Why giving everyone in Yorkshire a universal basic income could help region - and country - recover from pandemic

An overhaul of the country’s economic system likened to the founding of the NHS could be the way to combat the devastating recession expected to be caused by coronavirus, campaigners have suggested

By Geraldine Scott Monday, 27th April 2020, 5:45 am

Proponents of a universal basic income (UBI), a system where everyone in the UK would be given a regular, unconditional sum, believe that once the Government’s schemes to support workers through the Covid-19 crisis fall away, their concept could be key to ensuring society’s most vulnerable do not fall into destitution.

And with UBI ‘Labs’ - groups of supporters set up to promote and investigate the idea - increasingly emerging across Yorkshire, their cause has become strengthened by the looming economic damage dealt by the virus.

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Jonny Ross-Tatam, from UBI Lab Leeds, said: “A Universal Basic Income is about guaranteeing security for everyone, especially those who need it most. Financial insecurity was very widespread in our society before this crisis.”

Universal basic income could help tackle the coronavirus economic downturn, supporters say. Photo: PA

He said research had shown more than 16m people had less than £100 in savings, leaving them just one missed paycheck away from debt.

“So it’s become even more important to make sure we put money and provide security in people’s hands,” he said. “Not just to keep them afloat during this crisis but also it will be vital to rebuild our economies for our recovery as well.”

The International Monetary Fund has predicted the recession caused by the coronavirus could be worse than the Great Depression between 1929 - 1933.

And the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) found, in a study released today, that up to one in three jobs in parts of Britain are at risk of being lost due to the crisis, with the Chancellor’s Yorkshire constituency of Richmond one of the worst hit.

UBI Lab Sheffield's Sam Gregory.

Alan Lockey, head of the RSA future work centre, said: “We need to see the state providing more unconditional support to a greater number of people, as well as funding personal learning accounts to support retraining throughout the crisis.”

And in a report released exclusively to The Yorkshire Post today, UBI campaigners say now is the right time to try the scheme.

The report says: “As the restrictions are lifted, the Government’s income protection schemes will be wound down. Households who do not regain their old jobs will suffer large earnings losses. Meanwhile, the millions not covered by the Government’s measures will have endured months of hardship.”

Therefore, they propose £1,000 a month per adult, and £500 per child, is paid to every household once lockdown lifts, in addition to other support such as statutory sick pay and Universal Credit.

Jonny Ross-Tatam, from UBI Lab Leeds.

The report puts the cost for the two months at £118bn, and while it is recognised this is high, campaigners say put next to the bailout of the banks in 2008 - which topped £127bn, and the Chancellor’s Job Retention Scheme costing £40bn alone, it is justified.

And Mr Ross-Tatam said: “When people have gone through tough times, like during this time with lots of people are doing it at the same time, they’ve found that actually that our social security system that was supposed to support them, isn’t there, it is isn’t as good as good as it should be.

“I certainly think the Government’s support measures are very welcome and unprecedented, but still millions of people are falling through the cracks of their furlough scheme, of the self employed scheme, and people are still having to wait at least five weeks for to get Universal Credit. “

He said targeted systems “tend to miss out many who need it most”

A UBI Lab Sheffield meeting. Photo: Sam Gregory

And Steve Thomas, Founder of UBI Lab York, said: “Safety nets have lots of holes, whereas a foundation is something that everyone can build off and that sort of basic income is a foundation rather than this talk about targeting the needy.”

The concept of redesigning the economy has gained plaudits in the North because the region is tired of waiting for Westminster for change, supporters say.

Backers of universal basic income (UBI) said many areas in Yorkshire, for example, were among the poorest in Western Europe.

And a majority of the groups set up to investigate the concept appear to be based in the region, with UBI Labs now set up in Sheffield, Liverpool, Leeds, Kirklees, York, Hull, Chesterfield and in the North East.

Sam Gregory, Chair at UBI Lab Sheffield, said: “Places like Sheffield will be the first to enter this recession and the last to leave.

