Universal Inheritance: A Big Radical Liberal Idea

Now more than ever the Liberal Democrats need new imaginative radical policies. Big idea politics is back with a vengeance as both Labour and the Conservatives indulge in increasingly extreme visions for the country.

If we as a party are to successfully challenge both Labour’s socialism and Tory Brexit nationalism, then we need to engage in the ‘battle of ideas’ and develop our own clear alternative. Liberalism has a long radical heritage stretching back more than three centuries. Throughout the history of liberal political thought, liberals have consistently championed ways of spreading power, wealth, opportunity and ownership to individuals.

In the 20th century, Liberals campaigned under the slogan of ‘Ownership for All’. This was a radical social liberal vision of a more egalitarian capitalist society; where citizens would have the right to own capital and have democracy in their workplaces. This led to the Liberal Party supporting worker cooperatives, profit-sharing and corporate power-sharing models between bosses and workers. The Oxford University academic, Stuart White, refers to this tradition as alternative liberalism.

One central aspect of the radical liberal ownership agenda is the establishment of a citizens’ wealth fund (also called a sovereign wealth fund). This is a publicly-owned fund made up of national wealth, taxed wealth and national investments in shares, land and natural assets. Such funds work successfully from Norway to Alaska. Vince Cable and Liberal Democrat party members gave their overwhelming backing to a citizens’ wealth fund at this year’s party conference in Brighton. 

But how should the wealth amassed in a citizens’ wealth fund best be used? One answer is to deliver a universal inheritance as outlined in a recent report for the Institute for Public Policy Research (IPPR). Universal inheritance is the idea of having a one-off universal capital grant paid to citizens when they turn 25 years of age. The IPPR envisions that a citizens’ wealth fund could eventually pay out a universal inheritance of £10,000 to every 25-year-old. The basic rationale for the policy is that asset-poor young people should share in the nation’s wealth at the start of their adult lives, when many are starting their careers.

Universal inheritance is not new, its roots stretch back to the writings of the American republican liberal, Thomas Paine in the late 18th century. It also had many supporters in the Liberal Party of the 1970s. At the core of the philosophy of Ownership for All is the belief that everyone has the right to own some capital. This closely links universal inheritance to another much more well-known big radical liberal idea that of the universal basic income. 

Imagine what a 25-year-old could do with an extra £10,000. They could use the money to help put down a deposit for a mortgage on a house. It could help to fund academic qualifications or to fund further career development. It could be invested into starting a new business or used as a loan guarantor. If nothing else a universal inheritance would give people greater financial security. Universal inheritance is first and foremost an investment in the future of every young adult.

We still have a lot of work to do to win back most of the progressive voters that we lost during the Coalition years. Universal inheritance will help us to do this as well as helping us to rebuild trust with younger voters.  

The Liberal Party was the party of big ideas in the 20th century and so the Liberal Democrats must be in the 21st century. Our party desperately needs new radical big ideas to capture people’s imagination. Universal inheritance is just such an idea. It has the potential to greatly improve the prospects, opportunities and individual autonomy of young adults. A citizens’ wealth fund has the ability to effectively and affordably deliver a universal inheritance to all 25-year-olds.

Liberal Democrats should strive for a new progressive capitalist economy, one with a fairer distribution of capital ownership at its heart. We must rediscover our radical social liberal heritage and champion imaginative new policies that advance social justice and reduce wealth inequality. Let’s start by giving young adults a real stake in their futures with a universal inheritance.

* Paul Hindley is a PhD politics student at Lancaster University and a member of the Liberal Democrats in Blackpool.

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  • David Becket 30th Sep '18 - 10:19am

    We are in desperate need of radical ideas like this, as well as our proposals in other areas. However it is no good having ideas and proposals to conference (Which we have) unless we promote them.

    In today’s Observer 49% predict a bad Brexit deal, the majority do not have a good opinion of Corbyn or May and 45% are unimpressed with any of the front contenders to replace May.

    Yet only 9% will vote Lib Dem, the only party offering an alternative to the Brexit mess.
    Our PR is a total disaster. If the the media ignore us we must make more noise.

    At least three Press Releases each week, copied to all local parties and social media are essential. As an active member I can see nothing coming out of our press office.
    Some action from our spokespersons is needed, apart from Tom Brake and Jo Swinson few get any mention, or appear to have any views.

    We also have a leader who is a safe pair of hands but boring, unlikely to inspire anybody outside the party. We tried a leader who looked exciting, but for a number of reasons, many of his own making, he failed.
    A leader outside the House of Commons is one, risky, option. Alternatively are we likely to find a young President with the time, energy and character to move this party forward?

