In poor countries where there is a lot of absolute poverty, universal basic income (UBI) might be the best way to get the economy off the ground and raise living standards. It might help to solve the chicken-and-egg problem, whereby the economy struggles to grow because people don’t spend, but people can’t spend because they don’t earn enough. In a rich and complex economy like the United Kingdom, however, we think that UBI can be a bit of a crude approach. There are surely more targeted and intelligent ways of doing it.
We do, however, think everyone deserves at least a minimum. But that doesn’t necessarily mean a minimum of income. Put it like this instead: everyone deserves at least minimum access to healthcare, at least a minimum of support in a crisis, and at least minimum support in old age. The U.K. is capable of providing those, so it should (and for the most part it does rather well). Rather than support a minimum basic income, which could create perverse incentives not to work, we think a guarantee of more thoughtful minimums would be more effective. The same moral hazard risks don’t exist with our minimums; for example, the existence of a minimum healthcare safety net doesn’t incentivise people to get ill on purpose.
Worst still, we think establishing a UBI could risk ‘patching up’ the issue of poverty by making it look like it’s disappeared, but really you’re just kicking the can down the road because UBI risks removing the incentive for each person to be more productive.
While we agree with the idea of a safety net to ensure that no one faces severe hardship, we also think the safety net should only come into play when there’s a crisis, like last year. People still got paid furlough when they lost their jobs. That was the right thing to do. But we wouldn’t support the government doing that all of the time, effectively saying “quit your job whenever you like and we’ll still pay your wages”. That’s what we mean by bad incentives.
We think it is better to focus support on those who are truly unable or less able to support themselves: those with disabilities, the elderly, etc. It’s our collective duty to do that. But if you’re able to work, then you should. In that regard, we shouldn’t expect a universal basic income, but we think we should be able to demand of our government the guarantee of the more thoughtful minimums that we raised earlier. And as residents in the U.K., we consider ourselves extremely lucky to live in a country that even tries to provide such guarantees. But there’s a limit to what we ask of our governments; the rest is up to us.
To the pound 