“The kind of economic effects of coronavirus will hit places in the North much worse.”

Professor Louise Haagh, University of York.

While Mr Ross-Tatam added: “People across the North clearly want a better future for people in our communities and our families and we don’t want to wait for Westminster to deliver the change we want to see.”

In a situation said to mirror the call for devolution to bring decision-making to the North, Mr Ross-Tatam said: “We want to start pushing for that change in our communities, which is possibly why all these UBI Labs and groups have been set up in the North because we know that a basic income is a way of having a better future with more security and opportunity more evenly and fairly spread across the country.”

Mr Thomas added: “Cities in the North are not waiting for solutions to be given from on high because they haven’t been there. There’s been more than a decade of austerity. People are looking for local solutions because they know they’re going to wait a long time if they’re expected to come from the South.”

Mr Gregory said: “[The Labs] correspond to places, communities, across the North that can see that this model of neoliberal economics just isn’t working.

“Huge numbers of formerly great cities across the North of England have not benefited from the economic model for the last 30 years. And I think that’s why they’re the centre of this movement to try out something different.

“And it’s also about economic democracy. It’s about devolving economic power to the cities and just a much more of an equality of that economic power.”

UBI itself has also been compared to the NHS in its delivery.

Mr Gregory said the “universality” of both schemes made them similar, and UBI had also produced positive impacts on health.

He said: “When you first explain to people about UBI one of the first immediate questions you get is ‘why should the rich get it?’

“But then when you explain something like the NHS or any other sort of universal service, like the state pension, people immediately understand.

“I think if you look at the history of when the NHS was put out, they were very clear. They were thinking about those same sort of things about how to frame it, when the NHS was launched it said this is not a charity, this is a service that we all pay in to.

“A UBI would be the same, it’d be something that collectively we all pay into and then we would all benefit from - the main benefit being a floor that nobody could fall beneath.”

Paul Drake-Davis, a Liberal Democrat councillor in Hull who has been pushing for a trial of the scheme in the city, added: “The way I look at it, in the 20th century our big idea was the NHS, that universal service.

“And I think the way we’re looking at UBI now is this is that same big idea for the 21st century.

“People didn’t have to worry about their health care when the NHS came along and so we’re now thinking why should you have that worry about having a roof over your head or food on the table? It is that next level up, society’s next stage of evolution.”

Jonny Douglas, also from UBI Lab Sheffield, added: “With the basic income conversation, we kind of get bogged down in upfront, how much does it cost? Well, if you pitched the NHS and how much it was going to cost now, no one would ever do it.”

The various groups say that UBI could now have a key role in rebuilding the economy, but Erin Hill, who is behind UBI Lab Kirklees, said there was also a chance to redefine how we see work and the balance with family life.

She said: “I think lockdown has really made a lot of people think in many different ways about their work life and family balance.”

She said: “UBI could revolutionise the way we work as a society.”

Mr Ross-Tatam said: “The other benefit is people have more money to spend in their local communities that will support local businesses, it will support growth and tax revenues. And we’re going to desperately need that for our recovery out of this crisis.

“Even before this crisis, it would have been a massive help to communities who’ve been hit hard by a decade of austerity and had been neglected by Westminster. So putting money into people’s hands to spend locally, is great for growth and entrepreneurship and will bring in money as well.”

Trials of UBI have already been carried out in Finland, Canada, and Kenya.

Hull became one of the latest cities to ask to be able to runa trail this year.

In Finland the study did not reduce unemployment, but supporters also say there was no evidence it encouraged people to work less.

Tchiyiwe Chihana, from UBI Lab Sheffield, said “of course” the argument had been presented, but she said: “As far as the trials that we’ve seen take place before, people actually do continue to work.

“So this provides them a security, and also to people who actually provide work that is unpaid like care work, which is really vital. That also gives them a support base.”

