The big question: Would a universal basic income bring an end to poverty and inequality?

1st June 2018

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Kelly Scagell

Dr Simon Duffy

Director of the Centre for Welfare Reform

“UBI is part of an answer to poverty and inequality, but only a part”

Shifting the world onto a more sustainable and just footing is less about policy and more about power. If basic income is implemented by elite groups, who seek only to reduce social resistance, it will do very little to make things better. But if basic income is part of a process of democratic and constitutional reform, then it could be transformative.

Since the development of the welfare state, there has been a tendency to think of the problems of social justice as being the domain of policymakers: civil servants, politicians, academics and thinktanks. Ordinary people are seen as recipients of policy, and the good intentions of the political elite have been taken for granted. However, this paternalistic model is breaking down. The system does not serve the interests of the poorest, the marginal or the disenfranchised. Power serves power.

UBI is a helpful and hopeful element in the creation of a new movement for democratic reform for several reasons. First, it is a clear and universal approach to income security – akin to the NHS. It abandons the controlling and technocratic obscurity of the old system and it puts everyone on the same footing. Second, it redistributes free time needed for civic and democratic engagement. Power will not shift to the people until the people are enabled to take on a greater measure of self-rule.

Professor Henrietta Moore

Director, University College London’s Institute for Global Prosperity

“Extending the social safety net we have is far more efficient“

The idea of UBI has been gaining traction, buoyed by a trial in Finland and support from leading tech billionaires.

On the face of it, it has obvious attractions – but how practical is it in reality? Critics point to several intrinsic problems. Any fixed payment made to all, unless regularly uprated, would be vulnerable to erosion by inflation, as with existing benefits. It might also tempt neoliberal governments to view this ‘income’ as an replacement for publicly funded services. Perhaps most decisively from a public policy perspective, it’s an extremely expensive way of providing a fixed benefit to the entire population.

By contrast, public services provide economy of scale and fairness of access. These principles lie at the heart of an alternative model proposed by the Institute for Global Prosperity, which we call Universal Basic Services (UBS).

Our inspiration comes from the publicly funded services provided free at the point of need that we already have in the UK, most notably the NHS. We’ve modelled providing free accommodation via a big expansion of public housing, free public transport, provision of broadband and smartphones, and free food to tackle undernourishment.

We believe this could have a transformative effect on society and the economy, by equipping people with the essential building blocks they need as the foundation for a prosperous life.

Anna Coote

Principal fellow, New Economics Foundation

“It is an ill-conceived, rickety, audacious little cart put before the seriously big horse of radical political change“

UBI is an alluring idea, but is interpreted in many contradictory ways. It has been promoted as a partial income for all that is far from sufficient to live on; a cash handout to the poor in some communities; and a living income given to a section of the population as a temporary experiment. None of these reflects all the characteristics on which UBI’s popularity seems to depend: a cash payment that is universal, unconditional and sufficient. Trials have consistently failed to test all of these together.

Nevertheless, UBI is presented as a ‘silver bullet’ for shooting at anything from automation and joblessness to stigmatisation and gender inequality – but with barely a scrap of evidence. Even its supporters admit it would be hugely expensive and need endless supplements.

There are far more urgent political causes that could really tackle poverty and inequality. We need more and better income support, with simpler, less punitive conditions; more and better public services, with resources pooled to meet everyone’s basic needs for education, health and care, decent housing and affordable transport and utilities; and more and better workplace bargaining to drive up wages and shift power from capital to labour.

Barb Jacobson

Co-ordinator Basic Income UK & Founding member UBI Europe

As much as universal basic income (UBI) became a popular topic four years ago, when it was met with not so much derision as wonder, at the moment, think tanks are scurrying to come up with alternatives to UBI. Anything but ‘just’ give money to people!

Some of these alternatives would be sensible to have alongside UBI, such as universal services and incremental improvements to the tax and benefit system. Others promise to do exactly what UBI does but better, such as the Guaranteed Minimum Income, or tying the money to national service.

What these proposals generally miss is that universal cash, to spend as people will, is the strength of UBI. This is what has caught the public’s imagination. UBI is now supported by over 50% of people in the UK and Europe overall, and by over 60% of under-35s.

Entirely missed by think tanks is that whatever impact it may have on jobs, UBI will have a huge impact on families and how people care for each other.

By each person getting a regular payment of equal value whatever their role, relationship or status, UBI will directly affect the power relations within families. Parents and children could have more time with their own kids and elders. Women and men could share caring responsibilities more equally. Disabled people could have more independence from their carers. Relationships could form without financial dependence being a factor - and without the state prying into our bedrooms.

Perhaps this is why UBI is accused of being a panacea: so many of our personal and societal problems have at their root individuals’ lack of cash, and this affects people at every level of society. Other policies may be improvements on the current situation for all, or improve the circumstances of some in poverty - but no other policy has UBI’s symbolic value, as an equal share for everyone.

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