Jun 212018
 

(For a word version of this article with references, click this link and then click on the document icon: DPAC-UBI )

 

Introduction

If disabled campaigners weren’t previously worried about growing support for the idea of a Universal Basic Income, then following the publication of the World Bank’s draft annual report for 2019 (2019 WDR), they should be now. This document clearly articulates the link between intensification of the neoliberal agenda and provision of a basic income, putting forward a policy programme of extensive labour deregulation including lower minimum wages, flexible dismissal procedures and zero-hours contracts , compensated in part by a basic income “modest in size” so as to “be complementary to work” and financed largely by regressive consumption taxes (i.e. increasing VAT). The study warns that care must be taken in scrapping existing benefits, but these proposals are a far cry from the urgent demands for greater security of income and of employment for those who can and want to work being made by those currently suffering under the dismantling of the welfare state. The approach taken by WDR 2019 in affirming “the importance of work as a complement to healthcare and education in the production of human capital” has worrying echoes of the mantra that “work is good for you” reinforced throughout Tory welfare reform policies that have caused avoidable harm to millions of disabled people.

Universal Basic Income – the idea of replacing complex social security systems with a single non-means-tested, unconditional flat payment to everyone regardless of employment status – is an idea that has steadily been gaining traction internationally on both sides of the political divide over the past few years. While right wing libertarians see UBI as a means to eradicating the entire welfare state including free healthcare, proponents on the left argue it has the potential to free the working class from wage labour and foster individual creativity and fulfilment. In Scotland, four Councils have bid for funds to pilot UBI schemes with support from Labour, SNP, Green and, in one case, Conservative councillors. Within the UK, UBI is being presented as a solution to a number of modern economic and political problems including the need to find an alternative to the considerable and well-evidenced failings of the current benefit system. Given the prominence of that line of reasoning within burgeoning comment and analysis, it is then notable how little attention has been given to the specific implications of UBI for disabled people .

UBI is not a new idea but over recent years has gained significant global currency becoming the focus of numerous studies and worldwide trials. Few of these manifest every characteristic of a basic income and to date there is no precedent for what it would mean to replace an existing complex social security system such as we have in Britain with a UBI . The 2019 WDR states that “For the moment, a true UBI is largely a theoretical proposition.” In Scotland even before the pilots began, Nicola Sturgeon publicly questioned the feasibility of the idea . Pilots in other developed countries are focused primarily on incentivising employment and have been met with opposition from anti-austerity campaigners: the version of UBI being trialled by Finland’s right-wing government has been described as a “UBI-as-workhouse nightmare” while opponents to Ontario’s guaranteed minimum income pilot have stated that “BI [basic income] is being developed as a measure of neoliberal attack that should be opposed” and “The hope that there is any realistic chance of ensuring a truly adequate, universal payment, that isn’t financed by undermining other vital elements of social provision, is misplaced” .

In Britain, as Labour prepares for the possibility of a Corbyn-led government, UBI has emerged as a key component within efforts to develop an alternative vision for social security. A 2016 paper from the think-tank Compass entitled “Universal Basic Income: an idea whose time has come?” called for a pilot in Britain. John McDonnell is supportive of UBI with both the TUC and Unite, Britain’s largest trade union, passing motions endorsing basic income in 2016 . By contrast, the Conservative party remains heavily opposed to the idea, fervently sticking to their commitment to dismantle the welfare state through increasing rather than removing conditionality. Conditionality – the idea that social security claimants must commit to “doing” in return for state-funded support with deemed non-compliance resulting in the sanctioning of payments, often reducing an individual’s income to zero – has been further and further intensified the longer the Tories have been in power . This trajectory is set to continue with the roll out of Universal Credit, extending the reach of benefit sanctions to those in part time work not deemed to be looking hard enough for additional work, and the introduction of the Health and Work Conversation as a new stage within the application process for Employment and Support Allowance which has now extended mandatory activity to all disabled people including those with high support needs and terminal illness, with very few exemptions.

