The two systems share few cheerleaders. But look beyond ideology, and they have more in common than you might thinkby Graeme Cooke / January 30, 2018 / Leave a comment
At Davos last week John McDonnell, Labour’s Shadow Chancellor, declared his “deep interest” in the concept of a universal basic income. A week earlier the free market Adam Smith Institute gave UBI a similarly strong endorsement.
Stardust support from Elon Musk and Mark Zuckerberg, plus a flowering of pilots and feasibility studies, has turned this age-old, slightly nerdy idea into the zeitgeist policy of an insecure, unequal age.
At the same time—if in another world—the implementation of Universal Credit grinds on. Long delayed, this once shiny reform staggers, punch-drunk over the start line. Its once precious broad-church appeal largely lost amid a series of funding raids that have badly tarnished its original appeal.
Politically, the government still judges that pressing on is preferable to turning back, but the early, breezy enthusiasm for this monumental reform now looks quaint, even naïve.
More alike than we think
Debates about UBI and UC either take place in parallel universes or else they are posed as polar opposites, even enemies.
For instance, interest in UBI has partly been turbo-charged by its potential—so it’s claimed—to clear away the confusion, intrusion and bureaucratic inhumanity of UC.
Meanwhile, government Ministers defending UC rush to paint UBI as either utopian nonsense, or a dangerous threat to our labour market and public finances.
However—beyond the rhetoric—these two policies have more in common than advocates of either would like to admit.
This is worth recognising given that the only plausible route to a UBI, in this country at least, will have to run through UC. Tax and benefit systems are not built from scratch or on paper, but imperfectly chiseled from a complex and messy inheritance.
Similarities worth reflecting on
From this perspective at least, UBI proponents would be well served reflecting on the similarities with UC—and the heavy lifting currently, if inadvertently, being done to smooth their future path.
At a high-level, UBI and UC both seek to replace a range of benefits with a single payment. Both are paid in and out of work to ease labour market transitions. And both (theoretically) aim to improve work incentives by allowing people to keep more of their income as their earnings rise.
At a deeper level, UBI and UC—to their defenders at least—are both responses to concerns about complexity…