    These are desperate times for our country, and an opportunity for this party. However with its current structure and myriad of committees we appear unable to rise to the challenge. These points have been made many times on LDV, does anybody at the top of the party take any notice?

  • nigel hunter 30th Sep '18 - 11:16am

    This 10 thousand ( or even money now) could be invested in new ways of business. Say a pub has closed. This pub has 2 floors. Enterprising young people with ideas (or others, say community organisations) could pool their resources to open up 2 businesses sharing the same machinery to cut costs a change of use or redundant bank buildings. This could be one way of spreading wealth, power opportunity by cooperation. See what your branch or like minded people think, get them to act. If the party cannot act on innovation the local parties should step in. A sort of ‘devolution’ in a small way.

  • The last Labour government set up the child trust fund which it could be argued was a similar idea. Why wait till age 25.
    I forget now what the initial endowment from the state was or at what age it matured. I do recall the Lib Dem education spokespeople promising to end the trust fund and use the money to fund pupil premium instead.

  • Good article, Paul.

    There is actually a campaign for a universal inhertance http://www.universal-inheritance.org/ run by the rump Liberal Party that describes itself as Real Liberals (not the Libdems) fighting for Liberalism. A small but hardy group that rejected the merger with the SDP and persist with an independent political party.

    You might be able to persuade the last of the holdouts to give it up and rejoin their fellow Liberals in the Libdems.

  • Lorenzo Cherin 30th Sep '18 - 1:39pm

    Paul shares an idea referred to as radical, like the fashion in this party, when , as said above, the party rejected the previous idea from Gordon Brown of a child trust fund, precisely because it does not target people , and the pupil premium does.

    This party was moving away from universal support when now it is moving to it herein.

    I support the notion, of a universal basic income, for important reasons not mentioned by the all too many who support things from an economic rather than justice model. I want the abolition of the Job centres as they are, no liberal or ;Liberal should support people paid to judge people, courts have juries unpaid, ye it is accepted that penpusher types make life altering decisions re peoples lives.

    I think we should begin by targeting those who suffer most with help, those who are unemployed, left out, poor, unable to source finance for worthwhile enterprise ideas, then we can give middle class and wealthy kids a bribe, sorry , an inheritance.

    A bit much from a party that does not much like people passing their hard earned wealth or goods to their loved ones as an inheritance.

  • Katharine Pindar 30th Sep '18 - 4:05pm

    Appealing as the idea of a Citizen’s Wealth Fund sounds, Paul, our party has not yet decided, either how it is to be constituted, or how it might be distributed. Policy Paper 133 on Good Jobs, Better Businesses, etc,, which led to the Motion F28 which we passed at Brighton, only mentions its arising by means of companies using ‘national data’ making some financial compensation which could then be used ‘to support the creation of a sovereign wealth fund to invest wealth on behalf of all its citizens.’ (Section 3.4.14).

    Then there was a paragraph in Motion F34. Promoting a Fairer Distribution of Wealth, which was passed. Lines 73 to 79 read: ‘ Revenues from higher wealth taxation to be allocated to a combination of: lower taxes for young people and low earners; increased investment in infrastructure and education; an independent, professionally managed Citizens’ Wealth Fund, which by investing in assets would earn an annual rate of return that could be used to boost public spending or be returned to citizens in the form of an annual dividend.’

    If these mentions amount to the only extant Lib Dem policy on a Citizen’s Wealth Fund, when we obviously have some way to go to progress our thinking on its formation and distribution. You buy the well-worked-out IPPR proposals, Paul, which explain where the moneys should come from, and suggest the idea of £10,000 for everyone at age 25; but this has not yet been debated and agreed at Conference, as far as I can see.

    What I am wondering is how it would fit with Vince’s idea of Individual Learning Accounts for young people, which would give them each a fixed fund to take training and retraining as they wished during their lifetime. The two ideas do not seem compatible. I don’t recall where the funding for Individual Learning Accounts was to come from, and perhaps the IPPR sources for their particular idea are different. But I do not see how we can support both plans, either in principle or in their need for major national spending commitment.

  • There’s nothing radical about dishing out, £ 10,000 to every 25 year old regardless of their personal circumstances.

    Will Prince George and every old Etonian get it at the same level as a young person getting by on Universal Credit or the minimum wage?

    It will be ridiculed as unbelievable when people remember the history of tuition fees, the destruction of sure start centres, the welfare cuts and the rise in the number of food banks post 2010.

    Sorry, lacking in social justice and credibility with the electorate.

  • Nonconformistradical 30th Sep '18 - 4:45pm

    In support of David Raw..

