Basic Income and the (endless) coronavirus crisis

It is now nearly six months since the first national lockdown was imposed in the UK to try to rein in the rate of Covid infection and avoid overwhelming the capacity of the NHS to respond.
In those six months there have been more than 40,000 deaths and 130,000 hospital admissions attributed to the virus.

At the same time, economic activity has plummeted and the government has spent billions of pounds on various programmes (like the furlough scheme) in an effort to maintain people’s wages and avoid mass layoffs.

As the furlough and other support schemes start to wind down in September and October, the country faces a new surge of coronavirus infections and, in response, the prospect of more lockdowns, perhaps more localised and targeted this time round but nevertheless hugely disruptive to the lives and livelihoods of millions of people.

It is starting to look like, as far as society is concerned, coronavirus is an illness that may require chronic management rather than emergency intervention.

Economic activity has recovered but is nowhere near the pre-pandemic levels yet. With rolling lockdowns and activity curtailed in many sectors like aviation and entertainment, the economic prospects of many people remain very uncertain.
It is particularly in times like these, when large numbers of people are being asked to make real sacrifices for the sake of others as well as themselves, and when economic uncertainty will hover over everyone for potentially prolonged periods of time, that a Basic Income could make a significant and positive difference to individual lives and social cohesion.

A Basic Income (also known as a Universal Basic Income) is a simple concept: A regular payment to all qualifying residents, no questions asked.

A Basic Income is:

  • Unconditional: A Basic Income would vary with age, but there would be no other conditions: so everyone of the same age would receive the same Basic Income, whatever their gender, employment status, family structure, contribution to society, housing costs, or anything else.
  • Periodic: Someone’s Basic Income would be paid weekly or monthly, automatically.
  • Without means test or behavioural requirement: Basic Incomes would not be means-tested. If someone’s earnings or wealth increased, then their Basic Income would not change. Similarly, claimants would not have to report that they are looking for work or engaging in any kind of behaviour to qualify for a Basic Income.
  • Individual: Basic Incomes would be paid on an individual basis, and not on the basis of a couple or household.
  • As a right of residency: Everybody legally resident in the UK would receive a Basic Income, subject to a minimum period of legal residency in the UK, and continuing residency for most of the year.

Every week, or every month, everyone would receive their Basic Income into their bank account. It would start when they were born, and it would stop when they died.

As pointed out before, the Government was not able to introduce any kind of emergency Basic Income when coronavirus struck because it does not have a database with the details (and, crucially, bank accounts) of all residents who would qualify. There are partial datasets in National Insurance databases, passport databases, driving licence databases and others, but no mechanism to reach all residents in a time like this.

Traditionally the British public has been reluctant to let its governments create such overarching datasets, as they are regarded with suspicion as potential “Big Brother” control mechanisms. It is an open question whether consensus could be built around creating such a data set for the positive purpose of giving everyone a Basic Income.

Coronavirus is proving a tough and long-term opponent and this type of event cannot be seen as a one-off in our increasingly interconnected, globalised world. In fact, pandemics like this one have been predicted regularly over the last decade.

Unlike other economic crises, the one unleashed by the pandemic and subsequent lockdowns did not hugely affect the supply of goods and many services. Supply chains were resilient and people were still able to access food and many other goods via online and other means.

But with many people losing, or at risk of losing, their jobs as large sectors of the economy came to a standstill, disposable incomes to buy those goods have dried up.

In a situation like this, providing every citizen with a minimum of disposable income on a regular basis (a Basic Income) would have shored up confidence and greased the wheels of economic activity in those sectors that did not shut down because of the pandemic. It would also have sent a strong signal to those who were having to sacrifice their livelihoods in order to keep others safe that everyone in society was looking after them.

The UK Government’s response, in spite of its multi-billion pound price tag, has failed to reach large numbers of people, who are then left with invidious choices between risking their lives or risking their livelihoods in order to weather this pandemic.

A few months ago, we wrote an article entitled “Coronavirus and the next time it happens“. But the “next time”, it turns out, is now, and action on giving everyone a secure financial floor to weather these shocks has to start happening now too.

Footnotes