Sunak won’t tackle the cost of living crisis. A basic income can.
Yesterday, Chancellor Rishi Sunak announced this government’s spring budget. With living standards set for the largest single-year fall since records began in the mid 1950s, the government will oversee a 5% fall in the real value of welfare benefits through 2022–23. It’s hard not to despair.
People need financial security. And that’s why a basic income is increasingly relevant to our current political moment. We need a national Basic Income Conversation — right up to the halls of power.
Sunak started his statement emphasising the costs to the UK economy of sanctioning Vladimir Putin’s regime for the invasion of Ukraine. Once again, the government casually reassigned responsibility for the suffering their policies have caused.
It’s past time for change. We can all see the problems — let’s talk solutions.
A basic income means financial security for everyone, guaranteed, forever. It’s money you can spend on whatever you want. It’s unconditional, meaning you don’t have to work or make any promises to get it: there are no strings attached. It’s regular, so you know when the next payment is coming, and paid to the individual, not the household — so each person gets their own basic income. A basic income is universal: everyone gets it.
By comparison, the measures announced yesterday barely scratch the surface of the cost of living crisis.
Here’s a quick breakdown of the headline policies.
The government is cutting benefits. Again.
Sunak announced a promise to cut income tax in 2024. Coming from the party that has overseen the largest tax rises in decades (and lowest corporation tax rates), it’s hard to swallow. A cut in two years also fails to make a dent in the financial hardship people are experiencing now. Moreover, more than 20% of households don’t pay income tax. That’s 42% of adults in the UK that this policy doesn’t help in the future, never mind now when folks are turning down potatoes at a food bank because they can’t pay for the energy to cook them.
At 6pm yesterday, there was a 5p cut in fuel duty. On this, there were some strategic omissions from the statement. There was no comment on the money taken from the public purse for financial support for fossil fuel companies (a bill to the tune of £40 billion in 2020–21). There was no comment on reducing or capping public transport fees. There was no comment on the fact that this is a policy that disproportionately benefits higher earners. Sunak’s meagre fiddling is trying to rise to the challenge of issues that will only be solved with systemic change — root and branch.
Those policies were mentioned in the toplines. However, it’s worth getting into the glaring omission of any change to means-tested benefits. The benefit uprate is set at 3.1%. Inflation is already above 6%, set to soar above 7% in the coming months, and will potentially peak at 9%. That’s a wholesale cut in benefits in real term values. This will impact the incomes of millions of households by at least £500 annually.
During a cost of living crisis, this government is cutting benefits. Again.
In April, we’re expecting average household bills to rise by 54%. That means almost £2,000 more a year spent on the necessities at home. We’re also potentially expecting that to rise in October again to end the year with households spending about £3,000 a year on bills. All while the projected operating profit margins for gas and electricity distribution networks in 2022 are 41.2% and 50.7% respectively.
Released on Tuesday, analysis by the Jubilee Debt Campaign of Bank of England data shows that the number of UK households struggling with large debts increased by a third in 2021, even before the winter rise in energy prices and the removal of the £20 uplift in universal credit payments.
Last month, Shelter released a report showing that 14,000 renters face evictions due to the rise in the cost of living, with nearly a quarter of renters polled behind on their rent, nearly a third cutting back on food and one in six behind on energy bills already.
Financial security for everyone
It’s in times like this that the appeal of basic income becomes crystal clear. Again, a basic income would mean financial security for everyone, guaranteed, forever. In a world where insecurity is the new normal, it’s time to get serious about providing real financial security.
That’s not to say that there aren’t big questions about this big idea. But to find answers, we have to have a conversation with as many people as we can, particularly people who are mandated to represent our political interests.
With the UBI Lab Network, the Basic Income Conversation — powered by Compass — is the co-secretariat of the Cross-Party Parliamentary and Local Government Working Group on Universal Basic Income (CPPLG), and we need your help.
The CPPLG aims to produce work to advocate for policy positions, basic income pilots and the need to test alternatives to the current system. The aim is to influence the wider debate around basic income and social security in the UK, to be transformative in bringing about positive change.
As their constituent, ask your representative to join the CPPLG. Ask them to engage with basic income as a response to the cost of living crisis.
Ask them to take an action that would help provide a better future. A future where food bank use doesn’t increase 128% over 5 years while the companies providing basic necessities take home gargantuan profits — with no rise in corporation tax.
Lena Swedlow is Campaigns and Projects Officer at Compass and the Basic Income Conversation.
Help spread the basic income conversation by asking your MP to join the CPPLG on Universal Basic Income.