBI is a powerful weapon against poverty, ignorance and conformity, giving freedom and choice to those with least heft in society (and as Laurence Cox points out, there are ways of ensuring the better-off pay it back in taxes).

    As Liberals we should see UBI not as a hand-out but as society’s recognition of the individual’s role as part of the communities they belong to – without prejudging the value of the contribution each individual makes, whether as a parent, carer, volunteer, artist, learner, friend or neighbour.

  • I can see the appeal of a UBI, but I’m not completely sold on it. However, trying to use the current crisis as the justification is not a good idea. A UBI would never be high enough to provide safety for all in this sort of crisis, some similar measure of the governments furlough system would be required. Also there are going to be effects that need to be considered and alleviated and will be part of a wider approach.

    Jumping on a current crisis is not a good basis for that discussion.

  • I cannot see how the current situation provides a reason to implement a UBI. Yes, many people are struggling as a result of this crisis.

    But, many are not- Jacob Rees-Mogg’s investment firm and Tesco shareholders will be doing very well I’d imagine.

    There is not a bottomless pit of money- and I don’t think it is right that our younger generations should be saddled with even more debt to fund handouts to wealthy older people who do not need them.

    By all means provide support to those who require it- I’d certainly look at increasing universal credit. But I just do not see how giving money to those who don’t need it is justifiable or affordable.

  • Peter Martin 14th Apr '20 - 3:17pm

    @ Laurence Cox,

    “The simple response to those claiming that it will go to those who don’t need it, is that it can be recovered through the tax system” ??

    At least 50% of people pay no income tax at all. Many of them do not live in poor households but they would still qualify for the UBI. Many make a good living in the £150 billion black economy. We all know just which professions will only take cash!

    So you pay them a UBI and, yes, you can recover it from the tax system, but it won’t be them that you’ll be recovering it from. If people don’t need the money it’s far simpler to just not pay it to them in the first place.

  • marcstevens 14th Apr '20 - 3:49pm

    This is a social liberal policy and well done to the Party’s likely future Leader, Layla, for promoting it. It will become policy at some point in the future, but I can just see another Party claiming it as their idea. I particularly like the support for low paid workers; people in part-time jobs particularly zero hour contracts, like myself, who fall outside of the existing safety nets.

  • It depends how the U.B.I. is structured. It can provide a basic income for most people, with supplementary amounts for those most in need. In response to John Smith: Increasing Universal Credit would be a start and the basis could be provided for the new system by using the existing Universal Credit system and adapting it.

  • @Peter Martin 9,22 am. “Why not give everyone a job ?” Does this mean I can choose a job that suits my interests, experience or talents or will it just be any job that some local apparatchik decides I should do ? This doesn’t sound very liberal. And if there are no suitable jobs in my area ?
    The real issue is this. Labour markets of the future are likely to create even greater income inequality. Those with highly marketable skills, perhaps in new technologies, will be very, very highly rewarded but the vast majority will be in low skilled or service sector jobs paying not much more than the minimum wage. The UBI, paid to all but recouped from the higher paid through the tax system will narrow this gap. Gauranteeing a job paid at the UBI rate will do nothing to solve this problem.

  • Layla Moran,

    I favour a UBI, however the costs are huge, but the devil is in the detail. How much a week or month are you advocating for your new temporary UBI? (On 20th March Ed Davey proposed increasing benefits for a single person to £150 a week.) Is your proposed UBI paid on top of all existing working-age benefits? Have you thought about how it would be possible that those who currently have no earnings because their household income is too high for means-tested benefits because of the high earnings of other household members do not benefit by the full amount of any UBI?

    James Belchamber,

    A UBI is a very Liberal solution but I suggest only if it is set at the poverty level or is on top of the existing benefits.

    Joe Bourke,

    I note you have changed your position from advocating your minimum income guarantee to advocating a UBI!

  • James Belchamber 14th Apr '20 - 8:19pm

    UBI should aim to become 60% of median income. It’s a guarantee against poverty.

