The ground has shifted. Is the time right for basic income?

By Joe Chrisp

Despite the Conservative Party still winning the most seats, the General Election was undoubtedly a seismic event that shook the foundations of how many people understand politics. Yet, there are almost as many people that claim to have the answer to the GE puzzle as there were people who claimed it was a foregone conclusion. By explaining the result people are also attempting to map out a path forwards and predict what it means for politics in the future. With the onward march of basic income worldwide, at least in terms of attention, it is interesting to consider what the election may mean for the future of basic income in the UK. How should advocates view the election result in respect to the political feasibility of basic income?

The Politics of Hope

Is anything possible? The most obvious lesson of the election that should embolden basic income advocates is that the rules of politics as we know it can be flouted. While the EU referendum and the election of Donald Trump to the White House both signalled that politics was changing, most of the political class assumed that anti-establishment politics from the Left was unlikely to have the same appeal. The received wisdom was that due to the overestimation of Labour’s vote share in every election since 1983, even the late surge in the polls was unlikely to mean anything other than a comfortable Conservative majority. The fact that a variety of electoral red lines, from economic stimulus to national security, seemed to matter less than expected inevitably opens up the political debate. Is it possible that the public could support universal, unconditional benefits after all? Or at least vote for a party that promised them?

Of course, the causes of Labour’s success are near impossible to disentangle and the Conservatives’ dreadful campaign should not be ignored. Yet, it would be difficult to argue that big and bold policy proposals in the manifesto, such as abolishing tuition fees, did not have a sizeable impact on Labour’s election result. Committing to £48 billion of spending did not have the expected effect on Labour’s credibility, and the apparent failure of the ‘magic money tree’ narrative to deter voters should spell hope for any policy of expansion. The most recent British Social Attitudes Report suggests that support for tax and spend policies is growing.[1] The survey suggests that nearly half the population would support raising tax to fund increased state spending. This was higher than the proportion that prefer the status quo for the first time since 2006. If this election truly marks the end of austerity, it may unlock the funds and the political ambition to launch a new transformative agenda to reshape the welfare state. The return of universalism to the heart of the Labour project – whether on university fees, school meals or in regards to pensions and the winter fuel allowance – also may bode well for basic income or the principles behind it.

The ability of the Labour leadership to bypass most of the party and media’s obvious scepticism and sell the manifesto directly to the public is also likely to give hope to advocates that think basic income would be popular if only there was a more prominent sponsor. The increasing influence of new media sources, whatever their reliability, can only help more leftfield policy proposals such as basic income get on the agenda. Advocates may feel that a Select Committee snub is not quite as grave as it might have been in the past[2]. That young people seem to be engaged in politics again also gives credence to the idea that their apathy was based on what was on offer rather than innate disinterest. Basic income could perhaps be part of a wider package to enthuse younger voters back into the fold. From polling on basic income, pensioners (or those who have already secured their own basic income) are generally found to be among the most consistent opponents.[3] Hence, the possibility that the pensioner bloc may be loosening its stranglehold on British electoral politics can only be seen as good news for advocates. The BSA report also suggests that the extent to which the public more broadly view pensioners as deserving of extra funding is on the wane. For the first time in more than 30 years, pensions were found not to be the public’s main priority for extra spending on benefits.

An electorate that seems more receptive to expansionary public spending and new avenues for engagement with the public gives rise to the idea that the door may be opening. Can basic income attach itself to the new radical politics of hope?

Harsh Reality?

Most of these points are broad indicators that the wind is blowing in a direction that could allow basic income to become mainstream politics. However, zeroing in on some specifics paints quite a different picture.

Firstly, whether it’s free university and the National Education service, free school meals, or increasing NHS and school budgets, the universalism of the Labour manifesto was primarily the universalism of public services. This of course does not necessarily pave the way for universal cash benefits. Telling a nurse that hasn’t had a pay-rise for 7 years that there is no magic money tree can come across as callous. Yet, arguing that government should not give every individual adult in the country a cash transfer with no strings attached should resonate better when opponents are conjuring up images of trees decked with £20 notes. This is coupled with the obvious fact that Labour shied away from a defence of welfare and social security. The Labour Party response to deep tax credit cuts planned by the government was, at best, unclear. The commitment to increase the Carer’s Allowance and the manifesto’s mention of ending the sanctions regime are signs that some of the basic income debate is filtering into Labour policy. But the reality is that none of this was centre stage in Labour’s campaign, and one is left wondering if this was a deliberate response to fears that Labour would be seen as the party of welfare again. The concern with services also tapped into specific constituencies: public sector workers angry at years of pay freezes; parents outraged at school funding being cut; young people inspired by the notion of free education. As advocates have often found, basic income does not have an obvious constituency that it speaks to.