In Spain, some form of basic income could be seen “soon,” according to social security minister José Luis Escrivá, as the fall out of the coronavirus continues.

In the UK backing UBI has also become increasingly popular among politicians.

It first made an appearance in the Green Party manifesto in 2015, and former Labour shadow chancellor John McDonnell is a supporter, which means if Labour had won in December there is a good chance the idea would have been trialled in the UK.

More recently, the Liberal Democrats supported UBI, with acting leader Sir Ed Davey signing a letter along with more than 170 other MPs and peers from across the political spectrum urging the Chancellor to back the concept.

And although Labour said now is not the time to implement a new social security system, leader Sir Keir Starmer’s spokesman said this week: “As we come out of the pandemic, we’ll be making arguments for a new settlement that is more simple, more effective and offers proper protection to people.”

During the Labour leadership election, Sir Keir had called for a national income guarantee scheme to combat the economic impact of Covid-19. And Labour’s new Shadow Secretary of State for Work and Pensions Jonathan Reynolds, and new Shadow Business Secretary Ed Miliband are also fans.

Last month the Prime Minister said introducing a universal basic income to aid financially hit workers “will certainly be considered” and agreed to hold talks with supporters of the proposed scheme.

But Chancellor Rishi Sunak has since repeatedly dismissed it.

He said in the Commons last month: “We’re not in favour of a universal basic income.”

Instead he wanted to use existing systems.

Meanwhile Scotland’s First Minister Nicola Sturgeon has said the case for a UBI has been “strengthened immeasurably” by coronavirus.

On Twitter, Ms Sturgeon said she has “long been interested” in the concept.

The Scottish Government does not have the power to implement such a scheme but Ms Sturgeon said she was hoping for a “serious discussion” with Westminster.

But UBI expert Professor Louise Haagh, based at the University of York, said any move to UBI must be permanent and not as an emergency measure.

Prof Haagh, who has written a book on UBI and has more in the works, said she welcomed the increased focus on the idea, with MPs and the public knowing far more about it than a few years ago.

But she warned any shift towards the model must be permanent and not part of emergency measures to deal with the coronavirus.

“I take a longer term perspective,” Prof Haagh said. “The idea is to generate a permanent sense of security for the individual in society and so when we talk about a recovery UBI it is something slightly different.”

She said: “It’s really important to say that it shouldn’t replace other sources of income or economic security. And I do think it’s a slight worry that it may be seen by a lot of people as a rather crude form of intervention because it’s temporary, and because it’s not really integrated with other systems.”

She added: “I am concerned about introducing the justification for basic income in the context of an acceptance that we will see a great recession and fiscal cuts post-Covid.”

Prof Haagh said: “It is important above all to challenge the premise that we must face a new wave of austerity and it is in this context that temporary basic income is important. An emergency basic income does not address the long-term detrimental impacts that austerity and recession would entail in terms of health and the economy.”

But she welcomed the increased focus on UBI which had come in recent years.

She said: “What I do think, though, is important is that the discussion around basic income in the context of the coronavirus has helped reveal sources of insecurity that are endemic in society. It was there before, but it’s now become visible, and it’s quite revealing.”

She said MPs and ministers had been forced to recognise that, for example, they would not be able to survive on statutory sick pay.

She said: “I’m chair of a network called the Basic Income Earth Network which was established in 1986, among people interested in the idea of basic income. Until 2016 - so for 30 years - although there were debates going on around the world these were between quite a small number of actors.”

She said she did think there would be “steps in the direction” of UBI in coming years, potentially with a clause where the richest do not qualify.

She added “there is no doubt” it will be debated and discussed more in coming years.

Mr Douglas said there had been a “huge amount of progression” in recent weeks.

“We've been talking about the fact that we've probably made four or five years worth of progress in the last four or five weeks,” he said.

Mr Gregory added: “I think that over the coming weeks, people, particularly in Yorkshire, will see that what the Government have done so far isn’t good enough.