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  1. The Weekend Report
8 July 2023

Is universal basic income possible here?

In Jarrow, where jobless men once marched for work, a radical experiment in free money is unfolding.

By Anoosh Chakelian

What would you do with an extra £1,600 a month? In Jarrow, a town on the south bank of the Tyne in northeast England, 15 residents are about to find out.

Here, on 5 October 1936, 200 jobless men gathered to journey on-foot to London in protest against poverty, after losing their shipyard and steelworks. In the Jarrow March, led by the local Labour MP Ellen Wilkinson, they tramped down a soggy, depression-stricken England to parliament to demand work.

Today, that history is slouching towards an unlikely coda, a social experiment offering Jarrovians pay for no work at all. Is a radical form of justice coming at last to what Wilkinson once called “the town that was murdered”?

England’s first trial of universal basic income (UBI), a welfare model where every citizen receives a regular flat payment, is being held in Jarrow. Now in its final planning stages, the micro-pilot will pay an unconditional £1,600 a month for two years to 15 randomly selected people. (The amount is akin to the “real living wage” – a rate based on the cost of living, such as goods, rent and childcare, which is higher than the minimum wage.)

Autonomy, a think tank focused on the future of work, proposed the pilot. Since 2020 the Lottery-backed community group Big Local Jarrow has consulted residents and partnered with Northumbria University researchers. A parallel process is happening in Grange, a pocket of estates beneath the North Circular in East Finchley, north London.

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[See also: An “essentials guarantee” can end the need for food banks]

Long a symbol of post-industrial decay in the collective British memory, Jarrow – a spur downriver from Newcastle and Gateshead – feels more like commuter land today. In the centre, bronze figures of the defiant marchers stand on a low brick plinth in the car park of a Morrisons superstore. The Bede Precinct retail thoroughfare namechecks Jarrow’s Venerable son, the road of Anglo-Saxon enlightenment lined with shuttered shops and discount chains.

Over a third of children here live in poverty. