A new report by Compass suggests Labour is right to consider the idea
Last week, Labour revealed they were looking at a pretty radical policy. Not nationalisation of the FTSE 100 companies, or abolition of the monarchy. A different kind of radical policy – one drawn up by neoliberals, no less.
It’s an idea which has drawn support from across the spectrum over the decades – from President Richard Nixon and free market economist Milton Friedman to Thomas Picketty and Joseph Stiglitz – and last night, Shadow Chancellor John McDonnell gave it official credence: Labour are looking at introducing a Universal Basic Income (UBI).
McDonnell was speaking at Monday’s parliamentary launch of a new Compass think tank report on the idea: ‘Universal Basic Income: An Idea Whose Time Has Come?’
If you haven’t heard of it, UBI – or a Citizens’ Income – is the idea that instead of having an eclectic system of dozens of different benefits, you cut out the admin and give everyone a flat rate of money from the state per year – often pitched as something around £20,000 a year.
It’s already sort of the case in Alaska, where citizens are given an annual (variable) dividend from the sovereign wealth fund there, though fuelled by oil money. And in Norway, where the same thing happens via the world’s largest sovereign wealth fund.
The commitment from Labour is thus far tentative: ‘It’s not official Labour party policy…it’s in the mix’ said McDonnell when asked about the plans last week.
But the policy – long supported by the Green Party – is now moving into the political mainstream as a way of dealing with a changing world. And at the weekend McDonnell said it could be in Labour’s next manifesto to pilot the plan.
One rationale is simple. As work becomes more unstable, fluid and insecure, citizens need some stability in order to function, to do what they need to do, and to have that crucial financially and mentally/emotionally stable basis to build a good life on.
It’s a 21st century safety net to replace what’s viewed as a paternalistic, increasingly patchy Beveridge one.
Because the old binary of ’employed’ and ‘unemployed’ is breaking down. People move in and out of work, and different levels of work, all the time.
People are in education one moment and work the next, and often both. They are creatives and self-employed or part-time online task-based workers.
More and more jobs are being automated, and we have no idea yet what impact it will have on the world of work – although it becoming more precarious seems almost inevitable.
So it’s worth quoting in detail the forward from Compass report:
‘In 2014, the Office for National Statistics (ONS) estimated that 1.8 million workers were on contracts that ‘do not guarantee a minimum number of hours’.
A 2016 survey found 11 per cent of the population aged 16–75 (the equivalent of nearly 5 million people) working for online platforms, paid by the task.’
It goes on to say the present system is ‘no longer fit for purpose’, that it penalises benefit claimants whose lives don’t fit into simple boxes, and is bad for employers who ‘want to access labour flexibly on demand’.
For a Labour party in need of uniting left and right within the party with bold new ideas – devoid of ideological baggage – UBI could be just the solution.
While Switzerland recently voted against a vague proposal on the idea (one rejected by nearly all parties – including the Greens – for not being detailed enough), Finland has committed to trialling it – as have parts of the Netherlands, Canada and France.
It’s a policy you have to get right, and there are many versions of the idea. The Greens here were slated before the last General Election when it turned out their version of the plan would have hit the poorest hardest. So it’s worth a long and detailed think.
But with the world of work changing rapidly before our eyes, and a Labour party in needs of fresh thinking, think about it we should.
Josiah Mortimer is a regular contributor to Left Foot Forward. You can follow him on Twitter@josiahmortimer
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