  • Michael BG,

    “Universal is an important point. We know how to start it and how to pay for it so that it is equitable and benefits those that need it most.”

    By Universal, I mean every adult is entitled to a minimum guaranteed annual income of £5,200 paid either by way of a basic allowance through Universal credit or as a tax and national insurance reducer.

    Every single benefit claimant or taxpayer is entitled to the same amount of benefit and it precludes objections such as the costs are huge or handouts to wealthy people who do not need them.

    It is paid for by a reduction in the value of personal tax allowances for higher rate tax payers from 40% to 20%; limiting tax relief on pension payments to basic rate; unfreezing the fuel price escalator; and removing the starting NI threshold for employers national insurance for larger employers.

  • We already have a “partial” Basic Income because of the extent of “furloughing”. That Scheme covers Millions of people”!

    So we can surely provide for the Universal Basic Income!

  • Michael Sammon 14th Apr '20 - 11:25pm

    Taxes and borrowing are already all going up to pay for Covid19 economic consequences. I don’t see how when the public purse is stretched to a tune as predicted by the OBR, of a 35% contraction of the economy, that is the time to give public money to people who don’t need it. It’s only compelling when you don’t look at what better could be done with the money, such as investing in infrastructure, public services or giving more support to those in need.

  • Paul Reynolds 15th Apr '20 - 9:13am

    Having a post-COVID-19 policy of paying people unconditionally to do nothing, for nothing in return, regardless of income and wealth, is not going to end well for us politically, regardless of the merits of the radical idea. As for the idea that UBI is inevitable due to the use of self-learning gadgets (AI) I would recommend viewing science fiction movies of the 50s,, 60s, 70s and 80s to see how accurate predictions of the future have been.

  • Peter Martin 15th Apr '20 - 9:37am

    @ Chris Cory,

    “Why not give everyone a job ?” Does this mean I can choose a job that suits my interests, experience or talents or will it just be any job that some local apparatchik decides I should do ?

    Yes, you should be able to choose your own job just as you can now. We aren’t talking about everyone being allocated jobs by the local party commissar! But for those small percentage of people who are unemployed, and difficult to employ, we should guarantee some form of work which is within their capability. For younger people especially, but not exclusively, education and training will be a major part of the work. Everyone will be encouraged to move out of JG jobs as soon as they find jobs in the normal economy.

    The JG will help prevent today’s ‘difficult to employ’ becoming tomorrows ‘impossible to employ’.

    This would be particularly useful for many intellectually and physical disabled people who are nearly always overlooked when they are in competition for jobs with able bodied people.

  • James Belchamber 15th Apr '20 - 9:43am

    It’s not so much “paying people to do nothing” as “ensuring people’s right to not live in poverty”.

    Really what we’re proposing isn’t so exciting – it’s approximately applying the state pension (currently £134.25) to everyone. We can raise this through taxes and make it reliable through pension-style “UBI funds”, with the nice side-effect of creating additional investments.

    A lot of this will simply mean taxing people more – most people will earn a little bit less now, but will have a surefire guarantee that they will never, ever be in poverty (and nor will their children, their parents, their butcher, their baker.. the guy that sleeps on the street).

    With this baseline, people can stop thinking about how to “survive” and instead turn themselves towards how they want to thrive. For some this will mean giving foundations to their entrepreneurial spirit – for some, this will mean minimising outgoings so they can sit inside and play computer games. For most, this will just mean carrying on as normal – but with a watertight guarantee that they will never land up in poverty.

    The wins will range from obliterating poverty-driven crime to creating a generation of new, British companies with employees that have a healthier relationship with their employers, instead of simply being forced to work out of fear of poverty.

    Win-win-win-win-win-win-win-win.. -win.

  • Peter Martin 15th Apr '20 - 10:02am

    @ Rob Heale,

    “…….So we can surely provide for the Universal Basic Income!”

    You should’t extrapolate from the temporary to the permanent. I haven’t seen anyone come up with a UBI that is at all workable. Either the UBI is either trivially small and won’t make any significant difference to levels of poverty or it is substantially large and unaffordable.

