Is it now time for Universal Basic Income? – Liberal Article
Until recently, the only political party actively campaigning for the introduction of Universal Basic Income (UBI) in the UK was the Green Party. However, as the global pandemic continues to severely impact the economy, the idea has now garnered cross-party support. Over 500 MPs, Lords and local councillors have recently signed a letter addressed to the Chancellor, Rishi Sunak, calling for trial runs of UBI to be implemented across the country.
UBI is not a new idea, despite its radical nature. It was depicted as an implausible and laughable ideal in Thomas More’s socio-political satire, ‘Utopia’, back in 1516. In this utopia, every citizen is provided with “some means of livelihood”. This, in effect, is UBI in its most basic form. It is essentially the idea that every citizen, regardless of income or position, should receive a modest sum of money from the government every year, to spend however they choose.
It is easy to dismiss UBI as an irrational and unrealistic ideal, just as Thomas More did in 1516. However, to me, this seems like an irresponsible mistake.
A previous POI article highlighted alternative options to the furlough scheme, with UBI being considered as the more permanent drastic solution. Whilst it was favoured by both the Liberal and Labour writers at the time, it was suggested that now is not the time to introduce UBI.
In all honesty, I would not have come to the defence of UBI a year ago. However, we are living in unprecedented times. No one can deny that coronavirus has seriously damaged the economy. The OECD has recently reported that the UK is likely to suffer the most economic damage as a result of the global pandemic. Therefore, such drastic circumstances call for a drastic solution.
Moreover, it is important to realise that the consequences of COVID-19 will be here to stay. Levels of unemployment have obviously spiked in recent months, but the Bank of England has suggested that it will peak at around 7.7% during April to June next year. Therefore, the worst is still yet to come.
Arguably we need to stop deluding ourselves that the impacts of coronavirus can be quickly overcome. A more permanent solution is needed. Whilst the furlough scheme has undoubtedly provided some much-needed relief to those who have been struggling, it will not last forever. This means there may be no form of a contingency plan when it is most needed.
It is like putting a plaster over a stab wound; sure, it might help hide the wound, but it does not actually address the seriousness of the issue and enable a healing process. The country deserves a well thought out and effective solution, not a sloppy makeshift response.
UBI also has the added benefit of being permanent. This is unlikely to be our last global pandemic, and this certainly will not be our last economic crisis. Therefore, the introduction of UBI means that the country will suffer far less during the next unprecedented event. It will provide a much-needed subsidy for a great number of people. Even though the richer members of society have the luxury of not needing to rely on UBI, they will help boost the economy when it is most in need.
Some might argue that the introduction of UBI is too much of a risk, especially given the current circumstances. Admittedly, as UBI has never been introduced by a government on a large scale, it lacks compelling evidence.
However, several countries, such as Kenya and Iran, have been daring enough to implement basic income on a smaller, more local scale. So far they have seen encouraging results. The benefits of UBI are both varied and far-reaching. Finland’s two-year trial found that participants not only became happier and less stressed but it also led to a mild increase in employment, particularly for families with children.
Ultimately, UBI has the potential to engender positive social, mental and economic change. And if a small sum of money can have a dramatic impact on the lives of so many who are desperately struggling, then why are we being so tentative towards investing in it and beginning trials?
The UK is definitely not known for its bold initiatives and revolutionary changes. We are a timid country that cowers away from the unknown. But we cannot continue to let fear prevent real and effective change from occurring. So whilst UBI is undeniably a risky move, it is one worth taking.
Therefore, although various aspects of More’s utopia are off the cards, perhaps it is time to start taking UBI seriously. And there is no better time to do so than now.
Written by Guest Liberal Writer, Beccy Reeves
Point of Information
Precarity needs to change – A Labour Response
First of all, while I disagree with some of Beccy’s coronavirus analysis of the economy, I definitely agree that UBI is worth seriously considering. The argument has never appeared stronger.
In an article I wrote for POI this summer, I argued for working time reduction (WTR) as a forward-thinking economic policy to alleviate unemployment; a stimulant for economic recovery and a moral good in and of itself. For me, UBI is another such policy.
Nobel-prize-winning economist Joseph Stiglitz in his book The Cost of Inequality has demonstrated that an unequal poverty-ridden society such as the one in which we live is necessarily less productive than a society in which people are free from the burden of precarity.
Operating on a lower income is, he argues, equivalent to putting the blinkers on. Economically disadvantaged individuals are prevented from operating in their own economic self-interest. This is economically detrimental.
Moreover, UBI not only frees people from economic insecurity thus boosting the economy as a whole, but it is also a moral good in itself.
For some, dignity comes from work, but for me, it comes from employment. Not employment as in a paid job, but employment as in the productive use of your time. UBI is a fantastic way to achieve this.
Written by Junior Labour Writer, Marco Dryburgh
Universal Basic Income is the plaster over a stab wound – A Conservative Response
Even though I partially agree with the sentiment that the current situation calls for more dramatic action, I do not believe that UBI is the right call. What occurred to me whilst reading this article is that there was no economic assessment of what impact UBI would have on our economy, let alone whether it is economically feasible.
First of all, the cost of setting up UBI would shoot through the roof. Even if just to provide every person in poverty in the UK with £12,000 a year, which amounts to 14,000 people including the ones in relative poverty; just calculate it for yourself. It would be a massive strain on the government’s finances.
Because of the costs of UBI, this would potentially replace benefits, which means that a lot of people would LOSE money, instead of getting more. The pandemic will end eventually and UBI will lead to many people being comfortable without work. When shops and bars open up again, one will find the labour force to have shrunk. Thus leading to poor economic growth which is essential post-COVID-19.
UBI would mean that other government spending would be cut. We’ve already seen how this worked with the government deciding to cut foreign aid. Inequality is a natural part of the economy; the more wealthy a country is, the more disparity there will be.
As analysed by Thomas Sowell, a renowned economist, the statistics on disparity do not necessarily cover upward mobility. Many people who start off at a lower end of the scale often move upwards throughout their lifetime. This needs to be remembered when dealing with such subjects as UBI. The current problems are temporary. The economic damage that this would cause would take a long time to make right again.
Written by Junior Conservative Writer, Dinah Kolka