As disabled people suffer under the impacts of welfare reform and a social security system designed to deny eligibility and punish rather than support claimants, there is an obvious attraction to the idea of UBI as an automatic payment administered without assessments. Supporters argue that with everyone, regardless of income status or disability, in receipt of a universal payment, this could lead to the de-stigmatisation of social security, ending the scapegoating of benefit claimants and associated hostility towards disabled people. However, if we look beyond the basic concept of UBI at what the detail of implementation would mean for disabled people, we see a more complicated and potentially regressive picture. The Citizens’ Income Trust, one of the major supporters of a basic (or “citizens” income) in the UK, now advocate that both disability and housing benefits would need to remain outside a model of UBI, which would mean continuing assessments and potentially conditionality for disabled people. Concerns have also been raised in a number of articles that funding a UBI would entail cuts to benefits and services that “vulnerable” groups including disabled people now receive.

Neoliberal versions of UBI promoted by right-wing economists and politicians offer a stark warning about the dangers of UBI. Paying each person a minimum basic income rather than investing in a living wage and social protection is seen as a way of ‘saving money’, reducing the size of the state and public services. Sam Bowman, executive director of the Adam Smith Institute, wrote in 2013: “The British government spends more on welfare than it does on anything else apart from healthcare…The ideal welfare system is a basic income, replacing the existing anti-poverty programmes the government carries out.” In the US, Charles Murray has proposed an annual unconditional grant of $10,000 for every adult while scrapping the rest of the welfare state, including Social Security and Medicare. Similarly, Milton Friedman advocated a similar system called Negative Income Tax where those who earned below a certain income threshold would receive money back from the government instead of paying any income taxes but also where all other existing welfare programmes would be abolished. The implications of such proposals on those with the greatest needs including disabled people would be devastating and, as pernicious as our social security system has become, would affect an even more serious and dramatic regression of living standards.

With over three million disabled people currently receiving social security payments in the UK today, DPAC would argue that disabled people need to involve ourselves in the debate on UBI, both in gaining an understanding of the wider economic implications of UBI and in identifying and voicing the implications for disabled people. The aim of this article is thus both to present an over-view of the wider arguments for and against UBI and to focus more specifically on the question of what UBI might mean for disability benefits and disabled people in Britain. UBI has been credited with achieving all sorts of radical and progressive changes in society such as balancing the economy, replacing incomes lost through automation and leading us towards a workless future, but, as DPAC’s Canadian allies Ontario Coalition Against Poverty warn, placing a welcome mat for the introduction of a basic income legitimises the neoliberal agenda of undermining social provision, increasing the rate of exploitation and disregarding the needs of disabled people.

 

Worldwide UBI pilots

Although the last few years have seen UBI pilots announced across the globe, such that Basic Income Earth Network founder Guy Standing dubbed 2016 “the year of the pilot” , there is to date no precedent for a UBI replacing a complex social security system such as we have in Britain. Examples cited by UBI supporters including pilots in Madya Pradesh and, historically, Manitoba province in Canada, and partial schemes operated in Alaska and Iran, are limited in their applicability and tell us little more than that giving money to people is popular and that decreasing poverty produces positive outcomes. More significantly, trials in Finland and Canada demonstrate how UBI can be used to fulfil a neoliberal agenda focused on pushing unemployed workers into poorly paid and insecure work. Models linked to the forthcoming Scottish pilots indicate that disability benefits will be retained alongside a basic income while Nicola Sturgeon’s advisors have warned that public money would be better spent on those most in need.

Limitations of examples used to support UBI    

Two pilots in Madya Pradesh in India launched in 2010 produced positive social and economic outcomes for the recipients with disabled people benefiting more than others through greater access to food, medical assistance and autonomy as well as enabling some to become economically active . This is hardly surprising given that many of those benefiting had received no previous support: only a minority of low-income households in all 20 of the villages where pilots took place had a BPL (Below Poverty Line) or Antyodaya Card and some of the poorest households had no poverty card at all. Unconditional payments enabled disabled recipients to move from dependency upon family members to being able to meet their own basic needs. Giving something to people who previously had nothing is very different to what would happen with the introduction of a UBI in Britain to replace existing social security payments.

