The Fabian Society, a prominent left-wing think tank in the UK, has published a book-length report on recommendations for improving the country’s social insurance, especially for non-pensioners (“For Us All” by Andrew Harrop). Among other topics, the report discusses–but not does not endorse–basic income. As an alternative, its author recommends a universal (but not unconditional) “individual credit” for adults.

In a Fabian Society report published on August 31, general secretary Andrew Harrop advises that the UK not replace existing social insurance benefits with a basic income (which he describes as a “single flat-rate payment for each individual”). His main concerns are that a basic income “would create many losers and would not reduce poverty or improve the incomes of those with least today,” unless there were to be a substantial increase in tax revenue, and that it would not eliminate the need for certain means-tested benefits, especially those related to housing (p. xix).

Harrop does, however, propose a type of universal cash payment that he calls an “individual credit”. All adults would be eligible to receive this payment in addition to Universal Credit payments and child credits for primary guardians. Universal Credit, a centerpiece of Britain’s current system of social insurance, is means-tested — and Harrop believes that retaining and supplementing the policy, rather than replacing it, “would significantly reduce poverty and increase low and middle incomes” (p. xx).

It is worth noting here the fact that the individual credit does not replace all means-tested benefits does not, in itself, imply that it is not a type of “basic income”. In principle, at least, basic income — a universal and unconditional cash payment paid directly to individuals — could be distributed in addition to universal credit or other conditional and means-tested benefits. Indeed, Compass, another British think tank, has recently recommended such a “modified scheme” as a way to introduce a universal basic income in the UK.

However, there are still important differences between Harrop’s individual credits and a basic income. Notably, the scheme that Harrop proposes is not strictly unconditional. He states that “Eligibility for the adult credit should depend on paying direct taxes or on productive participation in society” (p. xx). He elaborates on the “participation requirement” in the section on individual credits:

As a start, it [the credit] should only be available to people who both have a national insurance number and are on the electoral register (or an equivalent register for people without the right to vote). This would promote political participation and reduce the risk of fraud. Except for people with significant disabilities, receipt should also be dependent on either paying a certain amount of income tax or national insurance, or on learning, parenting, caring, job search or work preparation. The policing need not be particularly onerous, but people who refused the offer of a guaranteed job or educational place, after a significant time without working or paying direct taxes, should not continue to receive the credit (pp. 144-5).

Thus, unlike a basic income, the individual credit does carry a work requirement — even if a comparatively lenient and flexible one, which allows exemptions for students, parents, and caregivers.

At the same time, Harrop does not rule out basic income as a potential long-term goal. Indeed, he describes his own proposal as one that might provide a “gradualist, ‘Fabian’ route to creating a full basic income in the distant future”:

It would at least put in place the machinery that would make it possible to make larger universal payments should it be required, becoming an insurance policy in the event of a structural decline in the total hours of work, or of a severe recession which required a fiscal stimulus to support household spending (p. 143).

But paving the way for a basic income is not Harrop’s own goal in proposing individual credits. On the contrary, he goes on to say that “it is better to think of individual credit as ‘child benefit for adults’ not a step towards a basic income – i.e. a universal component in a hybrid system, which also includes contributory and means-tested elements” (pp. 143-4). Elsewhere, he enjoins policymakers to “focus on practical, incremental policy changes which embody something of the spirit of the basic income idea, but make sense as reforms in themselves” (p. 139).

Indeed, Harrop himself seems ambivalent as to whether basic income is a desirable himself endpoint — at one point stating that the case has not yet been settled either way (cf. pp. 137-9). An appendix to the report includes a summary of the reasons for and against a basic income (see Appendix 7, on final page).

In a September 1 interview with The Independent, Labour Party shadow chancellor John McDonnell — a long-time supporter of basic income — referred to the Fabian Society’s report when discussing his intention to continue to push for a universal basic income in the UK:

The Fabian society has just introduced a report today which is looking at reforms to the welfare state and it’s recommending a form of initial basic income for us to explore so we’re going to take that into account. When we look at the experiments that are taking place across Europe at the moment we’ll review those then consider what are options are.

Thus, McDonnell does seem to view Harrop’s proposal as route to basic income — even if Harrop himself deemphasizes this potential facet of the policy. (In the same set of remarks, McDonnell suggests that he also views child benefits, in the form of unconditional cash transfers to primary caretakers, in much the same way — that is, as a type of “initial” basic income.)

The Fabian Society is Britain’s oldest political think tank, founded in 1884. Today, it has approximately 7000 members and 70 local chapters. The society was one of the founders of the UK Labour Party, although it is not organizationally affiliated with the party today.

It summarizes its political mission as follows:

Our commitment to Fabianism means we believe in the fight against inequality, the power of collective action and an internationalist outlook. We believe in social progress, evidence, expertise, rationality and long-termism. We advocate gradualist, reformist and democratic means in a journey towards radical ends. We are a pluralist movement and create space for open debate.

The Fabian Society’s sister organization in Australia (not formally affiliated) recently sponsored a debate in Sydney on the topic of whether Australia should adopt a universal basic income.

To learn more about current basic income schemes proposed in the UK, see the compiled list at Basic Income UK.

References:

Andrew Harrop, For Us All: Redesigning social security, for the 2020s, Fabian Society, 2016.

Ashley Cowburn, “John McDonnell: I will win the argument to give every citizen in the UK a basic income“, The Independent; September 1, 2016.

See also:

Jon Stone, “Tax free allowances ‘must be axed to pay out modest basic income’, radical welfare blueprint suggests“, The Independent; August 30, 2016.

Reviewed by Cameron McLeod

Photo of Fabian Society conference attendees CC BY 2.0 Fabian Society

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