Covid19 makes the case for Universal Basic Income unarguable

Theresa May famously claimed there was no magic money tree in 2018. But Rishi Sunak found it in 2020

Well it’s no surprise that we are once again teetering on the brink of a national lockdown in England, after yet another unnecessary delay which will lead to the death of thousands of people, either directly from Covid or as a result of the pressure on the health system caused by Covid. I do feel increasingly this comes down to the fact that Boris Johnson just wants people to like him (or love him) and that makes it impossible for him to make difficult and unpopular decisions. In that respect he couldn’t be more different from his hero Winston Churchill.

It seems to me that the main reasons we are back here again are because the Test Trace and Isolate system has never properly worked (thanks at least in part to the chummocracy appointment of Dido Harding to lead it) so people who came into contact with those who were infected didn’t find out about it. The other reason I suspect is that those who either were contacted, or knew by other means that they were a contact and therefore could well be either an asymptomatic carrier or indeed had some symptoms, just carried on with their lives and didn’t isolate themselves. I’m not seeking to blame these people.

If you’re the main breadwinner for a household and risk losing your job, or are on a zero hours contract so wouldn’t get paid for the 2 weeks of isolation, would you voluntarily leave your work, especially if you had no or mild symptoms? While some (including myself) have benefited from the furlough, self-employed or other support schemes, many have not. And now that the furlough scheme has ended (ignoring the woefully inadequate proposals currently on the table) millions of people are now at risk of losing their jobs and income. Universal Credit is a very weak and unreliable safety net.

If anything what the current situation means is that more people are likely to be forced to take up multiple different kinds of employment, rushing from one part-time job to the next, with all that implies for spreading the virus around the community.

I must admit to be in two minds about the decision to leave schools, colleges and universities open. As a parent with two children in full-time education of course I want them to be able to continue with their studies, as well as benefiting from all the other aspects of being in school/college. It does seem though that the reason behind this decision is the wrong one. The Government has stuck by its insistence that next year’s GCSEs and A-Level exams must be taken – presumably this is in large part influenced by the fiasco of last Summer and the “Mutant Algorithm”. It’s also driven by the ideology of Michael Gove and Dom Cummings, that exams are the only way to properly assess children’s educational progress. Which is of course nonsense and ideological nonsense at that. If the DfE decided that they could change the way GCSEs and A-Levels were assessed, to incorporate course-work assessment by teachers, that would reduce the pressure on schools to have children there five days a week, with all the attendant risks of new outbreaks occurring in schools, and then being passed back out into the wider community. But that would run counter to their ideological position so we can exclude that possibility.

On balance, I think it probably is the right thing to do to keep the schools colleges and universities open, and accept that some contagion is going to leak out into the community. But if there was an effective test trace and isolate system operating, each time there was an outbreak, isolation would prevent it from turning into a disaster, spreading through hospitals and eventually care homes. Aside from abandoning the disastrous outsourced TTI system in favour of using local health expertise, which seems so obvious and yet hasn’t happened to any great degree, one other radical option presents itself – Universal Basic Income.

The idea of Universal Basic Income isn’t new – it isn’t even particularly radical, but it smells so strongly of socialism that this Government would rather chew its own foot off than consider it. But think about it. Do away with the furlough scheme, the self-employed scheme and all the other schemes which have failed to stem the virus. Forget Universal Credit with all of its hopelessly complicated rules and traps for the unwary. Just pay each individual adult a payment every month into their bank account. Let’s say every adult gets £1000 a month, taxable income (but with no NI liability below the income tax threshold).

This would mean that everyone who needed to isolate could afford to. It would mean that children who go hungry during the holidays when their free school meals aren’t available, could have enough to eat. It would mean that people living on the street in tents would be able to find somewhere to live.

There would be a knock on effect of doing away with the impact of grinding poverty on people’s health, physical and mental. Healthier people fight off viral infections more successfully than unhealthy ones – and covid19 has shown this very clearly, killing those with illnesses of poverty, like diabetes & heart disease. And of course healthier people use fewer health services, saving the NHS and other public health costs.

But this far too expensive, I hear you say and will just encourage people to lounge around at home. Well yes it would cost a lot of money, but then money is disappearing out of the Government’s coffers faster than Nigel Farage’s political party scams come and go.