A pilot conducted in Manitoba province in Canada in the 1970s was credited with eliminating poverty from the trial saturation site which was the small town of Dauphin. Here, in a programme known as “Mincome”, a guaranteed income was provided to those who had fallen out of work with 50% of every C$1 earned on returning to work clawed back. It stood out from similar American projects at the time because it didn’t exclude older people or disabled people from eligibility. The aim was to test whether giving unconditional payments to top up the incomes of the working poor would dis-incentivise paid employment. The finding was that working hours did not significantly decrease, although it can be argued that these drops may be artificially low because participants knew the guaranteed income was temporary. The Conservative government that took power provincially in 1977 – and federally in 1979 – had no intention of rolling the programme out more widely and shut the project down. No final report was ever compiled. A recent survey of the data as it related to other services in Dauphin found a significant reduction in hospitalization, especially for admissions related to mental health and to accidents and injuries, relative to the matched comparison group. It is again unsurprising that increasing the incomes of the poor leads to improved health outcomes and again the findings are too limited as an evidence base to justify the replacement of existing social security systems with a UBI. They do support the idea that ensuring the population has an adequate income will produce cost savings in areas such as healthcare.

There are two global examples of partial UBI schemes where citizens receive unconditional cash payments that are often cited by basic income supporters but which have limited relevance to Britain where taxation would be the most likely source of funding. In Alaska, citizens each get a variable amount each year – averaging around $1,100 (about £700) between 2010 and 2012. This money comes from taxed oil windfalls via the Alaska Permanent Fund and is paid as an annual dividend. Iran similarly uses oil revenues to subsidise a cash payment of about $33 a month given unconditionally to most of the population. The payment has partially replaced heavy subsidies to basic commodities such as bread and fuel including petrol. Neither example goes anywhere near providing a living for their recipients and are not a replacement for safety net support.

The Neoliberal Danger of UBI                                                                                                                                                                                                                                                      

Basic Income (BI) pilots being taken forward by neoliberal governments in Finland and Canada exemplify how UBI supports negative employment trends such as low pay and insecure employment and can facilitate exploitation. In Ontario, 70% of those tested in the pilot will be low waged workers and earned income will be deducted at a rate of 50%. (This is technically an example of Negative Income Tax rather than UBI). The amount paid under the pilots are insufficient to live on and act as top ups to low paying employers, subsiding business from general tax revenues and making it easier for employers to lower minimum wages. Participants will be subject to fewer conditions in return for BI payments but will lose support and services they currently rely on. A whole range of additional entitlements benefiting disabled people will also be lost including the Special Diet that provides additional income on the recommendation of medical providers, medical transportation assistance and mobility aids. Ontario Coalition Against Poverty (OCAP) points out that if the Ontario government were genuinely concerned about poverty and disability, they would urgently reverse the 22% welfare benefit cuts made by the Mike Harris government in 1995 and “Raise the Rates”, rather than spend years consulting and testing a basic income.

While the Finnish experiment has received positive press in Britain, focused in particular on the removal of bureaucratic intrusion and conditionality on job-seekers , left wing commentators in Finland are critical of its impacts. The trial involves 2000 mandatory participants randomly selected from unemployment rolls and paid €560 (£500) per month. This effectively replaces the payments from the existing Finnish basic unemployment allowance and labour market subsidy , but participants continue to receive the payments if they find work.

For the Finnish government, UBI is about increasing employment , which was a key Centre Party manifesto commitment in the 2015 election, encouraging workers to take bad jobs with low pay. Low-paid workers or adults out of the labour force for reasons other than unemployment were deliberately excluded from the pilot. Alongside trialling UBI, Centre has set out to achieve its policy goals by other measures including reducing the country’s unit labour costs and increasing the retirement age. Its version of UBI is a way to replace social protections with minimum payments while dismantling the welfare state through accelerated privatisation of health and social care. This represents a direct attack on Finnish trade unions whose collective bargaining power has remained higher than in the UK , and if rolled out has the potential to reduce the income security of unemployed workers while reducing the strength of organized labour.

