Are we witnessing a shift in favour of universal economic security? - RSA

Are we witnessing a shift of support in favour of universal economic security?


  • Economic democracy
  • Economics and Finance

There has long been a political sweet spot when it comes to considering how to support those on low incomes. Welfare economics established that it is ‘efficient’ to target resources on the poorest. And the social contract reinforces the notion that this is the right approach – income transfers should be targeted and conditional on good behaviour (usually actively seeking and taking work). Yet, new data published at the weekend could suggest that this version of the social contract may be weakening.

In an interesting survey seeking to assess the political attitudes and values of younger generations, the Centre for Policy Studies, a right-of-centre think tank established by Margaret Thatcher and Keith Joseph, asked a question on government support for people across their lives. They asked if assistance should be ‘actively’ provided to ‘all’ without condition or, at least, ‘whether they needed assistance or not’. The alternative option was essentially a description that broadly aligned with the current way of doing things. Should government leave ‘people to get on with their lives’ and only provide help when they ‘need help the most’?
One could quibble at the wording but broadly the question tested whether respondents were more inclined towards universalism or towards means-testing. And given that the broad political, policy and media consensus has been in favour of means-testing with few voices in favour of universalism, one would have expected overwhelming support for a more targeted approach. But that’s not how it played out. In fact, the options were evenly split at 38 per cent of under 40 year-olds for each option. A slight plurality of under-25s favoured universalism. 50 percent of Labour supporters under 40 favoured universalism - out of kilter with many in their party – and Liberal Democrats split evenly.
Of course, these underlying attitudes are highly relevant for those of us who have suggested that universalism may be worth revisiting. Basic Income falls into the universalist category. And like other surveys that have considered Basic Income previously, the reaction of people in general to the principle has been less ‘computer says no’ than much of the political elite (with notable exceptions in the Greens, the SNP, and parts of the Labour party). In fact, the idea appeals. The reaction to our own idea for the Universal Basic Opportunity Fund and access to up to two years of Basic Income (or ‘capital’ or ‘dividend’ depending on your favoured framing) was incredibly energetic and broadly positive.
What is going on here? There are a number of possibilities and here we enter the realm of speculation. One possibility is that economic insecurity is widespread – as our own work has shown – but felt far more keenly by younger generations. The thought of consistent, unconditional support appeals when you are stuck. Another possibility is that generational inequality has developed a sense of unfairness – where older generations benefit most from the universalism in the current system (such as the NHS as well as the Basic State Pension having some features of universality – a universal payment if you qualify). Why not apply the universalist principle to younger generations too? And could it be that, given the last decade and the impact it has had on wages, income and opportunity, that there has been a growth of a more solidaristic outlook?
All of these speculations require further investigation but the possibilities are tantalising and could signal that greater political change could be down the line.
The political consensus over the past quarter of a century is just one underpinning of the current social contract. The second element is a policy consensus with claims being made for the ‘efficiency’ of the current system. This element of consensus needs challenge too. Also at the weekend, it emerged that 0.5million young people had walked away from the social security system altogether. Excellent work by London Youth has identified this hidden army of the unemployed at risk of long stretches of acute poverty and unemployment. It matches expected and observed outcomes from heavily conditional, means-tested systems. The experience is humiliating and disempowering for many so they exit the system altogether. This is certainly cheaper for the state in the short term (the long-term costs are considerable, however) but is it ‘efficient’?
The irony of targeting is that it misses; universalism hits every intended target. Universalism costs more in the short term but the security it can create can pay dividends in the longer term – if systems of universal support are well designed.
Slowly but surely the current political and policy consensus could unwind. The simple fact is that the current system is not efficient in any meaningful sense of the word and the politics of the system could shift if the Centre for Policy Studies poll is anything to go on. Maybe finally, we can have a more mature and less ‘computer says no’ debate about different approaches to creating economic security and opportunity in the future. The signals are there.

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