The Case for Universal Basic Income

2020 was a year of reckoning. The pandemic revealed flaws in UK governance, including our social security system.

An additional 690,000 people fell into poverty, with young people bearing the brunt because they largely work in sectors like hospitality, where 81% of the workforce were furloughed or made redundant. Conversely, Black, Asian and other ethnic groups are 47% more likely to be in zero-hour contracts and are therefore less likely to benefit from basic legal protections in the workplace. This was the harsh reality for my dad. He has worked and contributed to our social security system for decades, yet he was blindsided with the lack of financial support when he caught the virus. With schools kept open for months, my dad, like all essential workers, put his life on the line every day by going to work and literally paid the price for it.

My dad fell severely ill with the new strain of COVID-19 in November 2020, and recent hospital scans show that he now has lung damage. By the time he was diagnosed, he had already infected my mother and sister, so he was unable to work for three weeks as he had to isolate for an extended period while they all waited to become non-infectious.

As a contractor, my dad was not entitled to any sick pay. They signposted him to a one-off COVID-19 payment of £500 from local authorities, but he was not eligible because he does not claim any benefits. He received a mere £96 per week in Statutory Sick Pay while fighting the deadly disease.

One can only wonder what someone in a more desperate situation would do in these circumstances. How easy would it be for someone to self-isolate if they had no other way to keep their lights on and put food on the table, but by going to work?

Universal Credit

Universal Credit was touted as a saviour during lockdown, but it proved to be unfit for the purpose of providing social security. Hundreds of thousands of Universal Credit applications were rejected and even those which qualified for a reduced level of support found that they were only able to cover a fraction of their monthly outgoings including rent, mortgage and other bills.

The state of our social security system has come as a rude awakening for many who found themselves relying on it unexpectedly. Approximately 26% of new universal credit claimants are from managerial, administrative and professional backgrounds, now experiencing the flaws of a welfare system which is designed primarily for people on low incomes.

Daniel Edmiston, a lecturer in social policy at the University of Leeds, declared the UK benefits system incapable of meeting real-life living expenses. People who were furloughed typically lost 9% of their income, while those on universal credit saw lost 47%. Furlough has maintained most recipients’ standard of living, while productivity levels have reached new heights with people exploring new ventures, looking into new careers, home-schooling, upskilling, networking and learning online. These outcomes have unintentionally created a solid case for Universal Basic Income, with furlough demonstrating that “free money” does not impede on productivity.

Universal Basic Income

In the words of Guy Standing, Universal Basic Income is:

“a modest amount of money paid unconditionally to individuals on a regular basis; intended to be paid to all, regardless of age, gender, marital status, work status and work history”.

Standing argues that UBI creates sustainable, economic growth and protection against possible large-scale unemployment — both issues which we are facing imminently. The main arguments against UBI are listed below, along with my rebuttals:

· UBI will discourage people from working — the pandemic has shown that we are wired for productivity; just look at the amount of volunteers, learners and entrepreneurs who have been produced amidst a pandemic

· It will increase costs for government — £16 billion remains unclaimed in means tested benefits every year. Furthermore, a smarter government will strategise better ways to redistribute the wealth which we produce through taxes and national insurance.

· We will unnecessarily pay the rich — a lot of our systems already do this through tax breaks, lower interest rates etc. hence the poverty premium

· UBI can provide funding for bad habits — Welfare benefits also run this risk, but we agree that they should exist for the greater good

· It will make low-paid jobs unattractive — a lot of lower paid jobs are already being automated. In addition, human beings are not a monolith, nor are our aspiration levels, so we cannot assume that no-one will go for lower paid jobs.

Guy Standing designed a UBI trial in 2010, which was funded by UNICEF. It was launched across 20 villages in the Indian state Madhya Pradesh and the outcomes were “overwhelmingly positive”, including:

“Improved sanitation, improved child and adult nutrition, better health, better healthcare, and improved school attendance and educational performance. In general, people spent the extra money sensibly.”

He found that social equity improved for everyone, with specific benefits for people with disabilities, women and those from lower castes.

Maintaining a United Front

If one good thing came out of 2020, it was the recognition of people power. We united for the NHS, Black Lives, transport for under 18s and more. We encouraged the government to provide £30 vouchers for school meals after a lot of resistance on their end, and much of the population has seen sense regarding Jeremy Corbyn’s push for free access to broadband for all.

We have witnessed the impact of speaking up as a collective, so we cannot drop the ball on matters of financial inclusion. A 2020 YouGov poll indicates that 51% of the UK population have seen sense by approving UBI. Councils in Sheffield, Leeds, Liverpool, Hull, Glasgow, Edinburgh, Kirklees, Fife and North Ayrshire have all expressed enthusiasm for pilot schemes, so it is up to us to capitalise on this moment and demand that our public contributions be used to provide us with genuine social security.