Our very committed steering group member Ellen Clifford stayed up until 1am to speak to canadian radio about our concerns on UBI. Also speaking about concerns about UBI was John Clarke from Ontario Coalition Against Poverty. You can hear the discussion here
A much more detailed and authoratitive study will be published shortly but as others support the concept we wanted to flag up just some of the reasons we’d suggest great caution is needed in relation to a Universal Basic Income.
Concerns with UBI
- The UK has in place a complex and targeted social security system. UBI trials in countries without the same levels of support infrastructure produce positive results, for example the pilots in Madhya Pradesh showed significant benefits for disabled people such as being able to afford food and medical assistance, as well as providing independent income for disabled people so they are not entirely reliant on families and enabling autonomy. Introducing a UBI in the UK would require that all or some of our present benefits and support systems are replaced which would be a far more complex undertaking. The distribution of gains and losses would depend upon the detail of the UBI scheme.
- The cost of UBI in the UK at Guaranteed Minimum Income levels would significantly exceed current spending on cash benefits and tax-free allowances. A budget-neutral UBI would therefore require either a UBI below GMI levels, or additional tax increases.
- Full UBI schemes that are in any way financially feasible result in big losses for disabled people. As a result, supporters of UBI such as the Citizen’s Income Trust now recommend a partial UBI where disability benefits (and housing) are retained as a separate parallel system. In Annie Miller’s 297 page Basic Income Handbook she includes just one page on “The needs of disabled people” (of which half a page is about carers) where she says “Disability benefits are based on need and are therefore a different system from BIs… Both housing and disability benefits are very much in need of revision but are beyond the scope of this book. The interaction between BI and support for these costs (and between them) would need to be considered in developing policy in each area.”
- Supporters of a partial scheme where disability benefits are retained assure us that no disabled person will be worse off under UBI. We were told the same thing about Universal Credit and that has proved not to be true. The social security system is extremely complex and without detailed modelling setting out exactly how UBI would sit alongside a system of disability benefits sufficient to meet need it is difficult to be confident that it could work in this way without losses. A briefing to Nicola Sturgeon states: “Significant modelling effort would be required to establish levels which did not impact negatively on vulnerable groups.” One key benefit that UBI would most likely replace is ESA yet the rate of ESA for those in the support group is significantly higher than what is considered a feasible UBI level. This brings the prospect of “rough justice” for those who face the most disadvantages. The University of Bath paper presents an idea for a UBI with additional disability and severe disability premiums which when micro-simulated produces strong reductions in inequality and poverty but would be very expensive and require significant increases in income tax. The report authors conclude: “The unavoidable reality is that such schemes either have unacceptable distributional consequences or they simply cost too much.” DPAC members have concerns that the process for proving eligibility for disability premiums could be as problematic as the current system for applying for existing benefits.
- Not only would running a UBI in parallel to disability benefit systems be complex, there is also the potential danger of increased stigma against those for whom the UBI is insufficient to meet their needs and less public will to fund them.
- The disability benefits system is not fit for purpose. While proponents of partial UBI schemes propose retaining current disability benefits, disabled people are calling for an urgent overhaul. We are concerned about how the long and complex task of introducing a UBI would impact on the considerable task of reforming social security for disabled people. Attempting to manage both at the same time risks mistakes and as we have seen under welfare reform, where admittedly the many ‘mistakes’ are the result of deliberate ideological policy, mistakes cost lives.
- Alongside an adequate standard of income, disabled people require other support services in order to enjoy full and equal participation in society. The current crisis in social care is one example of the urgency of the question of how to fund these. If independent living support remains under the administration of local authorities, then in order to end the situation whereby disabled people’s rights are being breached on a daily basis by lack of provision, one obvious solution would be to remove the cap and increase council tax. Increasing council tax alongside an increase in income tax to afford UBI could by very unpopular. Disabled people are calling for independent living support (i.e., social care) to be removed from local authorities and instead administered by a national independent living support system to be paid for out of general taxation. We are concerned that the introduction of UBI funded by increases in income tax will reduce the amount available to fund an independent living support system capable of meeting disabled people’s needs. While many disabled people would be in favour of tax rises to fund welfare provision – particularly corporation tax and a progressive rise in the higher rate of income tax – the use of this for a UBI rather than more traditional forms of disability and unemployment support would mean much of the benefit flowing back to employers rather than those in most need. In functioning as a wage subsidy UBI would act to significantly reduce employers NI contributions. It would be hard to make a case that this is a more progressive solution than simply reversing much of the damage that the Tories have done to current systems.
- There is also a more general concern about pressures on public spending and negative impacts on social programmes as a result of introducing a UBI. In Hirsch’s paper for the JRF he warns about the need to take account of the fact that income tax is used for public expenditure other than income transfers and the dangers of underestimating the rate of income tax increase required without making cuts in public services.
- The distributional impacts of a UBI mean that there are winners and there are losers– whereas under the current system the biggest losers tend to be those who face the biggest barriers, eg disabled people and the poorest members of society, some UBI models will benefit low income deciles while increasing inequality for the poorest. This is at odds with what the public generally understand as the aims of a social security system. It also has the potential to divide against each other groups of people who are currently united in our opposition to the rich elite who we see as responsible for growing inequality and poverty.
- UBI provides a useful contribution to the debate on the future of social security where it adds support and evidence for the need to end conditionality and the impacts of inadequate income and punitive approaches in moving people further from the labour market. However DPAC’s view is that this is the extent of its usefulness.
- UBI in the wrong hands could be extremely dangerous. Libertarians want to use it to sweep away the welfare state including the NHS while neoliberal governments see it as a way of forcing unemployed workers into insecure low paid jobs. The version of UBI being trialled by Finland’s right-wing government has been described as a “UBI-as-workhouse nightmare”. Ontario Coalition Against Poverty issued a statement supported by Canada’s largest public services trade union saying “The emerging model of basic income reflected in pilot projects and initiatives in a number of countries and jurisdictions is one that would intensify the neoliberal agenda”. John Clarke from OCAP has written ““The neoliberal attack is taking up Basic Income as a weapon. We need to fight it instead of laying down a welcome mat.”
- UBI compensates for while leaving unchallenged the structures that cause inequality. This is no doubt why Silicon Valley is so much in favour of UBI as a way to tackle the problem of job losses through automation, because it ignores the question of the ownership of the technology. Instead, UBI accepts the status quo. By subsidising low wages there is a danger that UBI could encourage employers to further drive down wages and job security. This is a concern to disabled people who are statistically much more likely to be in low paid work than non-disabled people. A large proportion of politicised disabled people know that capitalism has no reason to accommodate us, in fact the very opposite, and that full disability equality cannot be achieved under the current system. Instead we need a socialist society operating on the principle of from each according to their abilities to each according to their needs.
- The emancipatory impacts of UBI can only be realised by a level of payment sufficiently high to free us from wage labour. If the conditions were such that we could introduce that, it can be argued that we would then be in a situation where we had arrived at socialism and didn’t need UBI. Introducing a below poverty-line UBI will do little to improve the material circumstances of those who are most in need but would require a big upheaval – bearing in mind that millions are already suffering following the enormous shake up of the social security system introduced since 2010 – while creating a new pattern of winners and losers.
- Britain is home to the biggest socialist movement in Europe where demands for a living wage, for health and social care support services free at the point of need and a social security system that provides an adequate standard of living free from conditionality are all popular. These are what we need to fight for.