Dr Luke Martinelli is Research Associate on the IPR's universal basic income project. This post draws in part on material presented in his recent IPR Policy Brief Assessing the Case for a Universal Basic Income in the UK.
In recent years, debate around basic income has moved from philosophical discussion at the fringes of academia to ‘serious’ policy conversations about practical feasibilities and issues of policy design. Witness the flurry of global media interest; much-anticipated experimental trials ongoing or planned in Finland, the Netherlands, Canada, Kenya, Uganda and the US; and serious consultations in the UK by the Work and Pensions select Committee, Scotland’s Social Security Committee, and the Labour Party.
Even more significantly, there have been serious indications of support from a number of devolved regional and local authorities across the UK. In Scotland, four local authorities – including the three largest in the country, Glasgow, Edinburgh and Fife – have signalled their intention to host basic income schemes. Following these announcements, the Scottish government has confirmed it will fund and support the experiments in its latest Programme for Government. In Wales, Assembly Members from Labour and Plaid Cymru have also expressed interest in the policy. In England, there have been a number of developments at the city level. In Sheffield, local activists and campaigners are exploring options to carry out a trial. In Rochdale, the RSA are working with a local housing and community development organisation to design a basic income pilot.
These subnational developments follow those leading to the proposed trials in the Netherlands and Canada. In both countries, impetus towards basic income trials has come from local and regional governments dissatisfied with their national welfare policies, which are seen variously as administratively wasteful, intrusive, and ineffective in activating people into work.
Several important questions emerge in the context of increasing support for and interest in basic income. Firstly, why have these developments occurred? Why does basic income’s sojourn in the political wilderness now appear to have come to an end? Secondly, what is the real significance of these developments? Do they indicate a genuine window of opportunity for the policy to gain traction and achieve implementation?
In the case of the proposed experiments in the UK, we must be circumspect about the prospects of meaningful evidence on basic income being generated – as I discussed in a previous post – let alone about the possibility that the trials will lead to the policy being implemented more widely. For one thing, there is the issue of jurisdiction and competence. Benefit levels are determined in Westminster, not Holyrood or Cardiff Bay. So it seems that any experiments are likely to be concerned with adjustments to conditionality regimes attached to existing benefits, rather than the granting of an unconditional payment per se. There are also myriad ethical issues associated with granting favourable treatment (free money!) arbitrarily to one group over another for the purpose of social research. Both of these issues have diluted the proposals in the Netherlands, due to the intervention of the national government in the scope of the experiments to diverge from national policy priorities.
Our latest IPR Policy Brief, Assessing the Case for a Universal Basic Income in the UK, tackles these issues directly. The Brief is the culmination of a year-long project, in which we have carried out microsimulation modelling on a series of possible basic income schemes and sought to situate basic income within the wider political economy of welfare reform.
Across five chapters, the Policy Brief introduces basic income as a family of schemes, identifies the key controversies and debates, and reviews the nature of existing empirical evidence; examines the reasons behind increased interest in and support for basic income, in terms of shortcomings of existing welfare provisions and fundamental labour market change; reviews microsimulation work looking at the fiscal and distributional effects of different plausible proposals; looks at theoretical, empirical and microsimulation evidence on basic income’s anticipated labour market effects; and identifies possible constituencies of support for and opposition to basic income, assessing the feasibility of introducing the policy (in various forms) into the UK welfare system.
There does not appear to currently exist a sufficiently coherent and powerful constituency arguing in favour of basic income, despite numerous groups of potential beneficiaries. One of the problems in generating such a constituency is that once we move from the abstract concept to more specific concrete proposals, significant areas of disagreement become apparent around the level at which the UBI should be paid, the way it should be funded, and the manner in which the payment is intending to mesh with the wider policy environment. One of our main findings is that ‘full’ basic income schemes capable of replacing the majority of existing benefits – as well as ‘partial’ schemes paid at reasonably generous levels – appear to be politically and fiscally unrealistic for the foreseeable future, due to trade-offs in policy design between affordability and adequacy.
However, basic income advocates should note a number of more feasible implementation trajectories, which despite falling short of the ideal, still embody a number of basic income’s most important principles, and are more realistic from a strategic/advocacy point of view. These include more modest schemes that are limited to particular demographics or that repurpose existing income tax allowances, as well as policy reforms that ease the severity of existing work conditionality regimes. We note the new report by the TUC and the Fabian Society which proposes conditional learning allowances, higher rates of Child Benefit, and the gradual conversion of the personal income tax allowance into refundable credits as stepping stones towards a more universal and less labour-focused welfare system. It is difficult to disagree that perhaps basic income proponents need to be less ambitious – and less idealistic – if their advocacy efforts are to bear fruit.
The insights on the political feasibility of basic income arising from our Policy Brief are reinforced by recent polling carried out by Ipsos Mori on behalf of the IPR. When phrased in general and abstract terms, nearly half of respondents (49%) expressed support for a basic income, with 26% opposing. However, when respondents were asked to consider a basic income funded through increased tax levels, net support dropped to 30% (with 40% opposed); when they were asked to consider a basic income funded through cuts to other benefits, support dropped to 37% (with 30% opposed); and when asked to consider a basic income funded by both tax increases and benefit cuts, net support fell to 22% (with 47% opposed). As our microsimulation research has demonstrated, designing a ‘fiscally feasible’ proposal necessarily involves a combination of tax rises and benefit cuts, suggesting that support for basic income is far below the threshold for majoritarian support. However, ‘negative income tax’ type schemes – which aim to provide an unconditional minimum income floor but which are targeted at low-income individuals or households through means-testing – are more popular (57% support) than a pure basic income paid ex ante to all (49% support), as are so-called participation income schemes that are restricted to working-age adults engaged in ‘productive’ activities (52% support).
Our polling has other interesting implications. Not only do high levels of support dissolve when respondents are asked to consider ‘realistically funded’ schemes, but we have uncovered evidence that among supporters of basic income, different groups of voters support different types of scheme. For example, 40% of Conservative-leaning respondents support basic income in general terms, compared to 63% of Labour-leaning respondents, with 41% and 17% respectively opposing the idea. But besides Conservative and Labour voters being differently inclined to support basic income, those among them that support the policy are interested in different types of basic income. Support among Conservative-leaning respondents grows to 49% when asked to consider a basic income funded through benefit cuts. While support among Labour-leaning respondents drops when they are asked to consider concrete funding models, this group has a clear preference for schemes which rely on tax increases – particularly on wealth – compared to those that require benefit cuts. Different groups are also motivated by different policy goals among the many that basic income advocates advance as justifications for the policy.
All of this is suggestive of our argument (following De Wispelaere, 2015) that basic income’s support base is characterised by persistent political division, making constituency- and coalition-building a very challenging endeavour.
You can download Dr Martinelli's IPR Policy Brief Assessing the Case for a Universal Basic Income in the UK here.