    From the original article..

    “Imagine what a 25-year-old could do with an extra £10,000. They could use the money to help put down a deposit for a mortgage on a house. It could help to fund academic qualifications or to fund further career development.”

    The first of these suggestions might only help to fuel house price inflation. And the other two might further reinforce the position of those who benefit most from our unequeal society.

    Much better to use a sovereign wealth fund for community purposes

  • Point for discussion : Just how much social engineering can you
    indulge in before you cease to be a liberal ?

  • Katharine Pindar 30th Sep '18 - 11:25pm

    I agree with the priorities which Lorenzo voiced and the related doubts of David Raw. Handing out £10,000 to every 25-year-old doesn’t seem the best use of a Citizens’ Wealth Fund, though it appears we need much more discussion about how it could be used for the benefit of all.

    Closer scrutiny of the F28 Motion on Good Jobs, Better Businesses, Stronger Communities, which has so many good suggestions much more developed than the Citizens’ Wealth Fund mention, has reminded me that a paragraph on Investing in skills, lines 54 to 58, emphasising the need for lifelong opportunities for retraining, recommends ‘a new initiative – Lifelong Learning Entitlements.’ That seems to me perhaps a better potential use of any national wealth fund, which I hope we shall hear more of.

  • Lorenzo Cherin 1st Oct '18 - 12:01am

    Jenny, Katharine, David nonconformistradical


  • um… we take £27k off them to pay for university tuition fees and then give them back £10k!

    Sorry this is an absolutely bonkers idea!

    My first call on £100 billion would be firstly to invest in human infrastructure – education. Firstly in doubling the pupil premium and a real terms increase in school budgets. Secondly in a £27k fund for all for post-18 education.

    Give someone a fish you feed them for a day, give someone a fishing rod you feed them for some years, give someone an education and you feed them when the fish run out (and they get bored of eating fish!).

  • Peter Martin 1st Oct '18 - 8:38am

    Ideas like UBI and handing out £25k to youngsters are just pipe dreams. They are never going to gain enough general acceptance in the wider community. And rightly so IMO. They are simply schemes for handing out money for doing nothing!

    And do we make any distinction between UK born nationals and those who have just recently arrived? I would expect that if we do have free movement as an EU member when ( if ? ) this is implemented that it might well attract the attention of quite a few 24 year old EU nationals. Can we discriminate under EU rules?

    Look, it’s just a non-starter politically. Please just get back to providing jobs for those who need them and affordable education and available apprenticeship schemes for all young people.

  • David Raw 30th Sep ’18 – 4:26pm….Nonconformistradical 30th Sep ’18 – 4:45pm….

    I agree, wholeheartedly! Just like the ‘Right to buy’ Tory fiasco an extra £10,000 will help the well off far more than those who really need a home.

    As for the…..”Liberal Democrats need new imaginative radical policies. Big idea politics is back with a vengeance as both Labour and the Conservatives indulge in increasingly extreme visions for the country……

    It seems other parties have ‘extreme’ visions whilst ours are ‘radical’…I always believed that the only ‘real’ difference, between the two, was whether the ‘radical’ view, in question, was your’s or your opponent’s.

  • Innocent Bystander 1st Oct '18 - 9:20am

    I agree with many that such a proposition will convince the electorate that the LibDems have finally lost the plot (or those who weren’t already of that mind).
    ‘Radical’ appears to be a euphemism for ‘Santa Claus’ and, though the party has exotic spresms when an extra 1% is divined in the polls, these ideas seem a long way from triggering a Macronesque avalanche.
    My own view is that the key to igniting the public’s attention would be a new economic vision. I read the paper 133 and it is a charter to divert business from successfully competing in world markets and oblige them to focus on social engineering here, in Britain. Its massive increase in employee rights and employer obligations will only serve to drastically reduce the numbers of employees anyway.
    Although, to be fair, it is better than Corbyn/McDonnell’s first steps to the Venezuelan system of expropriation of property, with their 10% (for starters).

  • A citizens’ wealth fund has the ability to effectively and affordably deliver a universal inheritance to all 25-year-olds.

    Trouble is that basic math tells you that more 25-year olds from “well off households” ie. lower middle class and upwards would benefit, so it will get killed; just like the Child Trust Fund. Remember one of the reasons for killing the CTF, was that it was the “well off” that made the extra contributions and thus stood to gain a meaningful sum of money after 18 years.

    Also the question has to be whether a citizens wealth fund is a windfall fund or an on-going re-investment vehicle that becomes self-perpetuating. Ie. does it simply hand out a 25th birthday cheque or does it seek to get people to do something with it, so that the fund gets back substantially more, to invest in the next generation of 25-year-olds. Hence it might be wiser to give out a smaller amount and only give out larger amounts to those with sound ideas. ie. treat the payouts as an investment and so make them according to the risk pyramid.