Left wing commentators in Finland have described this as “a cautionary tale for basic income proponents on the Left”, evidencing how support for UBI on the basis that it will deliver progressive outcomes opens the door for the introduction of a scheme “forcing unemployed workers into bad jobs while undermining organized labour, earnings equality, and the welfare state.” As John Clarke of OCAP argues “The neoliberal attack is taking up Basic Income as a weapon. We need to fight it instead of laying down a welcome mat.”
In the UK we must not be fooled into seeing the Finnish experiment as offering a solution to the devastation that welfare reform has caused. Aside from the regressive realities of the Finnish scheme, there are considerable differences between the two countries that make it inappropriate to transpose any progressive benefits of the current experiment to the UK. Writing in The Guardian, Ellie Mae O’Hagan warns against a UBI “simply parachuted into a political economy that has been pursuing punitive welfare policies for the last 30 years.”

UBI as “unworkable” policy

In September 2017 while launching the SNP’s “Programme for Government” Nicola Sturgeon announced plans for the Scottish government to fund local authorities to conduct experiments into a “Citizens’ Basic Income” (CBI). This is in line with the official position of the Scottish National Party who at their 2016 conference passed a motion in support of the principle of a universal basic income. The motion stated: “conference believes that a basic or universal income can potentially provide a foundation to eradicate poverty, make work pay and ensure all our citizens can live in dignity”. The motion called for more research into the impact of the policy. Sturgeon’s announcement was welcomed by the think-tank Reform Scotland who in 2016 published a report making the case for UBI heavily influenced by Green Party policy .

The four Councils who are set to run the pilot schemes with the support of a £250,000 grant from the Scottish government (Fife, North Ayrshire, Glasgow and Edinburgh) were identified by the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) whose 2015 report ‘Creative Citizen, Creative State: the principled and pragmatic case for a Universal Basic Income’ made a call for local experiments . The models to be adopted by each of the pilot areas have yet to be announced but will likely require a two year lead in and last for around two years, following principles for UBI pilots outlined by Guy Standing in his book “Basic Income and how we can make it happen” . These include the principle that pilots be conducted on a saturation basis involving all residents. This will provide a more universal test of the impacts of UBI than either the Finnish or Ontario trials which have selected groups of particular groups of people to test.

Another key principle promoted by Standing is that people should be no worse off than if they were in receipt of means-tested benefits. Based on the detail of models promoted by UBI proponents involved in the pilots as discussed below, it is unclear how this can be achieved. A research paper prepared for Fife councillors concerning plans for their local pilot explains that most models set the level of basic income at £73.10 for working age adults. There is no detail on what benefits will be replaced but the paper is clear that “Housing and Disability Benefits payments would need to remain and be kept separate” and that “Means-testing of benefits would continue, but the amount received by each household or individual would be recalculated to account for the amount of basic income”. The paper presents the possibility of enabling people to choose not to work as a positive feature of CBI but this is unlikely on a weekly income of under £75. As one Fife People’s Panel member commented “£73.10 per week + benefits is not enough to live on”.

Glasgow Council has commissioned the RSA to develop its proposals for a Basic Income Pilot. The RSA Basic Income Model proposes £71 per week for working age adults which appears to replace ESA. Although housing and non-means tested disability benefits including Personal Independence Payment will be retained this nevertheless represents a loss for disabled people in the ESA support group. Modelling of the RSA scheme undertaken by the Housing and Social Justice Directorate for the First Minister estimates that over 10% of households in the lowest decile in Scotland would experience negative financial impacts, over 30% in the second lowest and just under 50% in decile 3. Most households would be losing in the region of 20% of their income.

