UBI, Defence spending and Coronavirus

COVID 19 has profoundly exposed the failures and immorality of neoliberalism and the fragility of full-on globalisation. To save lives and minimize pandemic deaths directly or indirectly, everyone has had to follow ‘social distancing’ measures. However, this has also meant that many people are struggling financially to support themselves and their families due to loss of income. No social distancing policing will be effective if people have to make the tough choice between starving at home or getting infected by the virus at work.

It’s become clear that people need government assistance now if they are to survive. We also need to make sure the economy can bounce back after the pandemic is over and not enter into a prolonged depression because productivity capability has been decimated facilitated by inadequate government policies. Two keys are essential: 1. people need to have adequate financial support to follow social distancing measures without worry. 2. jobs have to be retained so people can go back to work straight after this crisis is over.

Number 2 is relatively politically uncontroversial – many countries have announced measures to financially support companies to “retain jobs” throughout the pandemic, ie not firing employees to save their bottom line. Number 1 is however a different story. There is an obvious solution but it was one that kept getting rejected by political leaders for all the wrong reasons: UBI is a ‘disincentive to work’ and ‘the well-off do not need it.’

These objections are beside the point because it has been shown that UBI has little to no impact on recipients’ likelihood of undertaking paid employment. Furthermore, common sense tells us that ‘not enough income for survival’ is a huge incentive for people to seek employment/work. When the government’s social distancing measures want non-key-workers to stay at home, they have to provide financial assistance so everyone has enough to survive this pandemic, especially to low-laid workers who usually cannot work at home and have minimal savings to fall back to. One of the main purposes of tax is to redistribute income and wealth within the economy. UBI is a direct and straightforward financial assistance from government to people without bureaucratic delay (inherent in means-tested benefits, eg. Universal Credits) simply because it is universal. The speed of this pandemic has made many people already struggle to survive even for the next few weeks. Any delay in government’s financial assistance is a political choice that will risk lives of people in need. Whether the well-off needs UBI is a question that can be easily addressed by a fair tax system.

Meantime Citizens Advice proposed a “crisis minimum income” of at least £180 a week so everyone has enough money “to protect their own health and the health of others.”  It said a single-person household needs £960 a month to avoid getting into difficulty, and a couple with children £1,700. Millions stand to lose earnings as a result of social distancing measures. The charity predicted people would typically be spending £27 less a week on transport and £19 less on leisure, but that food and energy bills would rise.

“The government must set a crisis minimum income of at least £180 a week so that people can afford the basics while they are unable to work,” said Dame Gillian Guy, the chief executive of Citizens Advice. “Increasing sick pay and support from the benefits system will mean people don’t have to face the impossible choice of working while unwell or ignoring guidance to self-isolate or socially distance.”

Daniel Susskind, an economist at Balliol College of Oxford University, writes in the Financial Times that universal basic income is “an affordable and feasible response to coronavirus”. He recommends every adult in the UK should be paid £1,000 a month to provide “a direct and instantaneous burst of financial relief” to the many people across the UK who are worrying about making ends meet during the pandemic.

There are 52m adults in the UK, roughly 90% are British citizens. Handing out £1000 per adult (a virus does not respect nationality so why limiting to only citizens) would cost the UK government about £52bn a month. As Dr Susskind pointed out, it will only be a small fraction of the nearly £500bn bailout by the UK government during the 2008 global financial crisis. This universal basic income (UBI) will only be temporary. Most experts expect the pandemic to (hopefully) ease in the summer if not before (most flu/corona  viruses tend to hibernate during summer months) so we are looking at up to 3-month emergency funding between £52bn and £156bn – still less than a third of bank bailout in 2008.

How does this compare, let’s say, to an issue close to our hearts here at Tipping Point North South – global defence spending? Here in the UK, under HM Treasury (HMT) accounting, defence spending was around £48.7 billion. It is pretty clear now that the two biggest threats to our national (and international) security are the climate emergency and global pandemic, (not omitting nuclear war by accident or design) and our militaries are, in truth, ill-prepared to deal with either. We have to ask, are we getting value for money? Are we actually ‘protected’ from the biggest threats to our human security? And the trillion-pound question – what is our military for and what’s been the purpose of our defence spending? The UK alone has spent nearly £1 trillion on defence in the last two decades, supposedly to counter global terrorism threats since that fateful date, 11/09/01. Maybe the date on which the British Prime Minister announced the national lockdown because of the Coronavirus crisis – 23/03/20-should be the date that finally made us turn our heads around and readdress our priorities.

If we are going to spend another £1 trillion in the next 20 years, it simply cannot be wasted on the same old ‘defence paradigm’ and ‘national security threats’ with no mention of climate breakdown or pandemic. COVID-19 is the wake-up call that shows us why we urgently need ‘defence’ to address climate emergency and global pandemic.

But if this is too much to ask of our leaders just yet (though we need to get there), a £1000 yearly UBI for the next 20 years will cost the same £1 trillion. After all, once we get our money back, we can always find better uses for it.

HC, 27/03/20

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