[Relevant documents: e-petition 302284, Implement Universal Basic Income to give home & food security through Covid-19, and oral evidence taken before the Petitions Committee on 17 September 2020, Support for individuals and households during Covid-19, HC 754.]
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Ronnie Cowan (Inverclyde) (SNP)
I beg to move,
That this House has considered the introduction of a universal basic income.
I thank the Backbench Business Committee for granting me this opportunity. I regret that this sitting is not fully hybrid and that MPs who are isolating or shielding to protect their health and that of others are in effect barred from taking part. That only increases the pressure on Members to travel when they could work from home and forces those who support us to attend the parliamentary estate, too. It was my first time back on the estate for a wee while and I was delighted to see new signs everywhere saying, “Keep left and keep moving”. I am hoping that that is a new sign from the UK Government.
While writing this speech, I noticed that as soon as I typed in the letters “u” and “n”, my iPad prompted me to select “universal”; when I accepted that, it prompted “basic income”. It appears that my iPad has been paying more attention to me than the UK Government have. It also learns quicker.
Universal basic income is an inclusive scheme that protects and recognises everyone. All adults and children receive a set payment on a regular basis. It is fair. It destigmatises the recipient. People are paid regardless of their circumstances. After all, are all people not created equal?
UBI alleviates poverty and reduces inequality. It strengthens a sense of individual citizenship. It empowers people and facilitates civic partnerships. To quote the UBI Lab Northern Ireland working paper,
“A UBI can be understood to be a right of citizenship—a fair share of the assets we and the generations before us have helped create. It recognises each of our stake, or share, in ‘the commons’ of the earth.”
I find that a truly beautiful concept.
A UBI strengthens social bonds and improves mental health. Nobody would deny that economic instability contributes to poor mental health, yet the current system dangles the threat of sanctions over the heads of recipients, going so far as to drive some to suicide. UBI removes that psychological burden. A UBI will not fund the lifestyle of an MP, but it is a platform on which individuals can add other income without fear of financial repercussions.
The current system ties work to welfare. It can make the transition into work more complex. People should be free to take on part-time or occasional work without strings attached. A UBI affords more flexibility to employee and employer, while acknowledging that employees are empowered and less likely to be exploited. It is permanent. It gives security and peace of mind. It cannot be withdrawn or become conditional, unlike the pensions of hundreds of thousands of WASPI women—Women Against State Pension Inequality—who were cheated out of their pensions by the UK Government. That permanency stimulates entrepreneurship, which can lead to the generation of jobs. It is the poorest in society who will directly benefit most; as we know, they are more likely to spend their money on essential items in their own community, which in turn stimulates local growth.
Is my hon. Friend as concerned as I am that at the height of lockdown, although the herculean efforts of the DWP staff ensured that people got paid, many people were getting about £60 a month taken off them owing to advance repayments?
Ronnie Cowan
That goes back to my original point: that I do not believe universal credit is the solution we are looking for. It has been patched and amended, but when it is put under pressure and there are changes in circumstances, the system is not fleet of foot and able to cope with people’s day-to-day living.
During the Petitions Committee sitting, the Minister turned to the issue of the impact of UBI. He had the temerity to say:
“this is the fundamental case against UBI.”
It was not the cost or the delivery, but the impact of UBI that he did not like. He stated:
“Unlike our UC system, UBI does not target support at those in greater need”.
Finally, he got it right. We do not need to target it—everybody gets it, with no stigma attached. He went on to say that UBI does not
“take into account additional costs faced by many individuals, such as those with a disability or those with childcare responsibilities.”
If he reads the pilot project’s proposals, he will see that they do take those into account.
Then, in sheer desperation, the Minister went for an old chestnut. To put it into perspective, Chair, UBI would be paid to you, me and all Members of this House. Yes it would—and it would be taken back in tax, thank you very much. In attempting to vindicate the current system, the Minister, without a hint of irony, said in his conclusions that the UK Government were
“providing millions to food charities to help get through to those who are struggling”.
Yet if people had UBI, they would not rely on charity from this one nation conservatism-driven Government. People do not want handouts—they do not want charity or the crumbs from the top table. They deserve a platform on which they can build and that allows them to sit at the top table as equals, not to be beholden to their rich benefactors. For the benefit of all four nations in the United Kingdom, will the Minister please support the plans for UBI pilots and allow us to move forward with a progressive welfare system that is practical, compassionate and fit for this century?
