Despite its moral and policy challenges to Labour, the idea of basic income grows

Neal Lawson

The parliamentary backwards-and-forwards over Brexit conceals two realities: what caused Brexit and what is happening now in our country. While all eyes are on the ‘ayes’ and ‘noes’ of the numerous meaningful and meaningless lobby votes over our always half-in-half-out relationship with Europe, the state of the increasingly precarious social and economic existence of millions goes by almost unnoticed.

The gap between rich and poor is widening in this country. Children go to school hungry and dirty; incredibly, life expectancy rates are falling. More people are in work but work doesn’t pay and the so-called ‘social security’ system provides nothing of the sort.

Somewhere, just over the horizon, the march of the machines can be felt. They may not be replacing jobs yet – but the common feeling is that when tech productivity provides greater returns than the lowest possible wage levels, jobs will go. There is no system of benefits that that can paper over the cracks of the precarious and fluid labour market. Universal credit is a mess – the last rotten hurrah of a system that tries to square work and security.

All of this and more are reasons for which people are turning to basic income (BI) as an idea whose time has come. An unconditional and non-withdrawable weekly payment to everyone – it is as transformative as ideas get. It challenges the whole rights and responsibilities agenda and the historic purpose of the labour movement, which is to provide dignity and a decent living for all through work.

Before we can ask whether BI could or should be a Labour policy, we have to be convinced that the old social democratic offer of good work and pay no longer holds. For the growing band of BI adherents, from Ed Miliband to John McDonnell, the argument seems to be that it can’t. The solid modernity of the factory, the job for life, even the promise of flexicurity or job guarantees are just not strong enough.

In our increasingly liquid modern world of the gig economy, there are no job guarantees and trade unions are sadly too weak to bargain effectively for workers. A welfare system that humiliates the weakest in our society – to dragoon them into work they would otherwise not do, for pay that wont keep their heads above water – is simply the most horrendous of indignities. So despite its moral and policy challenges to Labour, the idea of BI grows.

The biggest and best criticism to date has been that BI is either set at a rate that is too small to make a difference or too high to be affordable. A new report from Compass, the organisation I chair, Basic Income For All: from desirability to feasibility, aims to answer that central criticism. Authors Stewart Lansley and Howard Reed, in modelling work supported by the Friends Provident Foundation, shows how it would be possible to pay a weekly BI to adults (up to 64) of £60, to children of £40 and to adults over 65 of £175. Even at these modest rates, the proposed BI scheme would be transformative. It would:

  • Pay, for example, a significant, no-questions-asked, £10,400 a year for a family of four
  • Cut child poverty by more than a third and pensioner poverty by almost a third
  • Narrow the inequality gap
  • Lead to gains for three-quarters of all households, with the largest gains among the poorest households
  • Strengthen the universal element of the benefits system and reduce dependency on means testing
  • Take the UK back to the level of social security spending in 2010, but with a much more progressive and universal system in place

For the first time, there would be a guaranteed income floor below which no individual would fall, and that would gradually rise over time. Even if this is not enough to persuade you of the moral or practical benefits of BI, it is worth allowing the debate to flourish. For what the discussion around BI opens up is this: what is a good society and a good life; how much should we work and what sort of work; what else should we do and how can we be fully human? Let’s have that debate and test BI, a shorter working week, universal basic services and more against those tests.

Any post-Brexit agenda has to deal with the economic and therefore social insecurities that fostered the biggest national event since the Second World War. The aftermath of that war saw the creation of 20th-century social security – the aftermath of Brexit must be the creation of a 21st-century system of social security with BI at its beating heart.

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