UBI – a lot more than a policy - RSA

Universal Basic Income - a lot more than a policy


  • Economics and Finance

We call the RSA’s methodology ‘emergent impact’. On the one hand, this means a set of approaches to change – dynamic, iterative, co-productive, multi-model – which offer an alternative to the top down, lever-pulling, method encoded in most traditional policy. On the other hand, it is about combining two ways of acting which might at first glance seem to be largely incompatible – the slow, methodical business of system analysis and the fast, trial and error method of social entrepreneurship.

Let’s explore this in relation to one of our toughest issues – welfare reform. As sharp and authoritative as always, the Resolution Foundation highlighted earlier this week just why the biggest welfare reform of recent times - Universal Credit - is unlikely to succeed. Essentially, the failure to match the reform’s ambition with funding and to adapt it to changing circumstances means that it is likely to deliver as many perverse outcomes as intended ones; some people will have stronger financial incentives to take a job or work longer hours but many others won’t and, while pressure on claimants will increase with even more people seeing their benefit docked, there is no credible account of how Universal Credit will support people to advance beyond low pay. 

Resolution’s analysis is forensic but standing back from the detail the reasons for Universal Credit’s projected failure are systemic. The welfare system is characterised by a policy trilemma. This is a situation in which out of three core goals only two can be met at any one time. For welfare the three prongs of the trilemma are: reducing costs, incentivising work and saving, and helping the most disadvantaged. From Frank Field to Iain Duncan Smith welfare ministers have told us they can defy this trilemma - they have all been wrong. As the Treasury has ever more stringently capped the projected cost of Universal Credit, so its ability to both help the poorest and to incentivise work has diminished.

There are two responsible ways of responding to the welfare trilemma. The first is simply to recognise it and admit that something has to give. This is what Duncan Smith did implicitly by resigning when he could not persuade George Osborne to be more generous. The second is to redefine the system itself so that the reform of welfare is more strongly connected to wider social and economic strategy.

The RSA’s emergent impact approach to universal basic income (UBI) seeks to apply these lessons and also to think about change itself differently. So we recognise at the outset both that UBI will cost more (but not we believe hugely more) than the benefits and allowances it will replace and that it will need to start at a very modest level –meaning, for example, little or no change to the income of workless households.

UBI also seeks to step outside the trilemma by redefining the contours of the welfare system. UBI is not seen as a benefit to help the unfortunate but instead as an entitlement to assist all citizens to make better choices and have more fulfilling lives. UBI does aggregately increase work incentives (because people don’t lose entitlement when they get a job) but integral to the RSA’s model is refocussing employment services away from policing claimants and on to helping people achieve career progression. Indeed, UBI is as much a strategy about the future of work and citizenship as a benefit reform. 

But the idea of emergent impact takes us further. Unlike Universal Credit which is an unwieldy top down reform being done to people, the ultimate success of UBI depends on public engagement and institutional reform.  Winning the case for UBI is about preparing society and citizens for what it has to offer and embedding its principles and possibilities in the way institutions work.

At a recent RSA/Café Culture event in Newcastle a very learned Fellow challenged me on UBI. ‘Surely’ he said ‘it will make limited impact on the real socio-economic issue of our time - widening inequality’. My answer was that one of the aspirations for UBI is that it acts as a tool for social reflection and democratic renewal. 

By dissolving the current distinction between ‘worthy’ recipients of the basic tax allowance and unworthy recipients of work benefits (both of which would be largely replaced by UBI) the policy could start to overcome social prejudice. Similarly, by balancing the rhetoric of conditionality for the poor with a commitment to freedom and dignity for all, UBI could help to open up a wider debate about the relationship between economic growth, citizenship and human flourishing.

None of this will happen without years of debate, organisation and experimentation. Like all attempts at radical social change there will be failures and set-backs as moments of opportunity to be seized. Unlike Universal Credit, UBI must be seen not just as a policy initiative but as part of an emergent impact model of social reform emerging from and flowing into wider currents of change and aspiration.  

Find out more about the RSA's model of Basic Income

Read our Basic Income report online - Creative Citizen, Creative State  (via Medium) 

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