The RSA report makes strong comments on the importance of doing away with the devastating impacts of conditionality and sanctioning, however it is also clear in its primary intention of incentivising employment and making work pay. They propose to pay no more than a “basic” income in order to ensure that those who are “fit and able to work…would have a very strong incentive to do so.” The report states that “It is Basic Income and Basic Income alone that sends out absolutely clear yet non-coercive signals about the incentive to work.” It also suggests design features such as a public “contribution contract” for 18 – 25 years olds to sign up to committing themselves to learning, working or entrepreneurship in return for their payments , and the supplementation of BI payments with offers of sub minimum wage employment in “publicly useful” roles such as “day centre staffing” .
The report by Reform Scotland “A Basic Income Guarantee” has a more singular focus on the role of UBI in incentivising work. It states that “Any system which actively discourages work, as the current system does, is in urgent need of an overhaul” and stresses the need for “a ‘safety trampoline’ to encourage more people to rejoin the workforce or set up new businesses”; it says that “the system in place at present actively discourages many to return to work or increase hours” and that “This inherent and long-standing problem with the current system is the principal reason for the Basic Income Guarantee”.

Using proposals from the Scottish Greens as the basis for their financial workings, Reform Scotland suggests a Basic Income could be set at £5,200 per year for adults and £2,600 for children which would replace the personal allowance, tax credits and a number of benefits. Under this model, Employment and Support Allowance, Housing Benefit, Severe Disablement Allowance, Carers Allowance and Personal Independence Payments are all retained. The cost of this model would be £20.4 billion. Reform Scotland proposes raising all levels of income tax by 8% but their calculations for affording the model are still short by some £2 billion. This is substantially more expensive than the RSA model which the First Minister has already suggested is unfeasible.

In October Nicola Sturgeon, while continuing to support the trials, publicly raised the possibility that CBI might prove unworkable as a policy. Speaking during the Inclusive Growth Conference, she said: “I should stress our work on this is at a very early stage. It might turn out not to be the answer, it might turn out not to be feasible”. Her comments followed publication of a briefing for the First Minister obtained by the Scottish Tories via a Freedom of Information Response. Attention from right wing media focused on figures within the briefing taken from RSA’s Basic Income model costing implementation at £12.3 billion with a £3.6 billion shortfall raising the prospect of cuts elsewhere. The briefing also highlighted work by the Joseph Rowntree Foundation which found CBI would need a tax rate on all earned income of about 40 per cent if housing benefit was not included, rising to over 50 per cent if it was.

The briefing is strongly critical of CBI citing potential negative impacts on disabled people and “vulnerable” groups, pointing out how “most governments will not be able to afford both CBI and a generous welfare state.” It states “The higher the CBI the more likely it is to lift people out of poverty, but the higher the public finance cost to fund it and the harder it would be for government to fund other supportive social policies.” Concerns are raised about the potential of CBI to further entrench inequalities and increased stigmatization of benefits which will be claimed by a smaller group of the population. The briefing concludes that “significant modelling effort would be required to establish levels which did not impact negatively on vulnerable groups”.

Concerns in the briefing echo the view of Joseph Stiglitz, who has served as an economic advisor to the Scottish Government since 2012, that pursuing a basic income would represent misaligned priorities in light of Scotland’s fiscal constraints. In an interview for Sunday Politics Scotland in October 2017 he said: “If you don’t have a lot of resources, isn’t it better to try to target the limited resources you have at those who really, really need it, the people who are disabled, the people who are elderly without other sources of income, a variety of people who are seriously disadvantaged. The problem with the universal basic income is that you give a flat amount to a large amount of people, and that means, because you have so many people, you can’t give as much as you would to help those who most need it.” Instead he has urged the government to prioritize benefits targeted to those who need them most, job creation to ensure a job to all who want one, and a livable income for all who work full-time.

 

UBI and Disability benefits

Disabled people have been disproportionately hit by austerity measures and welfare reforms through a deliberate agenda to cut back the various different inter-related social security payments and public services that we depend upon . The situation is so serious that the UN disability committee found the threshold has been met for evidence of “grave and systematic violations” of disabled people’s rights . Nevertheless, and despite overwhelming evidence to the contrary, the Tories publicly maintain they are continuing to support “those most in need”. The suffering and avoidable harm that disabled people have gone through over the past eight years demonstrate the devastating impacts that an overhaul of the welfare system can cause unless the interests of the poorest and disabled members of society are properly understood and protected. Into this context, the introduction of UBI, replacing a targeted system with universal coverage, is likely to entrench growing inequality and the struggle to survive.

