Downes and Lansley (eds.) It’s Basic Income

Amy Downes and Stewart Lansley (eds.) It’s Basic Income, Policy Press, 2018, pbk, 256pp, 1 4473 43905, £14.99

This book disappointed me after the high quality of the report Stewart Lansley co-authored for Compass. In that publication, Lansley and Reed argued for replacement of an ‘increasingly complex, punitive and unpopular system of social security, [which …has become a weak tool for social protection but a strong tool for waste and the humiliation of those on the very lowest incomes.’]  Yet these features of Universal Credit, [a looming reality with the national UK roll-out planned for October 2018,] get barely a mention in ‘It’s Basic Income’. Whereas the Compass pamphlet mentions the support for UBI within all political parties as a reason why the idea is gaining credibility, this little book exposes the contradictions between different arguments for UBI, without doing enough to reconcile their incompatibilities.

The volume’s 38 very short, sometimes superficial, essays present an array of views in defence of UBI, some arguments against it, and some accounts of practical UBI pilots. Its main value may be to lead UBI lobbyists to reflect on the way advocates of UBI from different political stables see it as part of a different political agenda. Hopefully this will invite debate about the limitations of UBI. What additional policies do we need to make UBI work as an anti-poverty measure? What are the risks of perverse effects of UBI and how can we avoid them?

The editors and Louise Haagh refer critically to the right wing case for UBI as a way of downsizing the state, and replacing welfare services ‘in kind’ by cash transfers. The right is represented by Mark Zwolinski’s chapter, and is behind the Californian experiment described by Elizabeth Rhodes, with Mark Zuckerberg being amongst its supporters. Such a policy package is not redistributive, and could increase inequality if the cost of healthcare and education rises through privatisation. Ed Whitfield warns that UBI would not alter wealth distribution (although one might contend that wealth taxes could contribute to its funding) nor the way production is controlled and organised.

Anti-poverty campaigners Rodriguez-Montemayor, Oestereich, and others want UBI to redistribute income alongside preserved or expanded state services. In these essays, they fail to recognise that for the redistributive aim to succeed, funding sources must be found outwith the labour share of national income from which income tax is largely drawn. Karl Widerquist however makes a case for redistributing profits as UBI, and Martin Ford makes the helpful point that tax rates to finance UBI could be higher for unearned income. Largely ignored by contributors is the problem that funding UBI largely from existing benefit ‘pots’ and tax allowances  would merely re-arrange the existing cash transfer ‘pot’ rather than increase it. It might alleviate the poverty trap but only to introduce an additional trap of increased competition for part-time and temporary jobs, probably driving down wages in ‘entry grade’ employment and encouraging both agency hiring and zero hours contracts. High ‘disregards’ for earnings by benefit claimants in France, Germany and Belgium in the 1990s led to proliferation of precarious work and ‘mini-jobs’ . [1]

Some contributors (e.g. chapters 1, 2, 3 and 11) accept the inevitability of precarious work, or widespread job loss due to roboticisation, seeing UBI as a prop to employment incomes in the face of these trends. But as the editors’ introduction points out, the real issue is; who gains from automation – the corporation or its workers?  They fail to draw the conclusion that unless UBI is funded from the profit share of GDP, taxpayers would subsidise large, wealthy companies to dispense with labour costs.  Bartley and Lucas, Elbaeck and van Parijs consider that UBI would assist a shorter working week, but ignore the possibility that if workers receive in-work benefits, employers may reduce their ‘recruitment wage offer’ without attracting fewer applicants. Thus taxpayers may end up financing a wage cut rather than the rise in leisure, education and caring time that several contributors want to see, or the ability to resist low pay that Olivia Hanks and others regard as one aim of UBI. Only with a large enough UBI to facilitate substantial withdrawal from the labour market would that take effect.

This invokes the question of what supporting measures are required to ensure UBI has the desired effects of reducing poverty and helping people to choose shorter working hours.  Ursula Barry offers some important ideas here about improving the status of women and carers. But trade unions’ perspective seems a glaring omission from the book.  They see UBI only as one part of a needed package of labour market regulation. They have repeatedly called for better minimum wage levels, a repeal of the anti-trade union laws of the Thatcher and Blair eras, and restriction of zero hours contracts. Unions have valued EU directives supporting fair treatment for agency, temporary and part-time workers, whose UK application may become a casualty of Brexit.

By omitting the trade union viewpoint, this book underplays one of the most important arguments for UBI; its unconditionality.  Louise Haagh is an exception, citing the Danish municipalities who have dropped conditionality as being ineffective, in effect making social assistance a UBI.  As sanctions have become increasingly punitive and widespread, the unconditionality of UBI has become increasingly attractive to trade unions and to unemployed people, with UNITE campaigning against sanctions and their extension under Universal Credit even to claimants in part-time work.  Ruth Lister’s call for a ‘participation income’ is not balanced by any contribution referencing the long tradition of opposition to punitive conditionality from unemployed people themselves. [2] Since 2015, several unions have worked closely with unemployed people’s groups for welfare reform, focussing on opposition to sanctions; UNITE, PCS and USDAW have endorsed UBI in policy statements and a TUC conference motion. [3]  Surprisingly, Peter Beresford in his chapter calling for a user/claimant input into the UBI debate makes no reference to these initiatives.

The chapters on pilot experiments provide interesting insights into their varied nature and how superficial has been their press coverage. An unmentioned problem of pilots is that they provide evidence only on recipients’ behaviour – they are surely not large enough to provide evidence about the effects on employers’ wage-setting or hiring behaviour.  Whilst the African, Indian and Brazilian experiments provide a real addition to incomes of people who previously had no cash transfers, the others merely pay benefits differently to existing welfare claimants. Both Finnish and Dutch pilots are limited to jobseekers, emphasising encouragement to work. Otto Lehto suspects the Finnish one could revert to job-search conditionality.  Alexander de Roo reports that the municipalities promoting the Dutch pilots have had to fight central government’s pressure to introduce a workfare element. The Ontario pilot, as described by Benns and van Draanen, is means-tested, with a withdrawal rate of benefit of 50% against measured earnings, more like UC than a true UBI. Can this achieve the vision of a cooperative economy and strengthening trade union power in Lewis and McKenna’s chapter on the Canadian UBI movement? Or is it merely a slight alleviation of the benefits trap?

The apparent lesson from this book is; firstly, we need more clarity about what counts as a UBI, and what supporting measures are needed to achieve a real defence against poverty and insecurity. And secondly, whilst Brenton Caffin’s chapter welcomes the ‘unlikely alliance’ of right and left wing advocates who want a UBI as part of opposing and incompatible agendas, we should recognise its dangers, already perhaps reflected in some of the ‘first world’ pilots.

 

Dr Anne Gray is a Visiting Research Fellow at London South Bank University and is the author of Unsocial Europe: Social protection or flexploitation? (Pluto, 2004)

 

Notes

[1] Anne Gray, 2002,‘European perspectives on welfare reform – a tale of two vicious circles ?’  European Societies, vol. 4/4, 359-380,

[2] B. Jordan, Paupers: The Making of the New Claiming Class, Routledge & Kegan Paul, 1973

[3] UBI was mentioned in the Welfare Charter developed from a joint PCS/UNITE/Unemployed Centres Combine conference in 2015. Subsequently, the TUC’s 2016 conference passed a motion endorsing UBI (C13 no.68/69, proposed by UNITE and USDAW ).

 

 

 

 

 

 

 

Footnotes

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.