Why Now? A Call for Universal Basic Income
by Katie Sperring
As the end of the U.K’s furlough scheme in October draws closer, the Bank of England expects unemployment to nearly double by Christmas. With soaring inequality, exacerbated by the challenges brought by COVID-19, is 2020 the prime year to reconsider the idea of Universal Basic Income (UBI) as our antidote?
Whether it’s Black Lives Matter or Extinction Rebellion protests, the last few months have seen many of our generation protesting against the inequalities that our current government continues to produce. With heightened hunger for change, perhaps calls for UBI are seeming more attractive.
UBI is a simple concept - each adult citizen (18 and over), would be given an unconditional monthly payment by the state, independent of income level or employment status. This money can be spent on anything from food, to rent and other basic necessities. This is because the ‘welfare trap’, that occurs when employment leads to the loss of a benefit payment that makes someone worse off, as is the case with unemployment benefits today, is eliminated.
Inequality has risen since the vicious free-market phase in the 1980s under Margaret Thatcher. To put this in the context of the UK today, the income of the richest 20% of people is over six times the income of the poorest 20%, according to the ONS. Fueled by Tory austerity, many people in the country are unable to afford basic supplies. The devastating effects of these policies are reflected in the dramatic increase in the use of food banks.
Recent months have only made this more salient; the last two weeks of March 2020 saw an 81% increase in demand for food parcels compared to the same period last year. For a country that has access to an abundance of food, the fact that so many still go hungry today is entirely unacceptable. Whilst public efforts from food charities and more recently, England footballer, Marcus Rashford, have sought to provide relief to hunger in the current crises, structural change is needed.
The notion of UBI is often rejected by sceptics on the basis of cost. However, the pandemic has already decimated the government’s efforts at cost-saving, so now is the opportune moment to restructure the welfare state.
The think tank, Compass, estimates that it would cost £28 billion to implement UBI, a sum that’s less than the benefits cuts that the Tories have made through austerity since 2010.
True, UBI would require tax increases for our very richest. However, each increase in the top rate of income tax by just 1% would raise £785 million. So raising the money for a UBI is doable, it’s merely a case of will.
The idea of UBI should not be brushed aside, as trials of such a system that have taken place in the last few years have produced positive results. In Finland, the most ambitious trial, 2,000 unemployed people received unconditional monthly payments of €560 between 2017 and 2018. Basic income recipients felt more confident about their “economic welfare”as well as broadly being “more satisfied with their lives and [experiencing] less mental strain.”
Perhaps appetite for UBI will grow in the next few months and years. Spurred by the economic fallout of the pandemic, Spain implemented the first nation-wide UBI experiment on 15 June. In developing countries, the United Nations Development Programme found that distributing a temporary basic income to 2.7 billion people in 132 countries could help to curb damage caused by the pandemic.
With the impact of COVID-19, end of the furlough scheme in sight and economic recession, our current system which inherently promotes deprivation for far too many, is unfit for purpose. UBI is not a matter of cost, but one of will. Not only that, but surely the time has come for the rich to bear societal burdens and the government to stop foregoing support for the poor to kiss the rich and big corporations.
