UBI: the future for social security - or new workhouse nightmare?
UNIVERSAL BASIC INCOME (UBI)
provides a useful contribution to the debate on the future of social security, where it adds support and evidence for the need to end conditionality and punitive approaches to welfare reform. However, this is where its usefulness ends. UBI in the wrong hands could be extremely dangerous. Right wing libertarians such as Charles Murray want to use it to sweep away the welfare state including the NHS while neo-liberal governments see it as a way of forcing unemployed workers into insecure low-paid jobs.
At the end of last year, journalists and think tanks were telling us that UBI is “an idea whose time has come”, with pilots announced across the world from Scotland to Canada. Left wing campaigners in countries where trials are taking place are less enthusiastic. The version of UBI being trialled by Finland’s right wing government has been described as “UBI-as-workhouse nightmare” in an article for Jacobin magazine by Matt Bruenig, Antti Jauhiainen and Joona- Hermanni Mäkinen.
Ontario Coalition Against Poverty (OCAP) issued a statement supported by Canada’s largest public services trade union saying, “The emerging model of basic income reflected in pilot projects and initiatives in a number of countries and jurisdictions is one that would intensify the neo-liberal agenda.” John Clarke from OCAP has written, “The neo-liberal attack is taking up Basic Income as a weapon. We need to fight it instead of laying down a welcome mat.”
The UK has in place a complex and targeted social security system. UBI trials in countries without the same levels of support infrastructure produce positive results. For example the pilots in Madhya Pradesh showed significant benefits for disabled people such as being able to afford food and medical assistance, as well as providing independent income for disabled people so they are not entirely reliant on families, and enabling autonomy. Introducing a UBI in the UK would require that all or some of our present benefits and support systems are replaced, which would be a far more complex undertaking.
The distribution of gains and losses would depend upon the detail of the UBI scheme. One key benefit that UBI would most likely replace is Employment and Support Allowance (ESA), yet the rate of ESA for those in the support group is significantly higher than what is considered a feasible UBI level. This brings the prospect of ‘rough justice’ for those who face the most disadvantages.
Full UBI schemes that are in any way financially feasible result in big losses for disabled people. As a result, supporters of UBI such as the Citizen’s Income Trust now recommend a partial UBI where disability benefits (and housing) are retained as a separate parallel system. In Annie Miller’s 297 page Basic Income Handbook she includes just one page on “The needs of disabled people” (of which half a page is about carers) where she says, “Disability benefits are based on need and are therefore a different system from UBIs… Both housing and disability benefits are very much in need of revision but are beyond the scope of this book.”
Supporters of a partial scheme where disability benefits are retained assure us that no disabled person will be worse off under UBI. We were told the same thing about Universal Credit and that has proved not to be true. The social security system is extremely complex and, without detailed modelling setting out exactly how UBI would sit alongside a system of disability benefits sufficient to meet need, it is difficult to be confident that it could work in this way without losses. A briefing to Nicola Sturgeon by a senior civil servant in Scotland states: “Significant modelling effort would be required to establish levels which did not impact negatively on vulnerable groups.”
Not only would running a UBI in parallel to disability benefit systems be complex, there is also the potential danger of increased stigma against those for whom the UBI is insufficient to meet their needs, and less public will to fund them.
The disability benefits system is not fit for purpose. While proponents of partial UBI schemes propose retaining current disability benefits, disabled people are calling for an urgent overhaul. The concern is about how the long and complex task of introducing a UBI would impact on the considerable task of reforming social security for disabled people. Attempting to manage both at the same time risks mistakes and, as we have seen under welfare reform, the many ‘mistakes’ are the result of deliberate ideological policy - and mistakes cost lives.
Alongside an adequate standard of income, disabled people require other support services in order to enjoy full and equal participation in society. The current crisis in social care is one example of the urgency of the question of how to fund these. We are concerned that the introduction of UBI funded by increases in income tax will reduce the amount available to fund other services that disabled people need.
While many disabled people would be in favour of tax rises to fund welfare provision - particularly corporation tax and a progressive rise in the higher rate of income tax - the use of this for a UBI rather than more traditional forms of disability and unemployment support would mean much of the benefit flowing back to employers rather than to those in most need. In functioning as a wage subsidy UBI would act to significantly reduce employers’ national insurance (NI) contributions. It would be hard to make a case that this is a more progressive solution than simply reversing much of the damage that the Tories have done to current systems.
Replacing large parts of the social security system with a UBI would make some people financially better off and others worse off. Some UBI models actually increase inequality for the poorest households. This is at odds with what the public generally understand as the aims of a social security system. It also has the potential to divide against each other groups of people who are currently united in our opposition to the rich elite who we see as responsible for growing inequality and poverty.
UBI compensates for, while leaving unchallenged, the structures that cause inequality. This is why Silicon Valley is so much in favour of UBI as a way to tackle the problem of job losses through automation, because it ignores the question of ownership of the technology.
Instead, UBI accepts the status quo. By subsidising low wages there is a danger that UBI could encourage employers to further drive down wages and job security. This is a concern to disabled people who are statistically much more likely to be in low-paid work than non-disabled people.
The emancipatory impacts of UBI can only be realised by a level of payment sufficiently high to free us from wage labour. If the conditions were such that we could introduce that, it can be argued that we would then be in a situation where we had arrived at socialism and didn’t need UBI.
Introducing a below poverty-line UBI will do little to improve the material circumstances of those who are most in need, but would require a big upheaval - bearing in mind that millions are already suffering following the enormous shake-up of the social security system introduced since 2010 - while creating a new pattern of winners and losers.
Britain is home to the biggest socialist movement in Europe, where demands for a living wage, for health and social care support services free at the point of need and a social security system that provides an adequate standard of living free from conditionality, are all popular. These are what we need to fight for.
» Ellen Clifford is on the National Steering Committee for Disabled People Against Cuts