This essay, on the debates about universal basic income and universal basic services, was my Observer column this week. (The column included also a short piece on the Naga Munchetty controversy.) It was published on 29 September 2019, under the headline ‘These radical ideas might seem utopian but at least they fire the imagination’.
Back in May, the shadow chancellor, John McDonnell, suggested that if Labour won the next election it would launch pilot schemes for universal basic income (UBI). The aim of UBI is to provide every citizen with regular unconditional payments to afford ‘basic security’. It might seem an impossibly utopian notion – free cash for all, provided by the state – but it has fired the imagination of growing numbers of thinkers from across the political spectrum.
Last week, at the Labour party conference, McDonnell unveiled his plans for universal provision, not of income but of services. Where UBI provides a regular cash sum to every individual, universal basic services, or UBS, provides universal, free access to services from health to education, from housing to transport. That, too, might seem utopian, but is an idea that, again, has gathered support in recent years.
If there is anything we can all agree on in these fractious times, it is that Britain’s welfare system is broken, as are its public services. How to fix them, though, has seemed as elusive as Brexit. Labour toying with ideas of both UBI and UBS shows how, after a long period when left and right have focused on how better to target the needy, notions of universal provision are now getting a hearing again.
The concept of a universal basic income has a surprisingly wide political reach. Many conservatives and rightwing libertarians, including those high priests of the free market Milton Friedman and Friedrich Hayek, have endorsed the idea. The right views UBI as a cost-cutting exercise, a means of providing citizens with a bare minimum while sweeping away welfare programmes and shrinking the state.
For leftwing thinkers, UBI means something different – the pursuit of social justice. The economist Guy Standing, who wrote a report on UBI for McDonnell, views its merit in ethical as much as in practical terms, a means of ‘citizens sharing in public wealth’. Proponents of UBI point to the many trials across the world, from Alaska to India, as evidence of its feasibility. A study published by Public Services International, a global trade union federation, suggested, however, that most were not actually universal schemes but targeted at low-income groups. The International Labour Office has calculated that the cost of a truly universal basic income scheme, in which the payment level is set at that of the national poverty line, would range from about 25% of GDP in Europe to more than 50% in sub-Saharan Africa.
Standing argues that in Britain a combination of tax rises and the creation of a capital fund would make UBI affordable. Critics respond that, to the contrary, ‘an affordable UBI is inadequate and an adequate UBI is unaffordable’. They argue, too, that giving cash to the well-off is immoral.
There’s an equally fierce debate over universal basic services. Labour’s proposals draw on a seminal 2017 report from University College London, written by Jonathan Portes, Howard Reed and Andrew Percy, which looked at extending the ‘principles of universal access, free at the point of need’ that underlie our health and education systems to four other areas: housing, food, transport and access to TV and the internet. The cost of doing so, it suggested, would be £42bn – about 2.3% of GDP – and could be achieved simply by reducing the personal tax allowance. This would be ‘highly progressive’, increasing real incomes for the poorest and taxes for the richest.
Critics reply that the services proposed, especially housing and food, are not universal, but targeted at the poor. Given that sections of health provision are already means-tested, university students pay tuition fees, there is under-investment in transport infrastructure, and the UCL proposals included neither childcare nor social care, the true cost would be far greater.
Beyond these practical questions lie more fundamental philosophical differences. Many object to the idea of UBI because of its individualism, observing that providing cash to every citizen would increase the power of the market over individuals and further turn services such as health and education into commodities. On the other hand, the provision of universal services seems to its critics a paternalistic, top-down approach that robs the working class and the poor of agency.
The proposals and the criticisms both need to be taken seriously. UBI and UBS are not necessarily mutually exclusive; elements of both can be worked into a coherent social policy. The return of universalist ideas to debates about welfare and service provision is welcome. What we need now is a proper public debate about issues that so far have been in the province of thinktanks and academics. If only that other issue did not suck all the air out of public life.
The image is ‘Begging for change’ by Australian street artist Meek.
UBI would be great for potentially free loading tourists like myself.
I’d love to be able to go to countries in Europe where I can’t really work, because I don’t speak their language, but where you got given enough money to live on – for free.
I definitely would be giving Sweden a try for a couple of years.