I desperately want to see an end to Universal Credit. Last month I sat with a church member facing threats of eviction from her landlord. Like many people at the moment, work has dried up and she has no income coming in. Her application for Universal Credit has been denied repeatedly. She will get UC – she will win at appeal in a few months’ time, and then if she is lucky she will wait a further 5 weeks for her first payment. However, she needs to eat before then and eviction proceedings across England are restarting in a few weeks. Her story is both unique and depressingly common.
We can and should do better than this. One idea that is being talked about is a Universal Basic Income or UBI[1]. This blog is the brief story of why I loved the idea of Universal Basic Income, and why with much regret I realised that it can’t be the answer to the problems of Universal Credit.
What is Universal Basic Income?
Universal Basic Income (UBI) is where every person is given by the government a secure unconditional tax free income, the amount varying only by the recipients age. It ensures everyone has an income and that everyone is treated equally. As a Christian, whose worldview is shaped by the idea that all people are created in God’s image, this simple equality instinctively appeals to me.
It is also, in many ways, the opposite of Universal Credit. While Universal Credit offers highly conditional, insecure support which can be taken away in an instant, UBI offers a consistent, reliable, dignified income. It is a big attractive idea that many people in churches are drawn to. I was too.
Big ideas with big consequences
Social security policy has a long history of big ideas being imposed on the poorest families. Universal Credit had at its heart a big attractive idea – “get people into work and make it pay”. It’s not a bad idea and the system devised to make it happen looked beautiful to policy makers, economists and politicians alike. It is hard to remember given what has happened since, but in 2010 the principle of Universal Credit had near universal support.
A big attractive idea was not enough. It needed to fit the complicated reality of people’s lives, and from day one Universal Credit failed that test.
Falling out of love with Universal Basic Income
There is a huge variation in what individual families need in order to have a decent standard of living. Means tested benefits (imperfectly) adapt in line alter with a family’s needs. UBI as a single fixed payment can’t. Churches have been most concerned about policies like the benefit cap, the bedroom tax and the two-child rule precisely because they break the link between benefit and need. UBI by design is blind to varying need and that creates big problems.
Take one example: over five million households need support with housing. London’s average rent is £1,700 a month. In the North East, it’s £495. How would a single, equal UBI payment deal with that difference?
The answer is that usually UBI doesn’t try. Instead, most UBI-type schemes propose keeping housing benefit in addition. Keeping housing benefit comes with means tests, conditionality and sanctions[2], all the things that you might hope UBI gets rid of.
Keeping Universal Credit and then adding a Universal Basic Income?
The think-tank Compass is currently holding a number of “UBI Conversations” with faith groups. In 2018 they compared several different UBI schemes. All of them, for the reasons above, proposed keeping Housing Benefit as it is. Crucially, even then, any scheme which replaced the non-housing parts of Universal Credit with a UBI, ended up increasing child poverty markedly. For this reason the Joseph Rowntree Foundation[3], who funded the work, rejected UBI as a poverty fighting tool.
Compass put forward a preferred scheme that did reduce poverty. It achieved this by keeping Universal Credit unchanged. This scheme would move around money more than double that of Universal Credit[4] (approximately £140 billion) but means tests, fit-for-work tests and sanctions would remain.
Where next?
As Christians, our mission is based on our understanding of humanity as created by a loving God, that values each person. This requires that we offer each other the respect and dignity due to beings created in the image of God. Much of what we offer to public debate is our commitment to this over and above any other ideological position we may hold dear.
I love the egalitarian ideals of UBI, but as a way of tacking the injustices of poverty and our inhumane benefit system it is the wrong tool for the job. I am increasingly concerned because I am regularly approached by good people from churches who are convinced that UBI can end the horrors of Universal Credit while reducing poverty. No one has designed such a scheme, and it is incumbent on those who promote UBI to be open about this.
The conversation about UBI does however expose important truths. UBI experiments show that ensuring a decent secure income without the threat of sanctions does not discourage people from working. Instead it allows them to find better more sustainable work. Let’s create a benefit system that provides that. Sanctions could end tomorrow without a UBI simply by passing a law.
If we are able to muster £140 billion for a UBI, let’s keep in mind that this sum could instead be used to treble Universal Credit payments, essentially ending mass poverty in the UK. Let’s keep that sense of ambition and spend the money on the best poverty-fighting tools.
Anyone who has read these blogs will know that I believe that those who experience poverty are the people best placed to design a poverty fighting system. Recently I was introduced to the work of the Commission on Social Security made up of people who use the benefit system. Their design for a Universal Credit replacement is a work in progress. It is messy, it is not ideologically pure, it contains compromise – essentially it looks like real life.
The church member I was talking to who is living under threat of eviction would still be waiting for help with her rent, still fearing eviction, under any of the UBI schemes proposed. Under the Commission’s scheme, she probably wouldn’t. Take a look and remember transformative change is possible.
Paul has written a longer exploration into Universal Basic Income, poverty and Universal Credit which can be found here.
Universal Basic Income Briefing
[1] It is also called a Citizens Income or a Negative Income Tax
[2] Sanctions applies to the housing costs element of UC. People yet to be transferred to UC or Pensioners who will remain on the old style Housing Benefit do not face conditionality and sanctions in the same way.
[3] Joseph Rowntree Foundation is the UK’s most prominent anti-poverty charity with a longstanding commitment to structural change.
[4] Universal Credit and the benefits it hopes to replace – JSA, ESA, IS and Tax Credits are around £68 Billion
