Universal basic income: the debate continues

Simon Duffy’s lengthy piece on Universal Basic Services is a response to a podcast by the New Economics Foundation in which I debated the relative merits of ​“UBS” and universal basic income (UBI) with Barb Jacobson of Basic Income UK. Duffy suggests that collectively provided services are paternalist, elitist and, by implication, less empowering than giving people money (UBI) that they are free to spend on what they want. This sits comfortably within the neoliberal paradigm, which holds that free markets and individual choice are the best way to meet people’s needs.

It is well known that people do not have equal power in the marketplace and some are better placed than others to meet their needs through shopping. Much depends on what particular needs you have, where you live, what you know and what’s available to buy. Are you buying from a profit seeking multinational or a non-profit organisation and how far can your own purchasing power influence the quality of what you are buying? There is abundant evidence that markets often fail to meet needs, especially for those who are poor and powerless. Pooling resources and sharing risks through collectively provided services is a tried and tested way of addressing market failure. 

However, market failure is not the only reason to defend and strengthen collective services that are accessible for all according to need. There is strong evidence that these collective services play an important redistributive role, give far better value for money than services purchased by individuals, and help to build social solidarity in ways that markets never can. They help to support — and are supported by — the ​“core economy”, all the informal relationships and unpaid work that take place in households and neighbourhoods, without which the formal economy would grind to a halt. Sometimes described as a ​“social wage”, they provide an essential underpinning for people’s daily lives that is too often taken for granted. 

The term UBS is best understood as a campaigning device, to emphasise the merits of services rather than just income (UBI). But the picture is more nuanced than the term suggests. There are different systems of provision for different kinds of service. Housing, food and transport are no less essential for people to live well and participate in society than healthcare and education. Yet it does not follow that they must all be provided in the same way. Direct provision through publicly owned institutions may be appropriate for some, while regulation and subsidies work better for others. 

Nor should the case for services be seen as an alternative to reforming the social security system. Of course, the collective approach must incorporate measures to protect income. Protagonists of UBS would all agree that people need money as well as services and that no one’s income should fall below what’s required to live well and participate in society. Many of us would welcome exploring options such as a guaranteed minimum income for all, using democratic dialogue to decide what that minimum should be, as well as ways of making the process of qualifying for income support as simple as possible, and removing stigma through entitlement. 

This approach is not the same as giving everyone a basic income that is sufficient to live well and participate in society. It is a far, far less costly alternative. It isn’t perfect, but it avoids the very considerable danger of sucking up vast sums of public money that could otherwise be spent on strengthening and extending collective services.

Protagonists of UBI often insist that they want a bigger and better welfare system alongside basic income, but do not say how this combination could be afforded. Many fall back on the suggestion that UBI can be paid at a minimal rate – a gesture, but not nearly enough to live on. But what’s the point of building a vast and complex new system for paying peanuts? In the words of Luke Martinelli, who draws on extensive research and modelling to explore this conundrum, ​“an affordable UBI would be inadequate, and an adequate UBI would be unaffordable”. 

Support for UBI has remained resilient despite a lack of evidence to show how it would work in practice. There are three possible reasons. One is rooted in a wider yearning for radical change: UBI is a seductively simple concept that seems to address a range of urgent problems, and is fluffy enough to suit all tastes and aspirations.

Another, on the political right, is a conviction that UBI offers a more market-friendly way to address poverty and inequality than such tiresome efforts to disrupt the status quo as campaigning for a living wage, stronger workplace bargaining, decent childcare and social care, radical changes in housing policy, a shorter working week, and investment in a sustainable infrastructure.

The third reason, which seems to underlie Duffy’s critique, is a deep distrust of the state and most state-related endeavours. Does the case for more and better collective services put us all on a slippery slope towards more state control and an increasingly passive, patronised population? NEF’s work in this area suggests otherwise.

We have a strong commitment to the principles of co-production, where people get together on an equal footing with service workers, to define their needs and to co-design and – where possible – co-deliver activities to meet those needs. A central feature of all our work is to enable people to gain control over decisions and actions that matter to them, not just in the interest of greater democracy, but because people’s health can be profoundly influenced by how far they can control their lives and circumstances. We have pioneered practical work at local level to embed this approach and we have played a leading role in exploring the ​“social commons”, where people take control of the social resources that are essential for their survival and wellbeing. 

In all this we aim to transform public institutions so that they can support and sustain the process of shifting power from the centre to people at local level. 

There is a vital role for government, to ensure equal access, guarantee standards and distribute resources. Otherwise all that’s left is something like David Cameron’s ​“Big Society”, where all responsibilities are shunted to community groups, where some may swim while the poorest and least powerful are sure to sink. 

Finally, we should bear in mind the politics of sustaining either UBS or UBI. Services are diverse and multi-faceted, delivered through a great variety of organisations and places, as well as countless workers, many of whom are organised through trade unions and have strong reasons to champion what they do, whether it is healthcare, education, childcare or public transport. Cutting or abolishing services means taking on all of these providers and users. It’s not impossible, but in political and administrative terms it is highly complicated and challenging. But UBI is a powerful, single lever in the hands of the state: the Treasury gives, the Treasury can take away, or hold down the value – at one stroke. If we want to shift power to people from states and markets, surely we should focus on strengthening collective action and on other ways of reforming the social security system.