AS well as the appalling death toll in the UK, the coronavirus outbreak has resulted in the biggest economic shock since 2008. The response to that recession was a massive bailout of the banks, with little support for individuals or small businesses, and led to a decade in which the rich tripled their wealth while ordinary people faced insecure work and low pay.
Tory austerity left health care and social care ill-prepared to face the current crisis, while the universal welfare state, as envisaged after the Second World War, has been replaced by a harsh and bureaucratic system that presumes against the individual and considers financial difficulty a personal failure rather than a misfortune.
There simply is no free market or capitalist solution to the Covid-19 epidemic. While the Chancellor’s attempts to provide Government funding to businesses and individuals have been welcome, thousands of people are falling through the cracks. The plan to fund 80% of the wages of furloughed staff excludes those who happened to change jobs at the beginning of March and, even after lobbying for support for almost five million self-employed workers, almost half will still not qualify.
From the start of the outbreak, SNP MPs have called for the establishment of a Universal Basic Income (UBI), to ensure everyone is supported through this unprecedented crisis, with consideration of it as a replacement for aspects of the current benefit system in the longer term. After the epidemic recedes, and the lockdown is eased, UBI could also help inject money into local economies to get them moving again.
Any UBI system should be simple so that, like removing prescription charges, the money benefits citizens directly rather than funding bureaucracy. Making it taxable means up to 40% would be retrieved from those who are well off. While there have been several pilots, including in Scotland, the income levels have usually been set below comparative welfare benefits, thereby failing to achieve the key goal of relieving hardship or supporting someone to embark on a new business.
Finland’s UBI pilot scheme resulted in many people re-training in fields more suited to their individual talents and interests. Changing roles and skills will become increasingly important in the modern workplace as automation and technological advances accelerate.
Some fear UBI would incentivise idleness but the valued bedrock of pensioners, volunteering every day in our communities, demonstrate this is simply not the case. Like the state pension, it is unlikely that UBI is going to finance the high life, so most people will also work but they may be more likely to do so part time, sharing out both employment and leisure more equitably.
Most importantly it could help tackle the scourge of poverty.
Even before the virus crisis, poverty was on the rise among pensioners, people with disabilities and children, due to policies such as raising the state pension age, cuts to disability benefits and the four-year benefit freeze.
Universal Credit, with its unforgiving five-week initial wait, has led to soaring rent arrears, homelessness and food bank use, while the two-child limit on tax credits has hit larger families and lone parents.
Poverty is the biggest driver of
ill-health and the fruits of austerity are clear in falling life expectancy and rising infant mortality in England – a measure more commonly used to assess progress in developing countries.
Having had the same levels of infant mortality in 2014, the incidence in England has risen in parallel with child poverty while in Scotland it has been driven down by a range of anti-poverty measures, such as building affordable homes, and mitigating the Bedroom Tax, as well as the provision of Best Start grants and Baby Boxes.
Because of these policies, Scotland has the lowest average child poverty level of the four UK nations but the underlying welfare cuts are still driving more families and children into hardship. Growing up in poverty impacts on a child’s development, learning and life-long health, with the state often picking up the financial costs and the poorest children destined to die nearly 10 years younger than their wealthier counterparts.
The current crisis has shown up the stark reality of the current economic model, and the gross inequality of the UK, but it is clear the UK Government simply wants to return to “business as usual”, with wealth and power in the hands of a small elite.
Once the Covid-19 crisis is controlled, we have to decide what kind of economy we want to rebuild – one based on inequality or inclusion, on consumerism or sustainability. Prioritising the physical, mental and environmental wellbeing of all our citizens is simply not on offer as part of the UK. For that we need the powers of an Independent Scotland and that need for has become more urgent than ever.
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Callum Baird, Editor of The National
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