Furlough was a radical success. Now let’s talk about a universal basic income

With an estimated 188,000 job vacancies in the hospitality industry, pub and restaurant owners are starting to complain about the furlough scheme – specifically, that it has made people lose the will to work. That is unlikely: furlough covered only 80% percent of wages, and given what a struggle it is to keep afloat even on 100% of a pay packet (17.4% of working households are now in relative poverty, the highest number this century), anyone on minimum wage would probably prefer work to furlough. Arguably, the million people who have left the UK since Brexit might have more to do with the labour shortage than our new collective indolence. Workers can always be found if the wages and conditions are right, so it’s possible that looking for the answers in the shortcomings of individual characters is a blind alley.

It’s interesting, though, because this is the argument always used against universal basic income (UBI): the radical idea of replacing some or all means-tested benefits with a tax-free, unconditional, non-contributory flat amount given to everyone in the country (including children, though at a reduced rate and paid to parents; most modelling puts this as a similar sum to child benefit, pre-coalition government). Why would anyone work if they didn’t have to? Before we get to the counter-arguments, both behavioural and practical, pause a moment to consider just how radical furlough has been.

From David Cameron’s environmental agenda to Boris Johnson’s “levelling up”, the Conservatives are often said to have parked their tanks on Labour’s lawn. It’s amazing how often they get away with this: saying whatever is expedient in the electoral moment, abandoning it when it suits them and, for their final trick, doing the exact opposite. What they’re actually parking is a papier-mache tank for just long enough that the grass dies and Labour forgets where its lawn ever was or how to describe it. You can’t even blame the Tories for trying it on, only the schmucks who take them seriously. As George Bush would say, fool me once …

However, the furlough scheme was different in the sense that it actually happened. It cost real money – £61.3bn – and it made a real material difference. More consequentially, if you can call 60bn quid less than entirely consequential (hell, if Rishi Sunak can, so can I), it embedded a principle of shared responsibility: if millions are unable to work due to an emergency, there is a collective duty to support them until normality is restored.

A parallel principle was also established: that the support isn’t “the least you can get away with”, but rather “the most you can afford”. The Conservatives didn’t change all their spots: sick pay was kept so low that it left people in non-furloughed work unable to self-isolate, imperilling thousands of others. Nevertheless, there is a scissor pressure here on the public debate, with “money is no object” from one direction and a reconfiguration of need from the other; those without wages are people just like us, only with less money. They are not morally compromised by dint of their hardship. This will seriously complicate the modern benefits narrative.

As Stewart Lansley and Howard Reed, the nation’s foremost experts on UBI noted in April last year, furlough and the pandemic generally had an almost immediate impact on perceptions of the policy: 84% of the public, as well as 110 MPs and peers across seven parties, supported the idea of a “recovery basic income”, while worldwide there was a surge of interest in an “emergency basic income”. Spain became the first country in the world to roll out a form of basic income on a permanent basis, while Hong Kong, Japan and the US have since made significant one-off payments. Wales, meanwhile, has announced a UBI pilot scheme.

The argument for UBI runs thus: the existing benefit system, devised in a single-breadwinner, job-for-life era, no longer meets the needs of a population increasingly dependent on zero-hours and short-term contracts. The flat amount would not be so great as to obviate work, only to forestall desperation. It would create an upward pressure on stagnant wages, restore bargaining power to workers, and encourage innovation, education and entrepreneurship. Various pilot studies have shown only a slight decrease in paid work – in a basic income pilot conducted in the 1970s in Manitoba, Canada, work hours only decreased among new mothers and teenagers.

Affordability depends on some variables, such as the rate the UBI is set at, the number of benefits it would replace and what other changes were made alongside it. Certainly, if you were to undertake such a total reform of the benefits system without looking at housing costs, the impact would be muted. Conversations so granular were only had at the very fringes of the political debate before the pandemic. It was simply considered too radical to think about – too radical even for Labour’s 2017 or 2019 manifestos, though John McDonnell did talk of a UBI pilot. When you think of how their relatively mild “free broadband” pledge went down, that’s understandable.

What furlough has done, then, even if it was by no means universal, and was, by its own design, reverse-means-tested (so the more you had before, the more you got), is take the brakes off the discussion. More important than any of the practical objections – this would stop people working, why give money to those who don’t need it, won’t it dampen the competitive spirit that drives the economy? – was the wall of impossibilism. That defence has now been breached, and the debate can begin in earnest.

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