It is a pleasure to serve under your chairmanship, Mr Davies. I thank the hon. Member for Inverclyde (Ronnie Cowan) for such an impressive and informative speech about what UBI could bring to this country.
I say to the Minister that I stand here making this speech today as a convert to UBI. Two years ago, as the DWP spokesperson at our party conference, I was not in favour of UBI: I did not think that we should dismantle what we have at the moment and considered that we had enough problems with universal credit without going back to scratch. However, that was before I had heard the word “coronavirus” and seen the impact it was going to have on this country. That was before we arrived at a situation where 4.5 million people in the UK were living in poverty.
Coronavirus has changed everything. It has changed everything in much the same way—this metaphor has been used a lot—as the second world war changed everything for this society. When Beveridge put together his report in 1942, a lot of people said that it simply could not work, that it was not sensible and that the country could not afford it. What on earth was he thinking about? And yet, immediately post-war, the Labour Government set about putting that Beveridge report into action. What I say today is that what this country needs now is that kind of vision, and that kind of willingness to take on a challenge and to change society for the better for the next generation. It is not an opportunity that we asked for; it has come in the form of a challenge—probably the biggest challenge that any of us will face in our lifetimes. But we also have to see it as an opportunity to make progress.
Why UBI? The reason I became a convert, frankly, has been the number of phone calls and the number of people who have come to me since March this year—every day, every phone call, every person who thought they were financially secure, every person who spent decades building up a company, every person who was self-employed but now finds that they are without the support they need for the future: all that has convinced me that the only way to tackle the issue fully and to make sure that everyone gets the support they need is through a universal basic income.
It is a pleasure to serve under you as Chair, Mr Davies. I start by saying to both contributors so far that I wholeheartedly agree with the thesis that they set out while also highlighting the practical realities of what a universal basic income could bring.
We live in such an inequitable society—the second most inequitable society that there is. We have 4.5 million people living in poverty today, in one of the richest countries. We know that many have made their millions out of this crisis, but millions have fallen into very stark circumstances. We have heard about the 3.1 million people who have been excluded from any support whatsoever and are desperate at this time.
The unemployment rate in my constituency last year was 2.8%; next year it will be 27%. This is terrifying—one in four people losing their jobs because of the nature of our local economy. The 2.8% was an incredible feat, in a post-industrial city where the manufacturing base was wiped out, with the loss of the rail and chocolate manufacturing jobs, but we now face an unprecedented precipice, and we are worried—terrified—at what lies ahead. We have to think outside the box at a time like this. That is why I believe that York, because of the nature of the economy and the way our city works, would make an ideal pilot for a UBI, or citizen’s wage, as many call it.
We also know that, at the end of this month, many people on furlough today will fall over tomorrow. The reality is that, while wages are currently at 80%, they will drop in areas of high lockdown to 67% and in many areas to nothing. That will mean a longer and longer queue at the jobcentre—none of us wants to see that—or people simply struggling. UBI is not just about economic circumstances; it is about holistically supporting individuals, which is why I am also a convert to such a mechanism. It does not judge or call out, but it does protect. At a time like this, we have to look at how we protect society.
The Minister is shaking his head. I talked to my constituents who were offered a loan, to be paid back. I am telling the Minister about cases in my constituency where people waited that length of time to get their hands on any money. They were absolutely desperate and needed to use the food bank. Why are we doing this to people when we have other tools that we can utilise?
That is why I believe that universal basic income will bring the universality, the collective responsibility of society, and the solidarity to see people through this time. I argued for it at the start of the pandemic, seeing what was ahead. I believe ever more strongly that, as poverty encroaches, we must find proper solutions. At the moment many people are struggling to pay heating bills. A constituent came to me about that this week. People cannot afford to feed their families. Often it is the women in the family—the mothers—who do without to make sure their kids get what they need. It is tough. My city is like many other places in facing that.