Even more damning for basic income is Labour’s reluctance to mount a defence of the broader tax base. While taxing the rich to pay for free university education is arguably viable, there is no possible way that a remotely generous basic income could be funded without also significantly increasing the taxes of the 95%. Indeed, any case for basic income has to include the case for higher taxes for the majority (Hirsch, 2015). Although it is hard to argue against the idea that Labour’s pledge on freezing tax rates for 95% of the population was tactically astute – and probably one of the critical factors in its electoral success – it is also inconsistent with all feasible schemes that have been explored in microsimulations (Martinelli, 2017; Reed & Lansley, 2016; Torry, 2016). Advocates may reply that the tax-free allowance or other tax breaks should be viewed as benefits and abolishing them to fund a basic income would not represent a tax rise. Yet, it is difficult to imagine that argument resonating with the public. Negative Income Tax schemes that avoided the churning of tax and benefits could reduce the necessary tax burden but even these would almost certainly require substantial increases in tax to avoid damaging cuts. Less generous “dividend”-type schemes could be devised from alternative tax sources such as carbon, land or IPOs but these could never amount to a significant reform of the social security system. Interestingly, land value tax did get a mention in the manifesto as something to “consider” – but as a means of funding local government. After it was labelled the ‘garden tax’, Labour were very quick to stress it as a possible reform of council tax rather than as a new tax[4].

Finally, there is the simple fact that basic income was not mentioned once by the Labour Party. Despite announcing a working group to consider the idea, not even a non-committal reference to plans for an experiment or policy review made its way into the Labour manifesto. While relatively hasty plans to nationalise the water industry and even explore land value tax were thrown in, the absence of basic income in any form suggests it is extremely low on the Labour leadership’s list of priorities. The Green Party did try to give it some space in the debate, but even they adjusted their commitment slightly from 2015 by focusing on pilots or experiments rather than putting forward proposals for the introduction of a basic income proper. It was also not an election that suggests the Greens are increasing their influence on the public debate, even if Caroline Lucas did retain her seat. The SNP’s electoral setback also may limit the extent to which longer-term projects are supported or even tolerated.

None of this is to say that basic income is dead. This was a snap election and the Labour Party did not perhaps have the time to flesh out a plan for such a bold new strategy. Possibly this election marks the start of a complete shift in British politics emboldened by a politicised youth in favour of radical policy ideas. This could give space for basic income to appear on the agenda of a left-wing government determined to transform the country. To temper some of the political pitfalls, modified basic income schemes such as those targeted at specific groups (eg. young people) or conditional on work, training or caring could begin to enter the political arena. Committing to restoring universal child benefit would be a sign that Labour considers the principles behind basic income important.  However, the 2017 Labour manifesto and campaign gave very little sign that basic income was the direction of travel. One suspects that if basic income could not force its way into this election campaign, it is very unlikely that Labour will expend vital political capital arguing for it now that they are on the brink of government. The ground has shifted, but has it left basic income behind?

[1] http://www.bsa.natcen.ac.uk/latest-report/british-social-attitudes-34/key-findings/context.aspx

[2] http://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/news-parliament-2015/citizens-income-report-published-16-17/

[3] See https://medium.com/economicsecproj/the-swiss-universal-basic-income-vote-2016-d74ae9beafea

http://www.comresglobal.com/polls/itv-news-index-green-party-poll/

https://today.yougov.com/news/2014/01/09/poll-results-guaranteed-jobs-and-basic-income/

Incidentally, over-65s were excluded from the sample of a poll that claimed 68% of Europeans supported basic income https://daliaresearch.com/blog-31-of-europeans-want-basic-income-as-soon-as-possible/

[4] http://www.labour.org.uk/index.php/splash/so-called-garden-tax

References

Hirsch, D. (2015). Could a “Citizen”s Income’ Work? JRF Programme Paper

Martinelli, L. (2017). Exploring the Distributional and Work Incentive Effects of Plausible Illustrative Basic Income Schemes. IPR Working Paper

Reed, H., & Lansley, S. (2016). Universal Basic Income: An idea whose time has come? Compass. Retrieved from http://www.compassonline.org.uk/publications/universal-basic-income-an-idea-whose-time-has-come/

Torry, M. (2016). An evaluation of a strictly revenue neutral Citizen’s Income scheme (No. EM 5/16). Retrieved from https://www.iser.essex.ac.uk/research/publications/working-papers/euromod/em5-16.pdf

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