Tuesday columns for Newcastle Journal by George Hepburn

Month: March, 2017

There’s nothing wrong with the poor that money cant put right: the case for universal basic income.


Richard Nixon came within an ace of eradicating poverty.  If fate had dealt Nixon a kinder hand, he would have established the principle that everyone is entitled to what we now call a universal or unconditional basic income . History would have deemed him a hero not a villain.

In a series of pilots throughout the United States, everyone was given a basic income whether or not they were in work. The results showed that beneficiaries worked as hard as before and had more time for child rearing and family life. Educational attainment increased and health improved. The leading economists of the day said the scheme was affordable and would eventually pay for itself through reductions in the public purse. There was widespread public support for a universal income scheme to be rolled out.

And so in 1969, Nixon introduced his Family Assistance Plan for a modest basic income describing it as “the most significant piece of social legislation in our nation’s history.” The nation which had just put a man on the moon was all set to establish the principle that money was a basic right.

The Bill passed the lower house with a large majority but got bogged down in the Senate. It was “the most expansive welfare legislation ever handled” according to one Republican senator. Nixon reintroduced the Bill in a revised format  the following year but it never got on to the statute books and was finally shelved in 1978.

A similar scheme was tried in the 1970s  in a small town in Canada where 1000 families, about 30% of the population, received a cheque each month to raise them above the poverty line. The Mincome project was  abandoned when a conservative administration came to  power four years later.

The evidence from  Mincome was stored away in cardboard boxes and only analysed recently. It also showed that total hours worked were much the same, birth rates dropped and school results improved.  Hospital admissions dropped, domestic violence decreased and mental health improved.

The  conclusion  from these studies is that there is nothing wrong with the poor that putting money in their pockets will not cure. We know too that  living a hand to mouth existence for any length of time puts people under pressure, restricts their options  and leads  them to make poor decisions.

Had the United States, the world’s worthiest nation, gone down this route, there’s little doubt that other countries would have followed suit, according to Rutger Bregman, whose new book ‘Utopia for Realists’  retells the stories of the North American experiments and makes a passionate case for universal basic income and other radical ideas too.

The other stark conclusion is that universal income  is political dynamite. It is difficult to shake off the dogma, Bregman argues, that if you want money, you have to work for it. It is much more comforting to hang on to the belief that the poor are feckless, lazy and workshy  despite all the evidence.

Margaret Thatcher’s view of  poverty  as a ”personality defect”  still permeates our benefits system today. Anyone receiving Job Seekers Allowance or Employment Support Allowance  will be assessed for their capability for work and expected  to take part in job training schemes. They will be financially penalised if they do not take part in good spirit.  An army of civil servants are unnecessarily employed at great expense to cajole claimants into work whether or not the jobs exist.

When the self employed  were threatened with increased national insurance payments after the Budget,  they were overnight dubbed as “strivers”  as opposed to the “shirkers” or “scroungers” who claim benefits. It demonstrates how desperate we are to keep the poor in their place. To reinforce the point, universal credit and tax credits will be cut next month by £12bn to make living on benefits even more uncomfortable.

Rutger Bregman goes on to argue that the days of relatively full employment  are numbered as artificial intelligence takes over. The ethos of going to work will be undermined. Economists say that the factory of the future will only employ a man and a dog. The man will feed the dog and the dog will stop the man fiddling with the machinery.

Only the highly educated, the residents of Silicon Valley and the out of power politicians will have jobs. “If we want this century to be the one in which we all get richer” Bregman argues” we’ll need to free ourselves of the dogma that all work is meaningful.” The gulf between the rich and poor will dramatically increase and a far more radical way of redistributing money will be needed.

Utopia is an aspiration rather than a blueprint in Bregmans’ inspiring book.  When we reach the land of plenty, according to Oscar Wilde, we should gaze at the farthest horizon and rehoist our sails.