    And not necessarily affordable in terms of money. Hardly anyone takes into account the effect of a large UBI on the motivation of a highly taxed workforce. Why would anyone bother getting up a 5am to drive a train or a bus or open a shop if they had to accept a substantial wage cut to pay for their unconditional basic income?

  • Paul Reynolds 15th Apr '20 - 10:16am

    The party will waste time and energy on this subject. It is one of many ideas looking for a problem. Solving problems means defining problems with great care and looking at many options and evidence. Promoting a ‘magic solution’ and then creating its many supposed merits is poor policymaking. There have been many trials of UBI in different parts of the world, and the evidential outcome is not overall positive, although enthusiasts wedded to the idea try to find merit from them. It is time to put the idea to bed and focus more professionally on the problems that UBI is meant to address.

  • Well put Layla. I also agree with the points made by Paul Michael Sibert. The current economic model is changing with reduced levels of employment security, more automation, and the increasingly invasive applications of AI. The current global market system will not be fit for purpose as more highly paid career positions are replaced by AI, and automation does away with other more skills based jobs.
    UBI does not need to be that expensive, as tax rates can be adjusted and some other benefits are replaced by UBI. As a society we need new and radical approaches to these problems, and UBI is one such approach.

  • James Belchamber 15th Apr '20 - 10:51am

    >There have been many trials of UBI in different parts of the world, and the evidential outcome is not overall positive

    This is just not true @Paul – there have been many trials and they HAVE had overall positive outcomes (although there’s way too little evidence to draw firm conclusions).

    What research are you citing here?

  • Paul Reynolds 15th Apr '20 - 4:50pm

    James Belchamber asked about references.

    The Fiscal and Distributional Implications
    of Alternative Universal Basic Income Schemes in the UK
    Dr Luke Martinelli
    IPR Research Associate, University of Bath
    Institute for Policy Research
    March 2017

    UNIVERSAL BASIC INCOME
    Public Services lnternational, Friedrich Ebert Stiftung. April 2019
    http://www.world-psi.org/sites/default/files/documents/research/en_ubi_full_report_2019.pdf

    A list of trials that can be tracked and followed up…
    https://basicincome.org/news/2017/10/overview-of-current-basic-income-related-experiments-october-2017/

    A list of schemes and a good overview from a broadly pro-UBI organisation..
    https://www.givedirectly.org/basic-income/

    Universal Basic Income Has Been Tried Before. It Didn’t Work and the results weren’t pretty. Oct 2018
    https://fee.org/articles/universal-basic-income-has-been-tried-before-it-didn-t-work/

    ‘Universal Basic Income is a failure, new report says’
    https://www.stuff.co.nz/business/world/112558711/universal-basic-income-is-a-failure-new-report-says

    The Kenyan trials were all paid for by external aid donors and esentialy were a few dollars per month.
    ‘Money for nothing: the truth about universal basic income’
    https://www.nature.com/articles/d41586-018-05259-x
    See also https://www.worldpoliticsreview.com/insights/23750/the-promise-of-kenya-s-ubi-trial

    A new study on universal basic income says it doesn’t achieve its main purpose and is economically illiterate. May 2017
    https://www.businessinsider.com/universal-basic-income-new-study-says-it-doesnt-achieve-main-purpose-2019-5?op=1

    The, perhaps over-researched, Finnish trial…

    ‘Finland to end basic income trial after two years’ Guardian. 23rd April 2018
    https://www.theguardian.com/world/2018/apr/23/finland-to-end-basic-income-trial-after-two-years

    ‘Finland’s basic income trial exposes timeless welfare reform dilemma’ 1st May 2018
    https://www.abc.net.au/news/2018-05-01/finland-universal-basic-income-welfare-reform/9709798

    ‘Finland basic income trial left people ‘happier but jobless’ 8 February 2019
    https://www.bbc.com/news/world-europe-47169549