One of the benefits of universal basic income comes from the fact that at the moment people are in and out of work, sometimes because they must isolate, and sometimes because of the pace of fluctuations in work. People who are self-employed try to get started or to do more work and then, with levels fluctuating, they fall back. Perhaps they have access to workplaces, or perhaps not. If there was a steady income for the self-employed, what a difference it would make to entrepreneurs who want to start a business but need time to build it up and to build a custom base. That would give them the underpinning they need to grow.
As for people on statutory sick pay—as well as those who do not get it—universal basic income would provide more of an underpinning while people have to move in and out of the economy. People on zero-hours contracts get paid—and then they do not get paid. They do not know, from week to week. Universal credit, whatever the Minister will say, is not agile enough to respond to the real economy that people work in. That would not be the case with a universal basic income. Also, people entering training and skills development may move in and out of it, perhaps with different hours at different times. They may or may not be on full-time courses. Universal basic income provides underpinning and does not discriminate. It does not call out disabled people, those who are shielding, or anyone else. It does not judge in that way, but understands. We need a system that understands people.
Yesterday the Prime Minister responded to me when I asked what someone on minimum wage, who will have a third of their wage cut, should do. He said, “Oh, that’s the point of universal credit,” in the way that he does. I think he was getting confused with universal basic income. That would be the point of a universal basic income—so that as wages fluctuated down or there were particular problems, there was an automatism; so that there was always a basic floor and an income stream that people could rely on.
The reality, as we know with universal credit, is that there is an application system that is particularly difficult, and the work component has been re-imposed on universal credit in this country since lockdown. It is not just a payment made to support people unconditionally, and we know that the stress of the waiting period causes huge anguish for many of our communities. People do not see universal credit, or jobseeker’s allowance, or the dole—or whatever name it is given—as something that is their right or that they deserve. They see it as something that they are being judged on to get, and many proud people leave it until it is too late. They leave it, thinking, “I will use my savings; I will do the good thing for society and not go immediately and ask for support.” That means that by the time they are knocking on the jobcentre door, they might have already used up what little resources they had—resources that the Government expect them to live on while they are waiting for an application. How could we avoid a system that is degrading, causes mental health problems and causes people to rely on food banks? Surely we should explore some sort of system of universal basic income. It would, after all, do exactly what the Prime Minister promised; it would actually fulfil that pledge.
Universal basic income is not a replacement for universal basic services. We need the NHS, we probably need a separate way of dealing with housing, we need lifelong learning—we need those things to go along with it. However, it is a liberating factor for those things that the Government really should not be providing. My view is that the Government should not be providing food parcels—neither the Government nor charities. Charities do it in large part. In Brighton, most of those charities are also supported by the local council through cash amounts for them to go to the cash and carry. That is not dignified. It is not dignified that people have to go and get a bag of pre-sorted goods to live on that week. I do not think that is acceptable. That is where a cash transfer is important, because cash has a liberating element in those circumstances. It has a dignifying element in those circumstances, because when a person walks into the supermarket, they are able, on a par with everyone, to engage and purchase the things they may like.
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Inverclyde (Ronnie Cowan)—a fellow Greenockian, as he acknowledged—on securing this important debate.
I agree that the pandemic has made the case for UBI ever more urgent. At the outset of the pandemic, I and others welcomed the Government’s financial support schemes and, I admit, generally accepted that existing HMRC mechanisms were the most efficient way of getting support out quickly and effectively to employers and employees. However, time has passed, and we now need to recognise that millions of people missed out on any support and continue to do so. Many constituents have been in touch—I am sure the same is true of other Members present—to say that they had missed out on support either because they were employed a day after the furlough cut-off or because their old employer would not re-hire them. Others missed out on the self-employment income scheme because they were not able to jump through the Treasury’s hoops. They were, therefore, unable to access the support they desperately needed.
We have all heard these stories, which is why many of us are members of the all-party parliamentary group on gaps in support, ably chaired by my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone). It is impossible to listen to these stories without feeling a huge amount of empathy towards these people, who have faced an incredibly difficult year and now find further months of restrictions looming. Some 3 million people were excluded, in some cases on an entirely arbitrary basis. Despite the campaigning of many, the Government consciously continued to exclude those people—if they got no support at the start, they are still not getting any now.
