Basking in the glory of the Conservatives’ 2019 election win, Rishi Sunak would never have guessed that, four months later, he’d be a Tory Chancellor playing socialist by paying the salaries of almost a quarter of the private-sector workforce.
The government is keen to return to the old normal, but the coronavirus crisis has pushed previously radical ideas closer to the mainstream.
None more so than basic income.
Today, a basic income seems more like a necessity than a luxury, as many have found that their jobs are unexpectedly precarious, and an unprecedented number have found themselves applying for Universal Credit.
So what is it, and how would it work? Sussex Bylines spoke to Maggie Gordon-Walker and Richard High of Basic Income South East to find out.
Their petition for a basic income trial in Brighton & Hove will be presented by Councillor Martin Osborne to the full council in October. The trial would aim to explore the impact of basic income on workers in precarious employment, on poverty and inequality, and on community and social cohesion.
The petition argues that basic income ‘would dramatically reduce, if not eliminate poverty in the UK, improve the well-being of everyone and help the local economy. Every individual would receive regular payments from the government with no strings attached, taking away the conditionality that the current welfare system has. By covering everyone’s basic needs, a basic income would enable them to … thrive rather than just survive.’
Anyone who has experienced the stressful and demeaning process of applying for Universal Credit would surely support the removal of conditionality. But, critics ask, why give people money for nothing?
Richard High responded, ‘Many people work for nothing – parents, community volunteers at food banks or homeless charities and so on – and their work is not recognised by the current means-tested benefit system, despite the fact that it is worth billions to the UK’s economy. A basic income guarantees a basic level of financial security for everyone.’
Gordon-Walker, also the director of charity project Mothers Uncovered, was moved to create the petition partly because her work has shown her how many families, especially mothers, are struggling. She said, ‘The ONS has estimated there were around two million mothers at home in the UK, branded ‘economically inactive’, yet doing the equivalent of around £350bn of unpaid childcare. Mothers and fathers and those that care for elders or the disabled should be supported to do their caring work, not be stigmatised and shamed into ‘going back to work’.’
And today’s benefits system is ill-designed for its ascribed purpose of pushing people into work. Currently, those moving from universal credit to paid employment can lose 73% of their earnings, while under a basic income scheme, they would keep their basic income, giving them greater choice and flexibility in the labour market.
Indeed, a recent trial in Finland found that basic income boosted recipients’ mental and financial well-being, as well as modestly improving employment.
Sounds great – but can we afford it? ‘Can we afford not to?’ responded High. ‘Wealth inequality is rising, while social mobility is falling. The old system isn’t working for everyone, just the few. We need to look at how we can change this to make things fairer for everyone.
‘Economists and think tanks – including Compass, the Royal Society of Arts, Professor Guy Standing from the Progressive Economy Forum, UBI Lab Sheffield, and the New Economics Foundation – have developed detailed proposals for a basic income and how it will be paid for. Funding options include progressive taxation, so that higher earners pay their basic income back in tax; closing some of the 1,156 HMRC-registered tax loopholes, many of which disproportionately benefit the wealthy; increasing corporation tax to 2010 levels; plus options such as a carbon tax, which would tackle the climate emergency and distribute revenues to everyone in the form of a basic income; or the creation of a sovereign wealth fund, which has funded the modest basic income in Alaska since 1982.’
With its radical tradition, it is no surprise to see Brighton & Hove as one of the cities leading the way. High said that ‘a basic income pilot in Brighton would contribute to the discussion and public awareness of the tax and benefit system, particularly around how the system works, where money goes, conditionality, and possible alternatives.’
Gordon-Walker said that Brighton was the perfect place for a trial. ‘It’s seen as being an affluent city, which it is, but there is a lot of deprivation too. Even those living in areas that are not considered ‘deprived’ are struggling to make ends meet. The women who attend our groups are not wealthy. Many work in jobs that barely cover the very high rents that exist in the city.’
In a society where so much unpaid work is done, and where automation threatens traditional employment, we need to reconsider our work and benefits system. The coronavirus crisis has sharpened that focus, exposing the holes in our welfare system.
So we need to think again about the work that people do and how it is valued. No surprise, then, that everyone seems to be talking about basic income. It increasingly seems like the core of a modern welfare system that works for all. As Brighton and Hove council moves to new management, the time for radical thinking is now.
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