UBIandpoverty - RSA

Yes, Universal Basic Income can help #endukpoverty


  • Economic democracy
  • Social justice

Poverty in the UK is a persistent blight. The dials barely shift over time. Twenty years ago poverty afflicted slightly over 25 percent of families with children. Today it's 25 percent. For those of working age without children it has increased. The singular, definitive success story is pensioner poverty. More on that later. But overall the picture is poor. And over the past five years, the situation has, if anything, been getting worse. The Joseph Rowntree Foundation (JRF) has tracked all this meticulously to its enormous credit.

This record is remarkably bad. In the 2000s, tax credits were introduced at a cost of tens of billions of pounds. These are heavily targeted on the poorest. The employment rate has increased - to record levels. Welfare conditionality has supported this increase. Jobs plus targeted welfare was meant to take a chunk out of poverty. It's done no such thing. In fact, poverty risk for working families has become worse according to JRF.

Minor technical changes are not the answer to poverty

And despite all these changes, attitudes towards welfare and welfare recipients remain harsh. As a result, support including tax credits has been incredibly easy to cut, restrict, and harden for those who need supplements to their income - except pensioners- over the past few years. Poverty static, attitudes harsh, massive increased expenditure hardly making a dent, it feels like the current anti-poverty strategy is failing badly. In fact, it's going so badly that it is difficult to conclude anything other than a radical change is needed. Minor adjustments to Universal Credit hardly seem adequate to the task.

And yet, confusingly, minor adjustments to the status quo is exactly where Chris Goulden of JRF, in a blog stating the organisation's opposition to Universal Basic Income (UBI) as a ‘distraction’, seems to end up. Of course JRF advocates a range of perfectly sensible policy positions but it seems odd that technical changes are seen as an alternative to UBI and adequate to the task. A minor adjustment to work allowances is the one positive proposal in the blog.

There's a lot take issue with in the blog. It is factually inaccurate to describe Finnish basic income experiments as ‘aborted’, despite erroneous media reports. The assertion that Basic Income advocates ignore disability, housing, and childcare suggests a severe lack of reading around the subject. And the intellectual endeavour of taking one illustrative model and then presenting it as a concrete proposition for a UBI and calculating definitive impacts on poverty (with INCREASE capitalised in case you missed it) on that basis of that is bereft of merit. There's a million and one ways of designing a basic income scheme. And it is absolutely clear that a ten percent increase in the basic rate of tax will not be included in any of them - that's for the illustrative models only. There are a myriad of ways of funding UBI and increasing the tax take to do it: not least through growing the economy over time (which is how tax credits were largely funded). The current system won't be switched off one day and UBI switched on the next. Things will transition over time - as they almost always have with tax and social security.

Poverty is an absence of power not simply a metric

Besides, poverty is not a number in an equation (useful as it is to have numeric guides as broad indicators). And when useful numeric benchmarks become cast iron parameters perversity of policy follows. See a recent blog for what has happened when single numbers drive policy in other areas.

So we find ourselves in a situation where if Basic Income increased median income which is a good thing it could perversely increase numeric poverty at the margins. But if you are a family of three with a low income and you are given an unconditional income of, say, £15,000 as a baseline (with housing support etc on top) do you feel that the support is a bad idea because you've ended up slightly the wrong side of an imaginary line?

We need benchmarks but we also need to understand them as such. Poverty is about a range of factors (income being an important one); the agency you have over your life in relation to others, the belittling effect of dependency in meeting your own needs cannot be captured in singular metrics alone - hence our approach to economic security which combines quantitative and qualitative analysis.

More presciently, the blog is self-contradictory in regard to the desk modelling method. "What we don't yet know is how people will respond to UBI in practice," the blog states. Precisely. You can't reliably assess impacts on poverty - and the existence of poverty - with spreadsheets. Pilots are necessary - with ethical safeguards in place. If the outcomes of pilots demonstrates significant harm to those on low incomes then of course UBI would not be the right option. And nor do we know what design of UBI will be in place. Our future selves are perfectly capable of designing schemes with the goal of combating poverty in mind. And they will be helped if they have good evidence of impacts - from a range of trials.

Understanding public attitudes to welfare

The blog asserts that the public will never accept welfare unconditionality according to public attitudes surveys, despite the fact that half the public support the idea in principle. And yet, the NHS is unconditional and universal. The most popular parts of the welfare state - the NHS and the Basic State Pension - are the most unconditional and universal elements. But that's because elderly and sick people benefit surely? In part for sure. Maybe people are willing to support services but not cash? Well, the Basic State Pension is cash. But there's something else going on too.

Just say the NHS wasn't universal and in fact the full benefits only accrued to those on very low incomes. Let's say it was like the US system of Medicaid. Do we really think there would be anywhere near as much public support for it as the NHS enjoys? The lack of opposition to cuts in tax credits gives us the answer to that. Means testing as the blog advocates sets the majority against the minority. That's a disastrous political strategy. Universal Basic Income - like the NHS - encourages rather than counteracts solidarity. How do I know? Because in Alaska which has a basic income style universal payment, support for the system and the principle of universality is high.

Let's indulge in a second thought experiment. It's 1997, and faced with high rates of poverty, lowish public commitment to doing anything about it and a high potential cost of introducing tax credit, you wonder what to do. Do you really look at the cost and public attitudes as an anti-poverty campaigner and say 'it's all too difficult, what technical changes can we implement?' Despite the fact that I don't see tax credits as the ultimate answer, thank goodness the Government of the day didn't take that attitude - inequality and poverty would be far worse today given changes in the labour market.

But that is really what the JRF blog amounts to in its consideration of Universal Basic Income. At just the moment when we need big, new ideas, experimentation, a search for an energy behind change, the UK's leading anti-poverty organisation is effectively saying 'no can do'. I genuinely hope they reassess their position - JRF is an essential institution - and get behind the cities, towns and communities who see the need to try something new, to see what UBI can offer, and challenge a status quo that JRF has shown isn't working. This includes a group of towns and cities in Scotland who can see the impacts of the current system on poverty and inequality - on inclusive growth - and want to experiment with a system, Basic Income, shown to have enormous social benefits wherever it's been tried. They could do with the committed support of the UK's leading anti-poverty charity.

There isn't one answer to the UK's poverty challenge. Of course there isn't. But if we shy away from approaches that are sometimes bold and challenging, we will continue to fail to make any real dent on poverty at all.

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