Other Members have referred to members of our society who are sadly all too familiar with the challenges involved in engaging with our welfare system. However, without access to the current support schemes, many who thought they would never have to do so have engaged with DWP and universal credit support for the first time. DWP staff have worked incredibly hard at this challenging time. I commend them for that, and acknowledge that, as a Member, I have had direct support from them. I also acknowledge that the Government have temporarily increased the universal credit standard allowance for 2021 and relaxed the minimum income floor for the duration of the crisis. However, that demonstrates that every support mechanism currently available has eligibility conditions, and it is therefore inevitable that people will miss out. That is often why they contact us, as their Members of Parliament, and it is why UBI is such a powerful idea: there are no hoops to jump through and no complicated terms and conditions that exclude people. There is no sense of arbitrariness.
It is a pleasure to participate in this debate. I thank the hon. Member for Inverclyde (Ronnie Cowan) for setting the scene and I am pleased to make a contribution. I am also pleased to see the Minister. I believe he will do his best to respond to what we are asking for.
As others have said, covid-19 has been with us over the past few months. I recollect many conversations with constituents about these matters back in March. Never at any point did I honestly think we would end up where we are now, with these restrictions in place. Even as we were fast hurtling towards the changes, I never envisaged us being here.
I thank the Government, Ministers, the Chancellor and everyone who has been forthright and helpful. Others have done so, but I would also like to put it on the record, as it is important to include it in Hansard. Many of my constituents in Strangford have survived until now because of the Government’s commitment and help. To be honest, those people would not be there without that, so I put on the record my thanks to the Minister.
As elected representatives, the nature of our job means that people do not necessarily come to us to tell us how good things are or to say thank you, although many do and we appreciate that. People come to us because they have concerns and worries. Some have come to me—others have referred to this—because they fell outside the scheme.
Even with all the schemes that the Government have brought forward, it is clear that people have missed out, including the 3 million people referred to in a question to the Prime Minister during his statement on covid-19 yesterday, as well as the self-employed and directors. I do not want to labour the point, but they invested their profits and income back into their family businesses, thereby employing 12, 15 or even 20 people. But when it came to helping them, the help was not there.
Ronnie Cowan
I should perhaps have said this earlier. One complaint about basic income is that it makes people indolent because people are paid for doing nothing. I refer the Minister to all the pilots that have been run throughout the world, which show that there is absolutely no evidence for that whatsoever. People the world over are just like us: they want the opportunity to work and earn a wage. Basic income does not make people indolent.
I wholeheartedly agree. I was sympathetic to the really good question that the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) asked the Prime Minister yesterday in the Chamber. I am not saying that because he is sitting across from me; I told him it was a good question at the time. It was about the minimum wage. I understand how it works. There are arguments to reduce the working week to four days and to reduce wages, but if someone on a minimum wage loses wages, they have nowhere to go. This is about every penny they have.
I remember the stories that people in my constituency have told me. They managed everything almost to the last pound for that week. Even a small reduction in what they have will mean that they will not be able to pay their rent or their car off. They may be paying off furniture for their property, too. The whole thing becomes a real difficulty. If somebody takes ill, it becomes a real problem. The hon. Gentleman’s question was pertinent, because I could relate personally to what he was saying. I thank him for that.
In opening the debate, the hon. Member for Inverclyde referred to other schemes. I read in the briefing about the Finnish experiment. It is not all about money. I am conscious of time, so I will come to my conclusion fairly quickly. Those who participated in the Finnish experiment
“were more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness. They also had a more positive perception of their cognitive abilities, i.e. memory…and ability to concentrate.”
Giving people that help improves their quality of life, physically and mentally. We have to look at that, because there is cost otherwise. If the Government or others are not able to help, there are impacts on people’s physical and mental health, which then has to be paid for by the NHS. I suggest that although the Finnish experiment may not be the best example, it did highlight that issue.
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Prior to covid, the upsurge in interest in UBI was attributed to the gig economy, the increase in automation and the creation of a greater number of people described by Guy Standing as “the precariat”. Covid has accelerated the increase in the numbers of the precariat. Many people who once felt safe now feel vulnerable.
