Compass report launched

A report on the launch event for the Compass report Universal Basic Income: An idea whose time has come?

House of Commons, Monday 6th June

Committee Room 11 was packed for the event, which was chaired by Ruth Lister. Howard Reed, who had done the microsimulation work for the report, explained that a scheme that retained means-tested benefits was financially feasible, would have a net cost of £8 bn per annum, and would make a significant different to levels of child poverty and inequality. Stewart Lansley, the reports other author, explained a Universal Basic Income’s appropriateness to a changing employment market, and the now inappropriate nature of the current benefits system – and that the debate is therefore moving on to questions of desirability to questions of feasibility. A scheme that retains means-tested benefits would increase the element of universality in the system, and would be a step towards a larger UBI that could be funded from the profits of a social wealth fund.

Ursula Huws, who had written the preface to the report, gave facts and figures on today’s more diverse employment experience.

Then Jonathan Reynolds MP described today’s benefits system as too complicated and too likely to result in dependency and stigmatisation, Universal Credit as not the right answer, and Universal Basic Income as a simple and secure financial foundation and as conducive to human dignity. It would both reduce poverty and make it is easier to retrain – essential in a more competitive world.

John McDonnell MP, the Shadow Chancellor, described a Universal Basic Income as asking important questions and offering possible answers. It would reduce poverty, incentivise employment in a changing society, enable people to choose to care for children and other relatives, and be a useful mechanism for sharing out economic growth.

Discussion explored Universal Basic Income’s capacity to provide more choice over the use of time, to make the sanctions regime redundant, to abolish any perceived difference between the deserving and the undeserving poor, to reduce the use of foodbanks, to liberate us, to attract support from across the political spectrum, to make zero hour contracts positive for both employees and employers, and to protect incomes when we need to reduce GDP in order to save the planet. Suggestions were made that young adults should receive the same as other adults; that the first UBIs should be for children; that pilot projects should be organised; that we should aim at a UBI that provided sufficient income to live on; and that an earnings disregard should be applied; that employment rights and a National Minimum Wage would still be necessary; and that Trade Union support is required. Objections were raised: Would the UBI become a maximum income? Couldn’t the money be spent on something more worthwhile? Would people still do the difficult jobs? Would it work if it wasn’t global?

The panel responded. Howard Reed agreed that a separate rate for young adults was not essential, emphasised that a UBI was not a replacement for other universal provision such as the NHS, and explained the likely dynamic effects of a UBI in terms of increased productivity. Stuart Lansley explained that the scheme that retained means-tested benefits could be implemented quite quickly; that £8bn to reduce poverty by 40% was good value for money; and that we would still need a National Minimum Wage. Ursula Huws asked that the UBI debate should not get mixed up with debates about immigration. Jonathan Reynolds suggested that a UBI represented an optimistic view of human nature, and should therefore be attractive to the Left; and that universality was the best way to target. The NHS is popular, so a UBI could be.

John McDonnell suggested that the current benefits system does not address basic needs, that the acceptability of a little understood new universal benefit will be difficult to achieve, that the narrative needs to be right, and that we need to attend to implementation methods. UBI is an idea whose time has come.

Ruth Lister, in her closing remarks, spoke of UBI providing security in a time of increasing insecurity.

Footnotes