Coronavirus: independence: Why it's time to bring in a universal basic income

It was a curious stand to take, over the feeding of hungry bairns in the middle of a cavernous recession. Scrooge, it seemed, was back in charge.

But it reflects the re-emergence of a long-standing philosophical divide between left and right, over how far the state should intervene to support people’s incomes. The Prime Minister insisted that no child would go hungry and the only disagreement was over how best to support struggling households.

But Downing Street spokespeople and Tory backbenchers put it more baldly: it wasn’t the job of schools regularly to feed children during holidays. Continuing the policy would only increase dependency on the state.

Should we be paying much attention to old anxieties about the so-called dependency culture any more? Is drawing ongoing support from the state really such a problem? I would say not – and not just because of the current exceptional circumstances. It is simply a necessity in a world where for growing numbers of people, work isn’t plentiful, secure or well paid enough to give them any financial security.

Inequality in Scotland worsened slightly in the 20 years following devolution and the mind-bending economic chaos caused by the pandemic has the capacity to make matters so much worse.

To tackle inequality, we have to do things differently in future. That means giving thought to new approaches like a universal basic income. It will certainly mean accepting the need for ongoing generous benefit payments.

It was all very well worrying about the dependency culture at a time when jobs came with permanent contracts, promotional prospects, sick pay, pensions and the promise of getting on to the housing ladder. Those sorts of jobs give people the means to sustain themselves. But for a growing proportion of people, such jobs are out of reach.

We know the dismal story by now: increasingly, being in work does not guarantee financial security, thanks to the increase in zero hours contracts, the growth of the gig economy, wage stagnation, underemployment, and the rise of self-employment, which leaves people without the protections associated with staff jobs.

As the IPPR Scotland think-tank put it this week, the last decade has seen a significant shift in who carries financial risk in society, as the value of benefits has fallen and at the same time, the rights and protections associated with employment have been steadily eroded.

Even before the pandemic, nearly one third of Scottish households were financially insecure – they lacked the cash to cover basic living costs for three months. By May, mid-first wave, nearly half of families with children in Scotland reported having difficulty making ends meet.

Everyone wants Scotland to emerge from this crisis as a fairer society, but to say that will be hard to achieve, given all this structural unfairness, is an epic understatement. That’s without even considering the government debt accrued in getting through it, which could lead to demands from some quarters for – whisper it – austerity (though by another name, of course, the existing term being as toxic as a vat of rat poison).

That can’t be allowed to happen. We must look at the tax system again so the cost of paying down the debt falls on those who are best able to afford it.

But we must also accept that, to prevent inequality worsening, we need to keep spending on welfare. The IPPR suggests a suite of short-term measures to support those who have been left rainwhipped by this economic tempest, including lifting the two-child limit and benefit cap, and providing a one-off winter clothing grant to families with children.

But in the longer term we have the chance to rethink how we do things, from the bottom up.

One idea is a universal basic income. The principle is that it covers your basic needs, it’s paid to everyone individually and it’s unconditional. It’s simple and there is no disincentive to work because you do not stand to lose any of it when you get a job.

At a time of crisis, people’s basic needs are provided for, without being subject to judgmental bureaucratic decision-making and delays.

It’s obvious how a universal basic income would have helped during the first wave of the pandemic, by giving people who had suddenly had to stop working a continued baseline income. No one would have “fallen through the gaps”.

Now for the small print. It hasn’t been tested in a developed country on a major scale; there’s huge debate over the level it should be set at and how it should interact with benefits; and there’s just as much debate about how it would be paid for. It has the capacity to tackle poverty in theory, but that depends on getting the details right. Any pilot scheme, running alongside the existing benefits system, would be fiendishly complex. For every one of its advocates is an equally passionate detractor, pointing out that the existing benefits system, while in some ways dysfunctional, does try and target help where it is needed and has only recently been reformed.

A study carried out by four Scottish councils looking at the feasibility of piloting a citizens’ basic income in Scotland, concluded in the summer that it was desirable but not possible in current circumstances because of the technical and legislative challenges.

Still, every fundamental state intervention is controversial. Nicola Sturgeon said in April she believed the pandemic had “immeasurably” strengthened the case for a universal basic income and wants to talk to the UK Government about it once the pandemic is over. Without UK Government support, it would only be possible to implement in Scotland if there were independence.

The principle behind it – that the state should play a positive role in creating genuine, lasting financial security – is a sound one. If we want to tackle inequality, we can’t keep playing the same hand.

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