It is the duty of any good Government to protect their citizens—not just in the short term, not just by reacting to unfolding circumstances, but by planning for the long term, for future generations. To that end, pilot projects have already been run in Canada, the USA, Kenya, Brazil, Finland, India, Italy, Uganda and Namibia. Versions of cash transfer projects have been run in Iran, Lebanon, Kuwait, Zambia and Zimbabwe. There are plans for UBI-type schemes in Spain, Switzerland, Germany and Ukraine. I have a simple ask of the Minister: have the UK Government taken any steps to learn anything from any of those countries? And please do not quote the Finnish Finance Minister, who came out against UBI before the results of the Finnish trial were even published.
If the UK Government think it is beneath them to be advised by foreigners, will they back pilot projects in the UK and learn from them? Northern Ireland is asking, Wales is asking, Scotland is asking and England is asking. If ever there was a policy that could be pursued and that would be welcomed across the United Kingdom, UBI is it.
The four pilots proposed in Scotland are all well documented—all we need is the co-operation of the Department for Work and Pensions and Her Majesty’s Revenue and Customs. Those pilots will help us not only to learn about the economics of UBI but to understand the political, strategic, institutional, psychological and ethical feasibility of a UBI.
When we exposed the UK to universal credit, it was plain to see that it had not been thought through fully, and it failed miserably. Ever since then, we have been patching and amending the system. If we had run pilots for universal credit, we would have avoided many of the pitfalls and saved many people from the suffering that it caused.
I claim that UBI reduces crime, gives people more opportunity, improves health and mental wellbeing, improves community relations and contributes to a stronger local economy. Minister, run these pilots across the UK and prove me wrong. I know that the Minister is not a fan of UBI: he will claim that the cost makes it a non-starter. Why even consider it, if we cannot afford it? Why run pilots that might tell us that it is amazing, even magnificent, if we cannot then implement UBI? Well, Minister, let us run the pilots, learn what benefits UBI brings or does not bring, and then we can argue about cost versus outcome. If the Minister is seriously telling me that even if all the benefits of UBI that I am claiming can be proved, he would not move mountains to provide them for the citizens of the United Kingdom, then he is skating on very thin ice.
The NHS did not just materialise out of thin air; it was not dreamt up one wet Wednesday afternoon in the Tea Room or designed on the back of a fag packet. The NHS was introduced on 5 July 1948, but prior to that half of Scotland’s land mass had already been covered by the Highlands and Islands Medical Service, which had been set up in 1913. HIMS acted as a working blueprint for the NHS in Scotland. It was directly funded by the state and it had Ministers centrally in a Scottish Office in Edinburgh. It was a pilot project allowed to develop and grow; it uncovered unforeseen problems and fixed them. It ensured that, on day one of the NHS, the NHS was to all intents and purposes good to go.
There is an interesting aside about HIMS. One of its administrators was from my constituency, a Gourock-born woman called Muriel Ritson. She was the only woman on the Scottish Board of Health in 1919, but by 1942 she was sitting on the Beveridge commission, which helped to establish the NHS. The link is there for us all to see. She had learned her lessons, and she brought that learning to bear many years later. She also attended the school that the hon. Member for North East Fife (Wendy Chamberlain) and I both attended.
Mary Breckenridge, an American, visited Scotland in 1924 and later established the Frontier Nursing Service in Kentucky, based on the HIMS model. But not everyone saw the benefits of HIMS—just like today with UBI, the Conservatives argued against it. Lord Banbury objected to English taxpayers contributing money that would be of medical benefit to Scotland. Here we are, all these years later, with NHS Scotland and the wider UK NHS acting in true UBI-style and supporting us all through the current health crisis. If we had not had the NHS, it would have been too late for us to create it. It was there for us and UBI could have been there for us, too.
If the Minister is not prepared to follow current examples from around the world, then he should be brave—support the pilot projects and lead the world. Yes, it will cost more; it will cost lots of pounds and lots of pence. However, their value will be far higher than that of our current system, and the society that the spending will support is too precious not to exist. Although I do not doubt for one minute that budgets must be balanced, recent times have taught us that when the motivation exists, the purse strings can be loosened.
