Time to look anew at the merits of a Universal Basic Income

We should be guided by the evidence in planning for a post-Covid-19 world

May 12, 2020
The main building of Helsinki University. Photo: Peter Zimmermann/DPA/PA Images
The main building of Helsinki University. Photo: Peter Zimmermann/DPA/PA Images

Covid-19 has transformed the UK in ways which seemed unimaginable just a few short months ago. Key to this transformation has been a lockdown with huge implications for the UK economy. Approval ratings for the government’s actions are high, and recent opinion polls indicate this is largely due to the furlough scheme put in place by the Chancellor Rishi Sunak. Whatever life holds after lockdown, all the predictions are that our economy will suffer a severe shock. Now is the time to consider how we rebuild for the future and we should be looking at the evidence of the benefits of Universal Basic Income (UBI).

The furlough scheme has benefitted some, but has left out many. A widely-used saying has pointed out that we are all sailing in the same storm but our ships are different. For those whose income has been protected, their ship has found a safe port, but for others facing financial ruin, it is a disaster. We now live in a world where the government is being guided by expert advice. This should not just extend to our health but also to the economic impacts of Covid-19.

Last week Alistair Carmichael MP wrote an article for the Scottish Herald calling for more evidence about the benefits of UBI, saying “Income inequality has grown in this country and now poses a risk to social cohesion. A Universal Basic Income may be part of the answer to that. I frankly remain to be convinced but I have an open mind.” He is right to make this call for further evidence.

Liberal Democrats have long called for greater fairness and action to tackle income inequality, and this played a role in my choice to join the party, having left the Conservatives. But the recent Redfield and Wilton poll for the Daily Mail showed that 53 per cent of Conservative voters supported the idea of the government subsidising wages for those who didn’t feel it was safe to return to work. Liberal Democrat and Labour voters showed even higher approval, demonstrating a willingness to prioritise health and wellbeing despite this necessitating a greater role for the state.

For two years the government of Finland conducted a pilot into Universal Basic Income, amid concerns that a third of jobs may be lost due to wider adoption of robotics and automation. The latest evidence of the impacts of the trial were published last week showing that those receiving UBI worked on average six days more a year than those receiving benefits and had better mental health and wellbeing.

The Conservative government should reconsider the evidence provided by the Finnish research. The impacts of a sudden loss of benefits were examined by the work of Iain Duncan Smith at the Centre for Social Justice. In the report Breakdown Britain, the value of care and community was articulated as follows: “The welfare society is that which delivers welfare beyond the State. At the heart of the welfare society is the family. I think of a wife caring for a sick husband, a son caring for an ageing mother, or even an extended family rallying round to help a young relation tackle their drug addiction. The welfare society remains the largest deliverer of care in Britain today, dwarfing the state and without which the state would be overwhelmed. From birth to death it has an enormous bearing on all our lives.” The current lockdown has reinvigorated our sense of community and recognition of the value of those essential workers who have provided health services, care and other support, many working for low pay.

The Finnish experiment is not conclusive. But its findings indicate that we should not dismiss UBI as an option for rebuilding our economy. They cast doubt on assertions that UBI will provide a “disincentive to work.” There has been much rhetoric around this being a “one nation” government. Now is the time to rebuild our economy in a way which considers both economic and social value. The Conservative government can and should be radical. As Winston Churchill once said, “No idea is so outlandish that it should not be considered with a searching but at the same time a steady eye.”