  • Paul Reynolds 15th Apr '20 - 5:43pm

    Websites which are pro-UBI on ideological grounds, but which take a ‘pros and cons’ approach, tend to feature a bullet point way down the list like ‘..the problem of affordability remains UBI’s most pertinent criticism’* or ‘Financing is one challenge’ **
    * https://sevenpillarsinstitute.org/universal-basic-income-more-empirical-studies/
    ** https://www.worldpoliticsreview.com/insights/23750/the-promise-of-kenya-s-ubi-trial
    To make the key point… I might propose a free, unconditional salary of £20,000 per month for every resident in the UK regardless of age or nationality. It would have lots of positive effects which I can list, including health benefits, reduced poverty, and so on. However, if implemented the long term ‘moral hazard’ and other dynamic effects such as the entire population being beholden to the state, would take years to wash through. Should skeptics just wait for years while the UBI advocates calculated its net benefits ? Moreover, in assessing the £20,000 per month idea, the problem of ‘affordability’ is not just one minor negative bullet point amongst long lists of pros and cons. It is the crux of any such proposal, especially since it is a transfer of income from one group to another. Let us not forget the version of UBI implemented in the Soviet Union (guaranteed equal income). This is not a ‘political point score’. It is the only example of UBI that was attempted over decades. There were certain illiberal implications …

    Finally, there is only one very long term scheme which has been formally studied and that is in Alaska. However, the Alaskan scheme is just distribution of oil revenues, which are very high per capita and not a viable option for nearly all other countries on the planet.

  • James Belchamber,

    UBI should aim to become 60% of median income. It’s a guarantee against poverty.
    Indeed, but all UBI schemes I have seen never set the rate to 60% of median income or set out a path to get there.

    Joe Bourke,

    Your minimum income guarantee you have stated is not universal, because you have stated that those people who are not entitled to benefits and who don’t have an income would not be entitled to it.

    Rob Heale,

    It would cost more money to provide a Universal Basic Income on top of the 80% of existing wages commitment, even if set at half the Universal Credit couple rate which was due to come into force in April (117.09 /2 =) £58.55 a week. If a UBI was set at £138.10 per week (half of the poverty line for couples) for those of working age it would cost £309.5 billion. (I haven’t seen any estimates for paying the 80% of wages and profits for the self-employed, but I expect it to be about £103 billion per quarter.)

  • Joe Bourke,

    I think your last comment clearly shows that you don’t support a Universal Basic Income. I hope you can make this clear in your future posts on this subject. We both recognise that a UBI would benefit those people who currently have no earnings and receive no benefits because their household income is too high for means-tested benefits because of the high earnings of other household members. You want to deal with this by excluding them from your Minimum Income Guarantee; I want to consider how we could increase the tax paid by the household to cover the amount of UBI this person receives.

    Another difference is that I want those currently on benefits to receive benefit at the poverty level. I feel therefore that a UBI has to be on top of the existing benefit system, unless the benefit levels are at the poverty line. If the UBI was £100 a week then I would want the standard rate of benefit for a single person to be £60.30 a week and for a couple £76.20 a week.

  • Peter Davies 16th Apr '20 - 10:55pm

    Most people of working age already receive either tax and NI allowances worth £3645 if or benefits worth a similar amount. People who don’t include those with partners earning, students and the unprofitably self-employed. Introducing a UBI at that level would not be massively expensive. Benefits needs would be calculated as now but reduced by amount of the UBI. The number of people getting means tested benefits would be far fewer (If we set it at £3877 we would exclude everyone on JSA but not housing benefit).

    What would be difficult is “trialling”. You can’t trial universality. Any version of UBI involves raising taxes. You can’t do that to a random selection of people.

  • Peter Martin 17th Apr '20 - 3:54pm

    There’s been some discussion of a trial of a UBI. How do I volunteer to take part? I’d be happy to provide some feedback. I’m sure it will be along the lines that I’m going to be happy when the trial starts. The bigger the UBI the happier I’ll be. Then when it stops I’ll be sad!

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