The last seven weeks have presented me with an experience I never imagined I would have; a pandemic that at the time of writing has been the cause of more than 28,000 deaths in The UK and a complete lockdown of society as we know it. On top of this, the recession that is likely to follow is set to be much worse than that caused by the Global financial crisis of 2008. The result then was ten years of austerity and cuts to public services, including The NHS, that have hit the poorest in our communities the most, caused large increases in the levels of poverty and increased the gulf between the richest and poorest.
It cannot, once again, be left to the poorest to carry the cost of the recession. We need something different; a new relationship between government and the people that will tackle the largely ignored insecurities, divisions and large-scale poverty that have long disfigured society and which are now set to worsen.
Although the government has introduced a number of emergency measures to support incomes during the lockdown there are many gaps in these schemes and they are not sustainable in the long term. The recession resulting from the pandemic could last many years and there could be further lockdowns and closures in the coming months.
The introduction of a Universal Basic Income would create a solid basic income floor and act as a guaranteed safety net. It would be paid to all eligible people without condition or means test, raise the incomes of the poorest, reduce the gap between the top and the bottom and reduce the level of poverty and inequality, be high enough to make a material difference to people’s lives but also preserve work incentives and be affordable. For example, a rate of £60 per week for adults and £40 for children would pay a significant unconditional £10,400 per year for a family of four. It would boost the incomes of the poorest families and cut child poverty by more than a third and working-age poverty by over a fifth. A Basic Income scheme at this rate would cost about £20bn, less than the total cuts to benefits (about £40bn) since 2010 and the cost of the government’s current wage subsidy over three months.
The cost could be met from tax adjustments, including the conversion of the current personal income tax allowance into a cash payment and a small rise in existing tax rates for higher earners. The personal allowance costs £110bn but is of no benefit to those with low earnings and not in paid work.
A Basic Income represents a plausible and workable scheme which will result in a much fairer and safer society.