Paths to universality

“Universality of protection, based on social solidarity’’ is one of the principles of social protection recommended by the International Labour Organization (ILO). It recognises “social security is an important tool to prevent and reduce poverty, inequality, social exclusion and social insecurity”. Overall, the British social security system has moved increasingly in the opposite direction.

In particular, the gradual withering away of social insurance benefits for people of working age has accelerated, as universal credit cements means-testing ever more firmly into social security’s foundations.

And, under the Tories, child benefit’s role as the cornerstone of financial support for children has been weakened by cuts in its real value and the introduction of a ‘high income charge’.  So, in response to the question posed in Andrew Harrop’s introductory blog on whether we have the right balance between means-testing, universalism and contribution at different stages of our lives, my answer is; we have the wrong balance.

To return to the ILO’s principles requires an understanding of social security’s role, not just as poverty alleviation, as implied by a means-tested safety net model for ‘them’, but as a means of providing us all with economic security through the social means of shared protection against a range of risks and contingencies that we might each face through the course of our lives – in other words poverty prevention. From a gender perspective, this also means recognition of the importance of individual financial autonomy, as argued in Mary-Ann Stephenson’s blog.  The question of adequacy enough to allow people to live in dignity and decency in line with human rights principles is dealt with by John Veit-Wilson in this series.

If we are to shift the axis back towards greater universality, a first step would be to reinvest in a more generous, genuinely universal child benefit scheme. This is the focus of the ‘give us five’ civil society campaign in Scotland, calling for a weekly £5 top up to child benefit.

For adults of working age there are broadly two paths to universal social security: a revitalised, modernised social insurance scheme or some form of basic income.

A revitalised social insurance scheme would have to be much more inclusive and flexible than the existing system, particularly from a gender perspective. This approach was favoured in the 1990s by John Smith’s Commission on Social Justice, but it was the section of the recommendations that was largely ignored by the incoming Labour government at the time. It would be worth revisiting. However, much has changed since then, and there is a question mark over how far social insurance can provide adequate even quasi ‘universality of protection’ for many in today’s – and even more so tomorrow’s – insecure labour market.

This is one reason why there is growing support internationally, across the political divide (reflecting differing motivations) for the idea of a basic income. Many valid questions have been raised about a full-blown basic income scheme, including how well it could meet the costs of disability without compromising the simplicity which is one of its attractions. Most proponents now therefore acknowledge that basic income can’t sweep away all existing benefits in the foreseeable future.

One option would be to start with a partial basic income, which would provide a floor under the existing social security system, without claiming to provide an alternative to it.

Compass will soon be publishing a possible blueprint for such a scheme designed by Stuart Lansley and Howard Reed. The key move is to convert personal tax allowances into an unconditional, individual cash payment. This has the double advantage of ending what Andrew Harrop has dubbed the ‘regressive universalism’ of current government policy, which wastefully prioritises increasing the real value of tax allowances, providing no benefit to those too poor to pay income tax and limited benefit to income taxpayers on universal credit.

The Compass scheme is designed to be introduced in a single parliament. Rather than a geographically limited pilot scheme, which is difficult in the context of a (rightly) centralised social security system and which experience suggests can all too easily lead nowhere, this would in effect provide a national pilot scheme that could inform debate as to whether to go further towards a fuller BI scheme. Lansley and Reed calculate that the short-term gains would include a reduction in poverty, inequality and reliance on means-testing.

I write as someone who has long been ambivalent about the idea of basic income, particularly when some of its proponents have waved it around like a magic wand that will solve all the problems of the current social security system at a stroke. But in its combination of universality, non-conditionality and individual-based benefits, a partial basic income does offer a modicum of genuine security for all (or most[i]) members of society in an increasingly insecure world.

[i] Whether its universality would include migrants, and on what basis, is a question that hasn’t yet been resolved.

This blog is part of our Poverty and social security: where next? series. Read more about the project here.