Patrick Allen, Suzanne J. Konzelmann, and Jan Toporowski, eds., The Return of the State: Restructuring Britain for the Common Good, Newcastle, Progressive Political Economy Forum, 2021, pbk, 1 788 213 297, 208 pp, £12.60
This book is a collection of some 19 short essays (plus introduction) on how to reconstruct the British economy put together by the left-leaning Progressive Economic Forum (PEF), an organization of economists and academics. The immediate context is the Covid-19 pandemic, although the analysis is situated in a wider conception of the UK economy as suffering significant problems grounded in austerity, inequality and emerging climate emergency.
To give a flavour of the collection: Robert Skidelsky and Ann Pettifor respectively contribute essays on finance and the economy; Kate Pickett and Richard Wilkinson highlight the importance of equality to a post-pandemic health policy; Guy Standing has a chapter on the commons. There are specific treatments of housing, health- care, social care, education, and taxation.
The result is a very welcome and stimulating set of essays that point the way towards radical economic reform. One limitation of the collection is that there is not much explicit reflection on the political character of the ‘Britain’ in the book’s title and of the implications of this for economic and social policy. Areas of presently devolved competence are of course acknowledged in specific policy discussions. But at a time when the future structure of the UK state itself is in question there is a need for a more thorough discussion of how progressive economic policy might integrate with political reforms. This is not only because the future of the political system matters in its own right but because the content of economic reforms is intertwined with the political. We cannot assume that the existing structure of the UK state is either desirable or here to stay.
Of particular interest to those engaged in discussion of universal basic income are two excellent chapters by Stewart Lansley on creating a ‘citizens’ wealth fund’ and a guaranteed income floor. In one chapter Lansley considers two recent policy proposals: that for a guaranteed minimum income (GMI), put forward by Alfie Stirling and Sarah Arnold at the New Economics Foundation as a response to Covid-19 pandemic, and his own proposal (developed with Howard Reed for the Compass think-tank), for a Guaranteed Income Floor (GIF). The GMI aims to secure a liveable income for all (£220 per week for a single working-age adult, £322 for a couple) but employs means-testing and takes the household as the unit for the assessment of means.
The GIF, in contrast, is a universal basic income providing all individuals with an unconditional floor of income from which to build. However, Lansley argues that this has to be introduced at a modest level – £60 per week for adults and £40 per week for children. Thus, relative to the GMI, there will be much more of a need for top-ups from other benefits. While the GIF’s initial level is modest, though, its level could be gradually increased, reducing the need for some of the top-up benefits over time.
This is where the citizens’ wealth fund chapter comes in. Following in the footsteps of the economists James Meade and Gerald Holtham, Lansley argues that progressive policy- makers need to give more attention to wealth ownership. Like them, he advocates setting up a special kind of sovereign wealth fund – a citizens’ wealth fund – ‘a collectively owned pool of wealth, owned on an equal basis by all citizens’ (page 169). (Will Hutton’s chapter in the book also proposes a citizens’ wealth fund.) Lansley sets out a plan to transfer £50 billion of existing publicly-owned assets into the fund, along with another £50 billion from long-term government bonds. This would be topped up by a further £50 billion per year from taxes and capital dilution, requiring the top 350 firms to issue new shares to the fund equal to 0.5% of their current share value, up to a ceiling of 10% of corporate stock in total.
Lansley calculates that a fund of this size would grow into a substantial public asset pool in time. Annual returns from the scheme may be used to raise steadily the level of the guaranteed income floor. Lansley’s perspective is thus a long-term one, looking ahead many years. He is sceptical that the UK can establish a liveable universal basic income in one immediate reform – a ‘big bang’ moment of change. While some readers might find this disappointing, others will see a picture here of how universal basic income might realistically advance in the nations of the UK (or post-UK): start modestly and build up, and use a range of funding streams including taxes and dividends from common asset ownership.
This reader first came across the idea of basic income in the mid 1980s. I find it sad, but also motivating, to think that if Lansley’s proposals had been enacted in the UK back then we might now have something not that far off a liveable universal basic income.
Stuart White is Lecturer in the Department of Politics and International Relations, Oxford University, and Fellow in Politics at Jesus College, Oxford.