  • To argue a bit against myself (!) – there is an argument for universal benefits. We all contribute to the system, we should all get out. Services such as health, education etc. are provided IRRESPECTIVE of the ability to pay. And universal benefits such as child benefit, state pensions etc. are popular and get very widespread acceptance and so help the poor because they are universal – so yes, Prince George and old Etonians get them along with everyone else.

    There is an argument that we have a state insurance scheme that we all pay into to guard against ill health, provide pensions, and unemployment benefit and all get out of – and otherwise we would have to be providing our own private insurance.

    The Labour government got into major problems with pension credit – billions went unclaimed, there were major areas of unfairness such as those that sacrificed during the working life and built up a small private pension etc. etc.

    As part of our redistribution package I am in favour of a small citizen’s income / universal basic income. I wrestle with the issue that capitalism is unfair and therefore we should all get a share in the nation’s resources that capitalists exploit. Arguably a nurse contributes more than a premiership footballer. But also capitalism delivers a lot of efficient services to people and people should get a return on their capital, on their labour and skills and investment in education etc, on taking risks, on providing services that people want etc. etc.

    But I think as people like @Katharine Pindar and the others, have said in this thread we have to balance urgently needed money for public services against a handout of £10k for 25 year-olds for them (and there is of course an unfairness in an arbitrary age that UBI does not have) – if:

    I/they die of cancer earlier. Don’t get to university – simply because our schools aren’t up to scratch. Suffer in older age from poor social care etc. etc.

  • Katharine Pindar 1st Oct '18 - 5:59pm

    Yes, Roland, I think you are right that a Citizen’s Wealth Fund has to be a self-perpetuating investment vehicle, but by the consensus of comments here, not one that hands out a £10K gift to everyone on reaching the age of 25. However, I hope the party will continue to have ideas worthy of exotic spresms, not only because the phrase is too good to lose, but because we need the publicity! A worthy fund which increases the pupil premium or school budgets, Michael I, wouldn’t attract any attention.: it does need to be eye-catching, preferably with some individual beneficiaries being potentially handed a life-enhancing amount, perhaps for example to embark on a new worthwhile career. There could be a competition for that, linked to helping developing countries or mitigating climate change in some way.

    Innocent Bystander, if paper 133 were indeed ‘a charter to divert business from successfully competing in world markets’, it could hardly do that more successfully than Brexit proposes to do, aiming to divert business from our main current markets in Europe and the others that the EU has negotiated for us all.

  • Teresa Wilson 1st Oct '18 - 6:39pm

    Sorry Paul, but I can’t see this working. I’ve spent a lot of my life working with the vulnerable. Some people can’t handle money, some have addictions, some have mental health problems. They won’t get much benefit from the 10K, though in some cases their dealers will do very nicely out of it.

    Then there are all the people who are 26 or 27 when it is introduced – possibly the older brothers and sisters of the luck recipients. A recipe for resentment.

    Not to mention Waspi women like myself who think it should be spent on us – having been done out of our pensions that we paid into the system for – rather than handed out to youngsters who haven’t paid in much at all.

  • Innocent Bystander 1st Oct '18 - 9:55pm

    I can only but agree. I have no fondness for the EU but voted Remain because to leave will make a bad situation much worse.
    However, my points remains that these proposals only see business as a resource for social re-engineering and will only be burdens, not benefits, for enterprises already struggling.

  • Neil Sandison 2nd Oct '18 - 12:11pm

    The Conservatives will have a field day if we call it a universal inhertance fund .much prefer those young people to invest it into their education or careers so they can support themselves in future years by having the skills to survive in a rapidly changing jobs market through the proposed learning account .The other advantage of a learning account is that it is not age related and will enable all those of working age to adjust to new challenges in employment .

  • Peter Hirst 3rd Oct '18 - 3:12pm

    Personally, I’d prefer a basic universal income to act as a safety net for those falling on hard times. It could be funded by a wealth fund. It is important to ensure people feel safe when taking risks economically or socially. There would need to be a threshold or would be unaffordable as well as being unfair.

  • Simon Banks 12th Dec '18 - 9:30am

    Interesting. Two tangential points. (1): Paine was a Brit who hoped to find the American political environment more friendly than the Britain of the Revolutionary and Napoleonic wars. (2): the idea of universal income fits in well with the “Distributism” of the Chestertons and others in the early 20th century. This was for a while largely within Liberalism.

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