Covid-19 bulletin 37: the pandemic leads an MP to make the case for UBI

Bethan Winter, MP for Cynon Valley (right) is advocating a Universal Basic Income (UBI) and urging Labour to adopt that policy.

She reports that a cross-Party Parliamentary and Local Government Working Group on UBI, has recently been established. It includes cross-party MPs, local authority councillors, metro-mayors, peers and LGA officers and stresses the need to test alternatives to the current system such as basic income pilots

A public poll by YouGov in 2020 found that, having seen the effects of the coronavirus pandemic 51% of the public in the United Kingdom support a universal basic income, with 24% unsupportive.  A public petition on the UK government website that ran for 6 months from 16 March 2020 to 16 September 2020, calling for universal basic income, raised over 114,000 signatures. Bethan wrties:

The Covid-19 pandemic has laid bare the extent of poverty and inequality in our society. It has also exposed the inadequacies of our welfare system to act as a safety net for people, from the insufficient level and restrictiveness of Statutory Sick Pay (SSP) to the five-week waiting time for Universal Credit (UC).

As we emerge from lockdown we are facing a very damaging recession, as well as ongoing economic insecurity and a climate emergency. We must grasp this moment and do everything we can to achieve a fairer and more resilient society and economy.

A vital part of this will be to replace our dysfunctional benefits system with one that provides financial security for everyone who needs it. Universal Basic Income (UBI) – an unconditional and regular cash payment to everybody regardless of their income or situation – is gaining significant traction as a solution to many of these issues.

Though recognising that UBI has cost implications, Bethan points out that some of these can be addressed by measures including:

  • raising additional tax revenues as the economy grows from the effect of the stimulus,
  • ”People’s Quantitative Easing” with the Bank of England putting money into the economy to help pay for it (as they did in 2008),
  • government borrowing and paying some of the debt back afterwards through progressive taxation
  • and closing some of the 1,156 tax reliefs in the UK, many of which disproportionately benefit the wealthiest households.

Simple video about UBI here

Economist Harry Shutt* has demonstrated that a much higher rate income tax would be needed to guarantee everyone an adequate basic income and that such rates have been applied in the past and were consistent with better economic performance than at present. He adds that such high rates are currently the norm in Scandinavian countries, where income inequality (and the social ills that go with it) are much less than in the Anglo-Saxon countries – see Wilkinson and Pickett, The Spirit Level).

Bert Schouwenburg – International Officer at the trade union GMB –  lists five advantages  of UBI:

  • It would end the poverty trap caused by means testing, ensuring that everyone who opts to take paid work will be better off and makes part-time employment a more affordable option.
  • It would act as a safety net for those considering self-employment or indeed for those already in the often bogus self-employment of the platform economy who want to leave.
  • It would signal an end to the demeaning and punitive system of assessing entitlement to benefits and the hideous (now privatised) bureaucracy that goes with it.
  • It would recognise the unpaid work of millions of family carers who are disproportionately women and, if needed, allow them to leave abusive relationships where they are dependent on a male partner’s income.
  • And parents could opt to bring up their own children rather than being forced out to work only to hand over what they earn to a child minder or nursery.

Bethan Winter points out that UBI is gaining increasing support among politicians including within the Labour Party. Keir Starmer’s cautiously welcomed a consideration of UBI when interviewed on the Andrew Marr show.

Wales’ First Minister, Mark Drakeford, has said that he has been interested in the idea of a basic income for forty years, and “we’re up for playing our part in such an experiment”. And Sophie Howe, the Future Generations Commissioner for Wales (above) has made a commitment to UBI, which she regards as a very real solution to helping people out of poverty.

*Harry Shutt began by focussing on the problems of the developing world and how the living standards of the overwhelming majority of the world’s people could be raised to bring them closer to those of the industrialised world. After working for a British trade union for a period he became a freelance consultant, working mainly for international development agencies such as the World Bank, UNDP, European Commission etc.

 

 

 

 

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Posted on October 17, 2020, in Admirable politician, Economy, Finance, Poverty and tagged , , , , , . Bookmark the permalink. 1 Comment.

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