I will now review quickly the response of the Minister to UBI in a recent Petitions Committee sitting. He had three objections. First, how do we afford it? The Minister explained that the Centre for Social Justice found that giving every working-age adult in the United Kingdom £10,000 per year would cost in the region of £400 billion. He seems to think it is higher, but I question that figure. His argument was that the average universal credit claim was more generous at £16,000 per year, completely ignoring the fact that the UC figure is per household. A household with two parents and two kids does not need £5K per adult and £3K per kid to meet his generous standards. I have just halved his £400 billion in one stroke.
His next question was: how do we deliver it? The simpler the system, the cheaper the delivery—and UBI is simpler. Even if it costs the same as the existing system, we are still no worse off. He went on to boast:
“My Department and HMRC have done exceptional work throughout the pandemic to stand up new services and increase the capacity of existing ones. We have been able to move quickly to support over 9 million people”.
I offer genuine congratulations. That is a job well done. I know my local DWP and the one jobcentre left in my constituency have been superb, but with UBI there would be no need for that. All payments would already be in place. With UBI, the safety net has already been built. We are not building it as we are falling.
UBI would help the people on whom we rely but we often miss: the carers, the people who are low paid. As the hon. Member for Inverclyde said, there should be no stigma or penalty to taking another job, but at the moment there is. I am thinking of people who have worked long hours to get our food to the supermarket shelves who are not on a huge salary and who could do with some help.
My basic plea to the Minister is this: look at whether we can have a trial, to see whether UBI can work and whether we can have the courage that the Government had immediately after the war. That generation looked to Beveridge and thought, “Here is another way. Here is a way of improving society. Here is a way of making a change, a legacy for future generations.”
We have all gone out on a Thursday night and applauded the NHS, which was part of that bigger vision. We have all, at some point in our lives, looked to the welfare state and thought, “Will it be there to help me?” In this, we have seen that it is not. It was a wonderful vision for the 20th century, but we need something new for the 21st century. We need something that makes sure that nobody falls through the cracks as we have seen in this crisis: the 3 million people who have had no support and who, regardless of the Government schemes we hear about, still have no support, no financial safety net, no way out of this from the Government. UBI could provide that.
At the moment, I would not give the Minister a blueprint and say, “This is the one you must follow” because that would be a mistake. We have to look at how we can do it, how it can be affordable and how we make sure that support gets to the people who need it: as I said, the carers, the stay-at-home parents, the people on a low income. They need our support now more than ever.
Two years ago, perhaps, I did not see it, but now I firmly believe that universal basic income is an idea whose time has come. This time needs something special—it needs us to have the courage that a previous generation had to do something radical and progressive. When people look back at this time 20 to 30 years from now, they could have this as something we tried to do and hopefully succeeded in doing for the future.
The Prime Minister talks about putting his arms around our society, yet we are not seeing the evidence of that. Many of the economic packages that have come out have been narrow, too late and too little. They do not look at the real, longer-term solutions that we need to look at in this crisis. The packages are short term and have not grappled with the real economic challenges of our age. We have to look at what will sustain us, and not just in the next six months or year—we are talking decades of recovery from this pandemic.
We have to inject the right solutions. Therefore, we should not rush, but move on this path to look deeper into this situation. We have seen the benefits where universality has been applied. We have the pension scheme—too low, I would argue, but it is a scheme that does not judge—and child benefit. Such a solution removes the issue of the undeserving poor, a narrative that has often sat with this Government. It does not judge; it recognises the real challenges. Of course, it should also sit alongside a progressive taxation system—something we desperately need which challenges those with broader shoulders and supports those without that resilience.
At a time when we see our high streets about to topple over, businesses folding, our whole local economy in York and our national economy spiralling out of control, and people spiralling down with it, we need that safety net. Universal credit has been a good attempt, but it judges, it sanctions and it has caused harm. People have to wait for weeks before they get any money. At the height of the pandemic, it was not just five weeks, it was eight or nine weeks that people in my constituency waited.
Something that came through to me clearly when we debated the Coronavirus Act 2020 was that there were opportunities to volunteer during the pandemic. We saw that from the British people in an incredible way at the start of the pandemic. No doubt as we get through the winter crisis together—and it is going to be a hard winter—many people will put their hand up and say, “I will help.” Universal basic income would give employers flexibility, because they would know that their staff would be out volunteering, moving in and out of those opportunities, as we pull together as a society to get through this impossible situation. We have to have that solidarity that was built. Flexibility, built into our ability to sustain ourselves through the crisis, would be underpinned by a universal basic income.