Simulations for “full” UBI schemes that would entirely replace the existing social security system in Britain show big losses for disabled people among other groups. This was the conclusion drawn from a series of simulations undertaken for the think-tank Compass . The three full UBI schemes that were examined were simulated on the basis of abolishing all means-tested benefits including Employment and Support Allowance (ESA), also the Severe Disablement Premium and Discretionary Housing Payments with only means-tested Housing Benefit and Council Tax Support retained. Although all three schemes also retained Disability Living Allowance (DLA) and Carer’s Allowance as additional to a universal payment, the proposed rate for the UBI of £73.10 per week, equivalent to Job-Seekers Allowance (JSA) would be insufficient to compensate people who are out of work long term. JSA is set at a level only able to offer adequate social protection for short periods of time. Disabled people are more likely to be out of work for much longer periods: 10% of unemployed disabled people have been out of work for 5 years or more, compared with just 3 per cent of the non-disabled population, and people in the ESA WRAG are likely to spend around two years out of work.

Disabled people would not be the only losers. The Compass paper concludes that the three full UBI schemes simulated are not feasible due to severe negative impacts on the poorest households. The proportion of households losing more than a fifth of their income in the bottom decile stands at 18.2%, 16.7% and 23.0% respectively for the three schemes. Although there are no separate figures for the impact of poverty on disabled people, all the schemes lead to sharp rises in relative child poverty alongside modest increases in working-age adult poverty and increases in pensioner poverty.

Instead, Compass, who are in favour of UBI, recommend that pilots should be undertaken into modified (or “partial”) UBI schemes where the existing benefits system is retained, both means tested and non-means tested, in addition to a UBI. For the two modified schemes simulated, the number of households losing income in the lowest two income deciles is considerably lower than for their full UBI models, but does still entail negative financial impacts for 2,376,300 households under Scheme 1 and 1,335,000 for Scheme 2. This is a significant number of the poorest people in society. There is also no information about whether ESA would continue at the newly lowered rate for those in Work related Activity Group, a move that was met with widespread opposition, or whether it would be restored to its previous level.

Given findings such as these, prominent supporters of UBI such as the Citizen’s Income Trust now recommend a partial UBI where disability benefits and housing are retained as separate parallel systems. 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.” Given the scale of problems with the existing disability benefits system and the proven harm they are causing to disabled people, it is concerning to see the issue of disability benefits side-lined in this way and confirms that UBI offers nothing by way of a solution to the way the social security system is currently failing disabled people.

The implementation of UBI risks detracting attention and resources from the urgent task required to overhaul the disability benefits system and make it fit for purpose. The current assessment regime has been designed to push disabled people off essential benefits and there are high levels of inaccuracy and unacceptable standards in assessments reports leading to thousands of disabled people being wrongly found fit for work. From October 2013 – March 2017, 60% of ESA decisions (32,000) taken to appeal were over-turned. This is in addition to 12% of decisions (31,000) revised at Mandatory Reconsideration stage . The introduction of a partial UBI scheme alongside a parallel system of disability benefits could instead create further problems and pressures to tighten eligibility even further in order to afford both systems. Donald Hirsch in his paper for the Joseph Rowntree Foundations warns of “potentially greater stigma… and perhaps even a political pressure to lower the safety net to the citizen’s income level.” 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 .

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 increasingly desperate with disabled people routinely denied access to the toilet and to food and water for hours at a time. Meanwhile local authorities are adopting increasingly harsh charging policies that are pushing disabled people out of the social care system altogether due to unaffordability. Disabled campaigners are calling not only for a reversal to social care cuts, but for the introduction of a national independent living support scheme funded from general taxation and free at the point of need which would compete with a UBI for additional government spending. Many of the public finance options currently being considered as ways to address the funding crisis in social care have also been put forward as ways to fund a UBI. 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.

