Why universal basic income could be poverty’s answer – Stewart Lansley

ONE of the side-effects of the Covid-19 crisis has been a surge of interest in the idea of universal basic income.
Would an universal basic income help to alleviate poverty?Would an universal basic income help to alleviate poverty?
Would an universal basic income help to alleviate poverty?

The pandemic has fully exposed the flaws of the existing benefit system, and triggered an important debate on how to build a robust system of income support for today’s more fragile and turbulent times.

A universal basic income (essentially an income floor) is a guaranteed, no questions asked payment made to all eligible residents.

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The intention of the post-war Beveridge plan was to construct just 
such a floor through a mix of 
measures: national insurance, family allowances, full employment and national assistance.

Should there be an universal basic income? Economist Stewart Lansley makes the case.Should there be an universal basic income? Economist Stewart Lansley makes the case.
Should there be an universal basic income? Economist Stewart Lansley makes the case.

In the event, the plan was never fully implemented, while the principle of universalism has been greatly weakened over time by increasing reliance on a complex and intrusive system of means-testing.

Britain has never come close to creating a robust income floor, and even before the pandemic, millions fell through what is an imperfect, mean and patchy system.

Work-related conditionality requirements, enforced through a punitive system of sanctions – five million have been issued since 2012 – have been greatly tightened.

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With poverty rates at near-record post-war levels, the system also fails the key test of a robust defence against poverty.

While critics of an income floor have dismissed it as utopian and unworkable, the progressive thank-tank Compass has shown that constructing a floor below the existing benefit system would be feasible and affordable.

Starting rates of £60 for working-age adults (under 65) and £40 for children would pay a significant, no questions asked, £10,400 a year for a family of four, while these levels could be raised over time.

This scheme would, for the first time, create an ‘income Plimsoll Line’, boost the incomes of the poorest families, cut poverty levels, reduce inequality, strengthen universalism and cut means-testing.

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Implementing a scheme would need a series of tax adjustments to pay for the floor, while making the tax system more progressive.

Such a reform would build an automatic anti-poverty force into the existing system and boost security in an increasingly fragile world.

It would mean, for the first time, 
a modest income for the small army 
of carers and volunteers, mostly 
women.

As the coronavirus epidemic has revealed, their contribution – unpaid 
and largely unrecognised is, along 
with that of a parallel army of the low-paid, from cleaners to supermarket workers – crucial to the functioning of society.

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By providing all citizens with much more choice over work, education, training, leisure and caring, it would also lay the foundation for greater personal empowerment and freedom, a springboard for more stable and fulfilling lives.

Such a scheme would also be a powerful new instrument for mitigating, at speed, the economic fallout from external shocks from pandemics to recessions.

If a basic income scheme had been in place at the start of this crisis, it would have provided an automatic mechanism for providing comprehensive income top-ups.

Despite these strengths, the idea divides opinion. There is nothing new about progressive ideas provoking controversy.

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Some of our most cherished institutions, from the National Health Service to the National Minimum Wage, were preceded by years of bitter 
dispute before they were finally implemented.

No government would dare remove these universally popular ideas 
today.

The crisis has sparked new life into an ancient idea. Underpinned by a cross-party parliamentary working group, and this week’s call by several opposition party leaders for a recovery scheme, the idea of a basic income now has political legs.

Developing such a floor would also 
set out a clear vision of the type of
society that should emerge as the crisis subsides.

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Stewart Lansley is the co-author of Basic Income for All: From Desirability to Feasibility, Compass, 2019, and of Breadline Britain, The Rise of Mass Poverty, Oneworld, 2015.

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