Labour’s embrace of Universal Basic Services “can renew social contract”

The Labour Party’s adoption of key elements of the Institute for Global Prosperity’s proposal for Universal Basic Services can help renew the UK’s social contract in the age of automation, its originators have said.

Following the launch at the Labour Party Conference in Brighton on Monday 23rd September, of a new report entitled ‘Universal Basic Services: The Right to a Good Life’, Institute for Global Prosperity director, Professor Henrietta Moore, said the move showed “a commitment to enhancing the living standards of millions in an increasingly insecure economic climate”.

The Labour Party’s report, announced by Shadow Chancellor John McDonnell in his conference speech today, praises the work of the IGP in developing the proposition for Universal Basic Services, concluding: “Universal public services, free at the point of use, will be one of three central pillars of the economic programme of the next Labour Government. Alongside the other two – structural reform to create good jobs, reduce the cost of living and broaden ownership and democracy and social security to provide a cash safety net for those who need it – universal public services are how we will create an economy that serves us instead of making us its servants.”

Universal Basic Services (UBS) is a radical proposal to extend the principles behind the NHS and public education to provide a range of other essentials free at the point of need. Its key aim is to reduce the burden of costs borne by individual citizens to achieve a basic standard of living, thereby increasing their wellbeing and ability to participate in society. It would build an increased sense of social solidarity by reducing inequality and stop individuals and communities from feeling ‘left behind’ in the face of economic challenges.

The Labour Party report adopts some of the IGP’s recommendations, which in full include a massive expansion of social housing, free bus travel, meal provision for those most at risk of food insecurity and basic phone and internet access. The total cost of £42bn – representing just 2.3% of UK GDP – could be fully funded through changes to the Personal Allowance, making the proposal fiscally neutral.

The Institute for Global Prosperity has more recently suggested ways of extending UBS to cover social care for the elderly and free childcare provision. Both ideas have since been adopted as official Labour policies.

The services themselves might be provided publicly, by private companies, or by the voluntary sector and would need to be democratically accountable locally to prevent state monopolies.

Those in the lowest income decile would benefit the most – saving the equivalent of £126 per week in costs as a “social wage” if they accessed all the Basic Services. A “social wage” is the value of a public service to an individual citizen, expressed as replacement for financial income.

Professor Henrietta Moore, Director of the UCL Institute for Global Prosperity, said:

Andrew Percy, Director of the Social Prosperity Network at the IGP, added:

UBS in detail

The Universal Basic Services (UBS) modelled in the report build on existing universal healthcare, education and legal services. They would enable every citizen to live a ‘larger life’ by ensuring access to safety, opportunity, and participation. Reducing the Personal Allowance to £4,300/year (leaving the current benefits system in place as is) would make UBS revenue-neutral and be highly progressive.

• Shelter: doubling the existing social housing stock by funding the building of 1.5 million new social housing units using 30-year Treasuries at current market rates. The new units would be offered on a needs basis at zero rent. All social housing would be exempted from Council Tax and include a utilities allowance. With a seven-year building schedule the costs start at £6.1bn and finalise at £13bn from the 7th year onwards.
• Food: A food service would provide one third of the meals for the 2.2 million households deemed to experience food insecurity each year. This would add to existing programs such as free school meals and meals on wheels, providing 1.8 billion meals at a cost of £4bn per year.
• Transport: Extending the existing Freedom Pass (currently for citizens over the age of 60) to everyone for bus services, providing access to free local public transport services that enable citizens and residents access to jobs, education, healthcare and participate fully in their community – all of which are currently under threat. Assuming an increase in use of 260% the cost would be £5bn per year.
• Information: To promote digital inclusion, this covers the cost of basic phone, Internet and the BBC TV licence fee. This would enable access to work opportunities and other services, as well as participation in our democracy as informed citizens.This is the most expensive service considered, with an annual budget of £20bn, however it also delivers universal value across all income groups and keeps all citizens connected in our increasingly digital world.

For more information, please visit the UBS hub.

Read our UBS report, here.