 

The illusion of a progressive UBI

UBI has been credited with the power to achieve radical social and economic impacts such as ending the idea that human worth is tied to a person’s ability to labour and produce profit and freeing humanity to unleash our creative potential. The emancipatory potential of UBI to provide equality and freedom can only be realised by a basic income paid at a sufficiently generous rate to make wage work unnecessary for financial survival. In this instance workers would effectively have at our disposal an unlimited strike fund and the balance of power would be in our hands. Under these conditions, with the freedom to organise society and distribute resources in the interests of the many not the few, it has to be asked whether we would then need a UBI. Meanwhile, until we win a socialist society, and under the current politico-economic conditions of a Long Depression under pro-capitalist governments, it is more likely that models of UBI will be adopted that make savings, and cut public services. A basic income approach also leaves the fundamental inequalities and power structures of society unchecked. As an approach to the changing nature of work it facilitates greater job insecurity and wage reductions.

Mitigating the impacts of automation

The future of work and replacement of jobs with machines is a very current concern that proponents of UBI believe it can address. In December 2017 the IPPR think-tank warned 44% of jobs in the UK economy could feasibly be automated over the next 10 or 20 years, equating to more than 13.7 million people who together earn about £290bn . This follows a study by the Bank of England in 2015 which estimated that 15 million jobs are at risk with administrative, clerical and production tasks were most at threat . Advances in technology would improve productivity growth after years of stagnation since the financial crisis in 2008 . The Government argues that this will lead to wage rises for workers, but this will be of little consolation to those whose jobs are replaced.

Rising automation will result in higher profits for those who own companies at the expense of workers’ jobs. As the UK government is urged to address the sharp growth in inequality that this would cause, there are calls for redistribution of profits from automation through a UBI to ensure that the many rather than the few benefit from technological advances. Jeremy Corbyn used his party conference speech in September 2017 to suggest a Labour government would use the tax system to ensure that the benefits of automation are widely shared across the economy. This idea was quickly dubbed the “robot tax”.

The fundamental issue with automation is not the need to replace income for workless humans but the question of the ownership of the technology itself, from which the call for UBI serves as a distraction operating in the interests of the current owners of technology. It is no wonder then that tech entrepreneurs including Mark Zuckerberg (net worth $64.1 billion), Elon Musk (net worth $20.8 billion) and Richard Branson (net worth $5.1 billion) have united in calling for a guaranteed basic income. This has been described by one commentator as “a mechanism to continue to exploit desperate workers earning subsistence wages and whom they can hire and fire at will” . It is also an attempt to guarantee buyers for their products after people have been put out of work by their technologies. While these billionaires profess to care for the less fortunate, they remain against workers’ rights and a living wage.

A basic income only addresses the question of distribution, while ignoring that of production and would not confront the labour market inequalities that would arise from a more automated labour market. It is through common ownership of technology, as opposed to redistribution of profit, that it would be possible to go further, extending free services such as a national health service, education and independent living support while enabling people to work for fewer hours.

The actual level of threat posed to jobs by automation is debatable with the 2019 WDR stating its finding ”that the threat to jobs from technology is exaggerated” , but the problems of worsening working conditions are very real and very now . This is a particular concern for disabled people who are more likely to be in low paid work to start with. Demands for a living wage and workers’ rights need to be at the forefront of what we continue to fight for.

Insecure jobs

One of the arguments put forward in support of UBI is that it is a better fit with current trends in employment than the existing social security system. As a “solution”, this approach seeks to effectively subsidise business, supporting trends towards payment of low wages and lack of job security using public finance to facilitate increased private profit-making and with the potential to further depress wages. This is exactly the proposal put forward by the World Bank who propose UBI as a way of using social assistance to “relax pressure” on “setting the minimum wage and replace “severance pay” , reducing the burdens on employers and enabling labour markets to be “more flexible to facilitate work transitions” . Their response to what they describe as “the changes reshaping work today [that] are fundamental and long-term” is to facilitate greater insecurity and lower wages.

The problem of insecure, low paid work is a very real one. In 2014, the Office for National Statistics (ONS) estimated that 1.8 million workers were on contracts that ‘do not guarantee a minimum number of hours’. A 2016 survey found 11% of the population aged 16–75 (the equivalent of nearly 5 million people) working for online platforms, paid by the task. Figures also indicate that a significant percentage of those in self-employment are not earning enough to make a living.