Bregman may fall short on practicalities but he puts forwards the big ideas that scare off mainstream politicians. A further experiment in universal income is underway in Finland. There are plans to try it in Glasgow too.  Matthew Taylor may commend it in his forthcoming  review of work. Is it an idea whose time has come round again?  Richard Nixon must have regretted losing his place in history. Lets not lose our place too.

published in Newcastle Journal 21st March 2017





Dont let the nasty party define the new normal

After the turmoil of the last few months, life is getting back to normal. At Sotheby’s, a landscape by Gustav Klimt has sold for £48m, well above the expected price. The art world  breathed a sigh of relief. The cheque books are coming out again.  It is reassuring too that revenues at luxury shoe maker Jimmy Shoo are up 15% and that Frank Knight sees no end of ultra high net worthers moving to London as their city of choice.

As news of the Trump tweets and the Brexit Bill dies down, there is even space for a story about Mike Ashley once more. He has bought up the failing lingerie business Agent Provocateur to take his business empire upmarket. It puts a whole new meaning on changing the away strip.

Theresa May’s government will rise or fall on her herculean task of taking the country out of the European Union but in other news her government emerges more right wing, punitive and inhumane than ever. In normal times, and with a better opposition, there would be an outcry. Here are some examples.

Irene Clennell has been deported. The 52 year old mother and grandmother from Chester le Street, who cared for her chronically sick husband of 27 years, failed to meet the Home Office requirement of continuous residency because she had returned to Singapore to care for ailing parents. There was no compassion from Amber Rudd who has barred the Dubs kids too.

Irene described in a newspaper interview how she was taken without warning to a detention centre and then put on a plane back to Singapore. “They treated me like a terrorist” she said.

A French national, Bruno Pollet, married to a UK resident with a young son, has also been denied residency because his work as a climate change scientist took him to South Africa for three years, breaking 25 years continuous residency in the United Kingdom. He and his family have decided to move to Scandinavia.  Applications from E U Nationals for U K residency have doubled since the Brexit vote but one quarter have been rejected. The government turns a deaf ear to suggestions that E U nationals should be allowed to stay whatever.

In both cases, the Home Office is applying the letter of the law rather than using discretion or applying common sense. Campaigners say this hard line stance is happening all the time as  the government is so determined to reduce net immigration and feels  empowered by the patriotic antipathy for anyone from abroad.

George Freeman has made a gaffe and been  forced to apologise. He will keep his job as one of Theresa May’s closest advisors as she gathers her Home Office trusties around her.  In a Donald moment, he criticised a “bizarre decision” by a tribunal that ruled that people with mental health issues should be entitled to receive Personal Independent Payment. The payment should be restricted, Freeman said, to “really disabled people”.

PIP is to be further restricted anyway by new rules coming in this month. The process of applying for benefit remains as long drawn out and demeaning as possible with the apparent aim of ruling claimants out. Public donations to West Northumberland Food Bank spiked after a special screening of I, Daniel Blake, it was reported at the AGM last week, showing the public disgust at the way decent people are treated. Welfare benefits are frozen until 2020 which CPAG estimates will reduce the annual income of a family with three children by £2500 a year. No Klimts in these households then.

Claire Philipson will lose her job. Sunderland Council has cut the grant to Wearside Women In Need, which Claire has unflinchingly lead for about 30 years. Sunderland Council has said it is rethinking its provision for victims of domestic violence but in the meantime it  becomes the only city in the country without a womens refuge. The Council has also cut services to homeless people and youth services in order to save £74m before 2020. Jimmy Shoo is unlikely to open up here.

Other authorities are in a similar desperate position. In Newcastle, numbers of people receiving home care have been reduced by 4000  in order to save £39m from their social care budget as part of overall savings of £221 m. There are calls for an extra inheritance tax earmarked for social care, which I would welcome, but this kind of serious problem with no quick fixes is one that that governments always avoid.

Whitehall departments are now drawing up scenarios for a further wave of austerity. It is a fair bet that local authorities will again bear the brunt as they have done for the last nine years. These are cowardly and wholesale cuts that deflect the blame on to mostly Labour authorities and leave them with the responsibility for dealing with the pain and suffering they cause. They are probably unnecessary in the greater scheme of things and look like an ideological attack on local government and local services.

In all these examples of buried news, the government is using the smokescreen of Brexit and the wave of selfish populism to become again the nasty party. We are in danger of regarding this as normal. The new normal is not very nice.

Published in Newcastle Journal on Tues 7th March

Sotheby's auction house staff pose for photographers with Austrian artist Gustav Klimt's "Bauerngarten (Blumengarten)"