That is why I say do not push it off the table. A recovery UBI would help the economy to grow and establish itself again. It is interesting that the Mayor of London and even Andy Burnham, the Mayor of Greater Manchester, have said that we need to look at UBI. That is my ask of the Minister today: that we look at how to build the foundations of a new, fair economy, which does not discriminate and is built on the principle of recognising that everyone wants to put in, but sometimes people need help. UBI is the fairest way to do that. I ask the Minister whether he will set up a UBI commission to look at how UBI can work in different areas, and at the economic challenges of our age and the flexibility needed to grow a new economy, and to report back to the House on that commission to show how we can build a stronger, better economy and a fairer system for the future.
Nor is a universal basic income a substitute for a decent industrial strategy. We need strong trade unions pushing for greater conditions for workers. We need to ensure decent relations between employers and trade unions to make sure we have industrial harmony. We need to make sure that the national minimum wage is being pushed up so that it becomes a real living wage. All those things are needed. However, if we do not deal with the transitions, particularly in a society where we have more transitions and less stability in the job market, we might be helping those fewer and fewer people in full-time and stable work but not enabling people to develop full-time and stable work positively.
I am a universalist. I generally believe that giving things to everyone pushes the quality up, not down, because the pressure is that everyone understands their value. That does not mean that everyone pays in equally. One of the critiques that we hear is that giving all this money to everyone means giving rich people money. I do not know how those people think the pay-as-you-earn system works, but in a person’s payslip for the month they pay x amount of tax—x is given to the Government. If UBI were set at something like £100 a week—I pick that number from the top of my head—that would mean £5,000 a year. Under the current tax system, anyone earning more than £26,000 would be a net contributor. That is an interesting number, because £26,000 is about the average wage in the south-east, although it is slightly higher in Brighton. Actually, that would be very positive, because those earning more would be paying for it. Of course, the tax system would have to be redesigned to make it balance. Those enabling figures are an automatism.
In the ’90s, the Scandinavians developed what was called flexicurity. It was adopted, of course, by the European Union—we can have arguments about our leaving, but that is not why I raise it. I raise it because it was about looking forward and saying that the job market was changing. The Scandinavian countries recognised that they needed a more flexible labour market. Jobs for life were not necessarily going to happen, and were not necessarily desirable. Companies were saying that they needed the ability to be fleet of foot. The pact that was made was that if there was to be a more flexible workforce—the ability to hire and fire more easily—there needed to be greater protections. Some of that was about free lifelong learning. The pillars were a flexible labour market, lifelong learning, labour market policies and a strong trade union-business pact. The final pillar of the European model was a model social security system with adequate minimum support for all.
I know that the Government are slightly allergic to things that come out of Europe, but we should learn from that decent, forward-looking principle of how the labour market needs to look in the future. I do not want creative people to be forced to go into cyber-security, as the latest Government advert suggests, if they want to make ends meet. I want them to be free to develop new creative industries that provide billions of pounds of revenue to our country. If they are not given support to do that in difficult times, there is a danger that we will lose whole sections of our industry. I genuinely think that UBI is an opportunity to put some of that flexicurity model into practice.
UBI will not be perfect—there are problems with all systems—but I believe that it encompasses some of the principles of the failed universal credit system. It encompasses the idea that people can transition. Conditions could be put on it and infrastructure could be put around it, but I am not sure that would be particularly helpful.
UBI also has the ability to rebalance our generational problem. We have the clear problem at the moment that many younger working-age people—people under 30 or even under 40, so not that young in some accounts—feel that they are getting a rum deal. They feel that they will never reach pension age because it will increase on and on. They feel that the state has abandoned them in housing and welfare—under-35s have lower rates in housing, et cetera. They feel almost infantilised by the current system. That generational pact has broken. I think that part of the problem with coronavirus is that a lot of young people are not convinced that there is a generational pact in society, because they do not feel that the state or society has actually bothered to care for their concerns. They feel that huge amounts are given to pensioners. That is not necessarily true—our pension is rather low—but that is the feeling among lots of people.
