Basic Income: The Policy That Changes Everything

"The book really does set out the way in which introducing a scheme like this transforms everything. By increasing the amount of resources that people at the bottom end of society have access to, we massively improve nutrition, housing, and the satisfaction of other basic needs. By increasing security of payment, we enable people to leave abusive and exploitative situations in the home and in the workplace, and by increasing predictability of payment, we enable people to invest in the long term. There are three pathways that have a transformative impact across society. A large proportion of the health crisis that we face today is due to health-related behavior, and that’s related to stress. It’s related to not having the resources needed in order to eat well. A large amount of dysfunction that we have in society is associated with people not being able to see the long term. If you’re constantly faced with the threat of destitution, that constitutes an extrinsic mortality cue—an almost subconscious one—which suggests that you’ve got a threat to your existence. And under those circumstances, people don’t invest in the long-term. It’s not rational to invest in long-term, so you get some very short-termist, hedonistic behaviour. What we’re able to show is that, by working through this logic model, these three pathways filter through not just to various different outcomes in health, education, employment, and crime, but they have a compound effect. They mutually reinforce one another and produce a benefit to society that is social and economic in nature. The returns on the investment that we get from something like basic income, if it’s properly designed, are really quite considerable and start to pay for themselves. Well, tax rich people. This is supposedly a rich society, in which rewards from working are reducing relative to rewards from wealth. Even relatively centrist figures like Neil Kinnock are now endorsing forms of wealth taxation that we think are the only means, frankly, of producing the tax yields needed to invest in rebuilding Britain. The alternative is something we genuinely can’t afford. The fiscal restraint that’s been exercised over the last 15 years has contributed to a downward spiral in which any savings from reduction in public spending have been swallowed up by the cost of dealing with consequences downstream in different departments: through the NHS, through the criminal justice system, through all of these other parts of government. That seems to be much more expensive in the long term than just investing upstream in the first place. So when we say we can’t afford the welfare state, the reality is, we can’t afford not to have it. Universal Credit is not there when we need it. It can’t possibly respond in the way that we need it to, given the fluctuation and volatility that people see in their incomes. It doesn’t provide people with the security they need in order to engage in longer-term planning and health-promoting activity. Universal Credit is rightly seen as an out-group issue for the vast majority of workers. They see Universal Credit as something that isn’t for them. They see it as an example of resources being taken from people in employment and being given to people out of employment. That fairness deficit is one of the key reasons why people have historically been open to a reduction in welfare spending. If we want a welfare system that’s resilient and actually gives people what they need at the time they need it, we need something that is much more universal, and is there ready for us in our bank accounts when the worst happens. I think the notion that it’s viable to increase Universal Credit politically is dubious. If you look at the popularity of schemes such as basic income compared to an increase in Universal Credit, people generally prefer basic income schemes because they see the specific benefit to them. They don’t necessarily see the benefit of Universal Credit. Yes, people can see clearly that they’re not being disadvantaged by it. Yes, but the number of people who benefit from it in terms of levelling out their income volatility is much greater than just the redistributive effect. One of the key pieces of evidence that’s emerging on income volatility is that that itself is a source of anxiety and depression. Many incomes these days—including among barristers and other relatively well-paid workers—are volatile. Our current system can’t provide people with the levelling out of incomes that we need in order to address our crises in health and inactivity in general. What would be a crazy amount, Sophie? Any amount would make Rachel Reeves pass out! That’s one of the reasons why she’s not a suitable Chancellor. When you look at chancellors who’ve been successful historically, they’ve not just had the courage of their convictions; they’ve actually recognized that substantive reform is required in order to avoid absolutely disastrous outcomes. You can see that Rachel Reeves intuitively understands that Britain cannot possibly be rebuilt without quite significant public spending, but also hasn’t got the courage of her convictions to produce anything meaningful. It’s the inability to commit to large-scale spending that produces the most damaging outcomes. It’s not the case that public spending is a bad thing. It is the case that public spending, without narration and explanation, is seen as a risky endeavour. What we’ve lacked from Rachel Reeves is a commitment to actually explaining to the country and to the market that, without massive public spending, we’re never going to be able to achieve significant growth. We haven’t got the infrastructure to secure private investment. We’re never going to be able to achieve growth without massively investing in social security upstream, because the cost of dealing with the lack of that investment downstream is enormous. She doesn’t really understand the way in which outcomes are produced upstream in that way. The welfare reforms are indicative of this – minute projected savings that are outweighed several fold by the downstream consequences on health, crime, and the economy."