Disabled people engaged in mandatory work related activity are all too familiar with pressure from the DWP pushing them towards self-employment and insecure work in order to move off out of work benefits. A publication by the right-wing think-tank Reform argues that disabled people are missing out through lack of access to employment in the gig economy and that this could solve the poor job outcomes of long-term Employment and Support Allowance claimants. The drive to push disabled people into unsuitable work and self-employment is deeply concerning. Many aspects of the gig economy make it inaccessible and inappropriate for disabled people who may face barriers to online technology or negotiating contracts and who need a guaranteed income through periods of sickness and disability related absence. The British Psychological Society’s response to the government’s “Improving Lives” green paper consultation warned of the negative impacts of unsuitable work in exacerbating existing mental health conditions .

The idea that UBI rather than greater employment regulations are the answer is problematic. Whereas supporters of UBI commonly cite its transformative potential as one of its major advantages, it is being put forward by the World Banks as a way to maintain and facilitate inequality and insecurity. The basic income demand is, as argued by the economist Michael Roberts, just too basic and not radical enough . It accepts current conditions without challenging them, and under socialism would be redundant. As a reform for labour, it is not as good as the demand for a job for all who need it at a living wage; or reducing the working week while maintaining wages; or providing decent pensions; or making full reasonable adjustments for disabled workers including guaranteeing sick pay and disability leave. These are demands that we need to be putting loudly here and now alongside calling for full and unconditional support for those unable to work.

 

Conclusion

UBI is not the demand we should be making if we want an end to the suffering that welfare reform is causing. We urgently need the abolition of sanctions and conditionality, of benefit assessments designed to deny disability and Universal Credit. The social security system is now one that is intended to create an intolerable environment for benefit claimants. The social security system of the future must be one capable of providing adequate social protection and standard of living for all in need of safety net support. Achieving such a radical transformation is no small task, requiring wholesale scrapping of existing systems and a fundamental redesign. Given the history of disabled people’s exclusion and the marginalisation of our issues it is reasonable for disabled people to fear that attention and resources dedicated to the task of implementing a UBI will be at the expense of effecting the level of change needed to ensure disabled people receive adequate support.

Proponents of UBI tell us that disabled people would not be worse off under UBI but there is a dearth of evidence to support this claim. On the contrary, simulations for the introduction of a UBI to the UK indicate that the only way to ensure this would be through a partial UBI system run in parallel to a continuation of disability benefits. Supporters for such a system are then silent on the detail of how this separate system would work for disabled people, how it would address the many and considerable failings of the current system and how it would be afforded. A recent paper from the University of Bath 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 author concludes: “The unavoidable reality is that such schemes either have unacceptable distributional consequences or they simply cost too much.”

Financing even a modest UBI set at a Guaranteed Minimum Income level in the UK would require high tax rises, as demonstrated by an OECD study . The World Bank report, which promotes the idea of UBI as an international response to the changing nature of work, concludes that when it comes to the UK, “taxing cash benefits and eliminating tax allowances is not enough to cover for the UBI” . This is because the level at which current benefits are paid is so far below a Guaranteed Minimum Income level that it would require the raising of significant additional funds to afford. In the UK a monthly BI amount that would cost the same as existing benefits and tax free allowances would pay £230 yet the poverty line for a single person is £702. The fact that benefit levels in Britain are so far below the poverty line point back to issues with the current social security system that need urgently addressing.

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 the damage that the Tories have done to current systems. For example measures such as restoring the Independent Living Fund, scrapping conditionality and sanctions, and re-establishing the principle of universal benefits payed for by progressive taxation where the rich pay a greater proportion

The distributional impacts of a UBI mean that there are winners and losers with the poorest households featuring as losers under certain models and simulations . This 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. Maintaining this unity is essential if we are to bring about society that is structured in the interests of the mass of ordinary people before the pursuit of profit by a tiny minority.

Britain is currently 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, not opening the door to policies that will be used to maintain existing power inequalities, facilitate greater job insecurity and low wages and risk further public service cuts.

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