A universal basic income would of course differentiate between ages. It would be slightly lower for children and would then increase for working-age people and again for pensioners. It would be a continuum, which would rebalance that understanding of a generational pact that everyone gains from. That would really transform our society for the better, which is why I hope the Government will at least explore some real, decent pilot schemes.
We heard yesterday about further restrictions—more restrictions have already been put in place in Scotland—and I am glad that the Government are bringing forward further economic support. However, I am disappointed that, several months on from the initial lockdown, and facing renewed restrictions and a surge in infections and hospital admissions, we are still no clearer on test and trace or on a job support scheme that actually reflects the reality of operating under the current restrictions and the seasonality of work in constituencies such as mine, which relies on tourism. Indeed, it feels like we are back in emergency measures, calling on the Paymaster General to unblock issues and get responses from Government Departments.
Beyond covid, there has been support for UBI pilots. In Fife, the preparatory work has been done; they just need permission to run the pilot scheme. Instead of relying on evidence from elsewhere, let us develop our own evidence base, then we will be best placed to assess whether UBI will work and the income and infrastructure required to deliver it. This work could arguably start quickly, and report quickly as well. This year, many who assumed that the safety net of our welfare system would be there to catch them have found the holes too big. Exploring UBI is a way of addressing those holes and providing a platform for future prosperity and economic recovery.
Why do I look sympathetically on this particular methodology of benefit? It is because universal basic income could be the system to help those who did not receive the income they needed. I am not being critical of the Government, but I want to put that on the record. If we cannot help people, we have to consider different ways of doing things. That is why the hon. Member for Inverclyde has promoted this issue and other Members have supported it.
The experience of my constituency of Strangford is no different from that of the hon. Member for North East Fife (Wendy Chamberlain), who said that tourism is important to her constituency. The core economic driver of Ards and North Down Borough Council, which covers the majority of my constituency, is based on tourism. Tourism is vital because it provides income and jobs, thereby keeping the whole thing going.
I am realistic about the system. I understand that the Government do not have bottomless pockets or a money tree at the bottom of their garden. There is no money at the end of the rainbow, so they have to work practically with the moneys that they have. I do believe, however, that the Minister should at least consider a pilot scheme for universal basic income, so that we can judge and consider it. Can we pay for it? That is important. We have to be realistic and honest. Can we reach out and help those people who have missed out, including in my constituency? Those are the people on whose behalf I am speaking today.
There are some 52 million adults aged 18 or over in the United Kingdom, and 12 million children and young people under 12. I understand the economics, the figures and the statistics that mean that some earners are taxed at a higher rate. My life is no different from that of anybody else, and the same is true of the lives of others in this Chamber. Society is judged by how it looks after those who are less well off. When I was a child—that was a long time ago, by the way—we never had much back in those days. It was a fact. We did not have material possessions, because that was the way it was in those days, but it made me more understanding of those who need help. That is why I am here today, to speak up and to support the hon. Member for Inverclyde.
The Minister is a compassionate person as well. I believe in my heart that he understands very well the policy we are putting forward and why it is so important. Can we do better than universal credit? I felt a wee bit embarrassed sometimes whenever people came to me during the covid-19 crisis and I said, “You can get universal credit.” I knew right away, though, that the guy or lady across the table had a business from which they were earning £300 a week—some were earning more—and I had to tell them, “Look, £94.50 is what you get.”
I understand that the Government offered what they could—I am not criticising that—but there must be a way to ensure that those businesses can hold on long enough so that they can then turn the corner and do better. I am really conscious of the issues. We need conditions when it comes to universal basic income. I understand that some of the naysayers are saying that it could reduce the incentive to work. Well, I tell you this: every person who came to me looking for help wanted to work. They wanted to continue to work and they wanted that opportunity. They just needed that wee bit of help to get them over the line. The Government have, in fairness, responded positively, but I wonder exactly what we need to do.
As I see every day, those who are under financial pressure and who are worried about their future also face mental stress and difficulty. I meet people every day, every week, in my office—my staff do most of that, to be fair—and recently, when universal credit first came in, I remember that there were great problems. The hon. Member for Glasgow South West (Chris Stephens) and I have spoken about these things on a number of occasions, and we understand that.