The Institute for Government estimated that Covid19 would cost £320Bn in the tax year 2020/21 – and that was before the latest lockdown. This money has effectively been created out of this air, or plucked from the Magic Money Tree, if you like.

Let’s say for arguments sake that there are 50M adults in the UK. £1000 a month to each of them would cost £600Bn a year.

State pension payments cost £99Bn a year.

Universal Credit is costing £110Bn this year.

The NHS costs £125Bn a year.

the personal income tax allowance costs £107Bn a year.

Tax breaks on contributions to private pension schemes total about £44Bn a year.

HS2 costs are currently £100Bn and rising.

The Test and Trace fiasco cost £12Bn.

and the entirely unnecessary Sizewell C nuclear power station is projected to cost £20Bn, though you can guarantee it will be far more than that when or if it’s ever completed.

Introducing a UBI would mean that other costs would reduce, such as state pension, universal credit and the personal tax allowance, which would all be replaced.

Taking off the cost of the state pension, UC and the personal tax allowance would leave the additional cost as around £300Bn a year, which is probably about what Covid is going to cost us this year. Reforming things like inheritance tax and capital gains tax, which favour the already wealthy, especially those with unearned wealth, would generate another £50Bn or so savings. And stopping wealth disappearing offshore could generate further savings, perhaps not quite as big but still significant.

The point is it’s not beyond the realms possibility at £1000 a month for every adult.

Would a UBI encourage people to sit around watching daytime TV eating chocolate all day? That’s obviously a Daily Mail style caricature but it’s also a real view among some of the public. I honestly don’t think it would, or rather only a tiny minority would do this.

I do think it would however encourage people to think more about and act to improve their work-life balance, and it would lead to a much higher level of voluntary work.  Volunteers are the lifeblood of communities and volunteering also creates wellbeing both for the volunteers and those being supported by them – and I would include mostly unpaid carers of the elderly, the ill and the less able in this.

A UBI would do more to create stronger communities than any Government-led scheme like Cameron’s failed Big Society ideas or the National Citizen Service, for one very simple reason. It would create time in people’s lives that wasn’t being spent on work, or looking for work, or worrying about not having enough work, or worrying about not being paid enough for the work that is done. It would also free up time for people to spend getting more healthy, whether through exercise or playing sport or doing physical volunteering such as on nature conservation projects.

I also think it would help with young adults looking to move beyond school or college and out into the wider world. Why not give university students a universal basic income, to help fund them through university, instead of saddling them with debt? And for those who don’t want to go to university, a UBI would help support them while they trained via apprenticeships or other training schemes.

Some might argue that the state shouldn’t be just handing money out to everyone, especially the already wealthy and that a UBI should be means tested. But we don’t means test the state pension and we don’t means test child benefit. So why apply a means test to state support between the ages of 18 and 66? If the wealthy don’t want the £1000 a month they can always donate it to charity. Most people in this country are not wealthy. Equally, an easy way to pay for a UBI would be to close down some of the many tax loopholes that the wealthy take advantage of, either to minimise the tax they pay on earnings, or, more usually, to minimise the tax they pay on unearned income.

Reducing tax breaks for the hyper wealthy – on pension payments, on land and other asset ownership, on inheritance, and doing away with offshore tax breaks, could easily raise enough to offset the costs of paying £1000 a month to the very wealthy.

Chancellor of the Exchequer Rishi Sunak has shown that he is prepared to abandon the failed ideology of austerity in the name of supporting society. He’s also been brave enough to create quite radical mechanisms to support the economy during 2020. Will he brave enough to push through Universal Basic Income though, or will it fall beyond his grasp.

About Miles King

UK conservation professional, writing about nature, politics, life. All views are my own and not my employers. I don't write on behalf of anybody else.
This entry was posted in coronavirus, covid19, Uncategorized, Universal Basic Income and tagged , , . Bookmark the permalink.

1 Response to Covid19 makes the case for Universal Basic Income unarguable

  1. Pete Johnstone says:

    Yes, the UBI makes some sense. I wonder though what the unintended consequences such as landlords putting up rents.

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