Welfare State – How about a basic income for all?

Posted on Friday, August 11, 2017 by Venn GroupNo comments

When William Beveridge introduced the idea of the 'modern' Welfare State post WW2, it was aimed at creating a fairer society, where no one person would be forgotten. Now the popular press would have you believe, that this system has created a nation of work-shy scroungers and spongers. But is this a true and accurate reflection of where government hand-outs have left the UK? Has this system, designed to protect all citizens equally, regardless of background, gender, race, religion and so forth, broken the back of the British workforce?

 

No one system will ever be perfect, and it is unlikely that any of the major political parties will ever form an agreed position on such an idea, anymore than Barcelona and Real Madrid fans will ever be able to unanimously agree on who is the better between Cristiano Ronaldo and Lionel Messi! However, the idea and the need for debate surrounding an alternative welfare system and that of a Universal Basic Income in particular, is, whether one is a supporter or not, coming to the UK!

 

Across the English Channel in mainland Europe, the debate surrounding Universal Basic Income is already raging fiercely. This unique and unprecedented welfare model is currently being trialled in Norway and Finland, has been voted on by national referendum in Switzerland (although comprehensively defeated 77% to 23%) and is currently being debated by separate authorities throughout the Netherlands. The Green Party (UK), in their 2015 election manifesto, proposed the idea of a Universal Basic Income to replace the current Welfare system, and the current Shadow Chancellor, John McDowell, is a well known supporter of the welfare model (McFarlan, 2016).

 

So what would the implementation of a Universal Basic Income in the UK really mean? And what could such a radical overhaul of our welfare system do to our workforce?

 

Essentially, a Universal Basic Income (or Guaranteed Income, as it is often referred to as) would be available to every member of society, regardless of whether they held employment or not. A casual worker on a zero hour contract at Sports Direct for example, would be entitled to the same monthly payment as a CEO of a FTSE 100 company. This regular monthly payment, would replace all other benefit payments. If you like, it would be a consolidation of the numerous government payments that different people can currently receive such as child tax benefits, housing allowance, job seekers allowance etc. Any income earnt outside of your Universal Basic Income would be taxed accordingly. The core ideology of the model is to eradicate inequality and poverty within the current system and provide a fairer playing field for all.

 

The debate surrounding Britain’s welfare system is nothing new. Will Crooks, Labour MP and fierce trade unionist notably remarked in parliament that “here in a country rich beyond description, there are people poor beyond description” (Will Crooks – Labour MP, 1908) whereas Harold Macmillan whilst Prime Minister, famously declared that the welfare system meant the UK had “never had it so good” (1959). Even today, the tug of war of British politics is fiercely contested and often won on core matters such the Welfare System.

 

The current welfare system in Britain is regularly criticised as a complex and overly complicated beast, rife with inequality. Following the EU referendum in the Summer of 2016, be it a ‘hard Brexit’ or ‘soft Brexit’, there is a strong thought that Westminster will now have a moral obligation to retain that power from Brussels and create an applicable welfare model that can provide for all, in a fairer and more comprehensive manner.

 

Supporters of Universal Basic Income argue that such a model would mean a simpler, more effective and more reliable system, free from prejudice and delayed means-tested barriers that result from situational technicalities. It is widely thought to be a realistic model to lift those most impoverished in society out of poverty, which would result in real collective prosperity for a nation.

 

Europe’s well documented and ongoing inability to tackle unemployment is a sure sign that those who cannot gain paid employment, be it due to lack of employment opportunities, their social background or due to wider economic effects out of an individual’s control, can achieve the same sense of individual security that an employed person can achieve. There is an even more apparent factor at force currently, with many developed economies world wide seeing wages earned by workers not rising quickly enough and in line with inflation to boost living standards (Avent, 2016).

 

The benefits of this theoretical model do not stop with eradicating issues of the past and present, but are also looked upon as a way of protecting society from developments of the future. Corporations and humanity itself are constantly innovating to improve automation and technological capabilities. Within ones lifetime, it is now more plausible than ever that a person’s job and therefore their livelihood may well be replaced by a computer or machine that can perform a job more efficiently, at a lower cost and without human error. Whilst we strive to develop these technologies, the argument directly strengthens amongst many that we must all come together to create a safety net for those that will fall victim, regardless if we are the first to fall, or the last.

 

Of course, while there is strong support for the deployment of such an all-encompassing model, there is strong opposition. What would be the effects on the workforce? Would people bother going out to work at all? Would they need to? Or would the nation’s economy simply disappear over night? Concerns and arguments have been raised that there would be an inevitable stagnation of innovation and ambition that would sweep through the nation. What would be the motivation to go out and work if one was guaranteed money at the end of each month? Would this create a plague like pandemic which would see all entitled to such a welfare payment lose all willingness to work? Of course, what about the cost? If people choose not to work, how does a welfare system generate a large enough net income to afford the guaranteed expenditure without bankrupting the very system that is designed to look after the population?

 

Debate surrounding Universal Basic Income has increased significantly over recent years (Garavelli, 2017). Major global economies are now investing millions of pounds a year in research into this model and its viability.

Now having triggered Article 50, does the UK need to pay closer attention to the conversations being had by our counterparts in mainland Europe regarding how best to protect the welfare of our nation?

For those who wish to read more into this matter and follow the development of Basic Income across the world, more information can be found at http://basicincome.org/basic-income/

 

Stuart Dando, Venn Group

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