Universal Credit has never been enough to support families, we need a universal basic income
This crisis calls for a revolution in thinking, writes Drew Hendry MP. | PA Images
4 min read
When this pandemic ends, the economic recovery is going to be long and hard. A universal basic income will help settle economic stability and lead to increased spending in local economies, supporting businesses and communities.
People feel happy when they are in control of their own lives. The opposite of that feeling is one of not being in control – a state we have all come familiar with as we face this silent enemy together. Indeed, feelings of being powerless, fearful or anxious are now commonplace in every household.
Naturally, people are fearful of the risks the virus poses to them and their loved ones. They are also acutely aware of the clear and present dangers to the Health Service, and the impact poor controls will have on everyone. Then, there is the anxiety associated with wondering how they can pay the bills – a worry that has, too, become commonplace.
What will happen if they can't make their rent or what happens when the mortgage holiday is over?
Will their job still be there after all this – that is if it hasn't already gone.
UK Government schemes such as the 'Job Retention Scheme' have been a welcome lifeline to a lot of people. Their financial woes are on ice because they have a temporary safety net.
Yet still, insecurity remains. Sure, they can benefit from 80% of their wages, but people don't routinely save 20% of their salaries. With their household income reduced, any savings on regular transport costs can quickly be eaten up by higher domestic bills.
And they are the lucky ones. Just think of what it's like for those who rely on seasonal work, people who have been working in the gig economy and the newly self -employed. They find themselves having to live off the woefully inadequate 'Universal Credit' social security payment. That's after they wait over two weeks for a callback, with a further five-week wait for payment.
Universal Credit has never been enough to support families. It simply wasn't designed to be and, as the legions of new claimants are finding out, it doesn't scratch the surface of living costs. They rightly question how they are going to feed their families on the pittance on offer.
According to the Office of National Statistics, the average UK household credit cards and personal loans debt in 2019 was £9,400 – and you guessed it, the highest amount of debt lies predominantly with the lowest paid.
Encouraging people and businesses to substitute wage income with loan debt is not the right approach by any Government. Loans need to be paid back and with an uncertain future ahead of us; many people will simply be unable to afford to do so.
Instead of exacerbating or adding to the UK's current unequal society, we need a solution to propel us all out of inequality. A universal basic income is the start of this journey, and the need is pressing.
A universal basic income will see everyone through the emergency period and will help us cope with the current economic inactivity. It will also get us through the recovery phase as we strain our collective muscle to get our economy working again.
Critics of a universal basic income tell us it will disincentivise work. They believe it will make our workforce too lazy to seek employment. This crisis calls for a revolution in thinking. In our collective difficulties, we have found our mutual societal dislike of isolation, and there is now a greater understanding in our society of what those on low incomes or in poverty face every single day.
Most people want to work, to engage, to learn, and the existence of a basic income will not stop that. It can, however, enable our people and our economy to recover more quickly and effectively than the other more seemingly more accepted routes of financial stimulus.
A universal basic income offers safety, security and dignity.
When this pandemic does end, the economic recovery is going to be long and hard. Our journey to a future of even greater automation of traditional workplaces will hasten. The market place will adapt, as will the way we interact with it.
A universal basic income will help with this transition. It will settle economic stability and lead to increased spending in local economies, supporting businesses and communities.
Putting money in peoples pockets also provides a platform for more productivity – removing low-level risks around entrepreneurship and new small business development.
The hard fact is, that to regain any semblance of normal life, within any reasonably acceptable timescale, we are going to need to commit to structural support for our people. A universal basic income is the right way to make sure that path to recovery is both achievable and fair.
Drew Hendry is the Scottish National Party MP for Inverness, Nairn, Badenoch and Strathspey and SNP spokesperson for BEIS.
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