Universal Basic Income

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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?

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.

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.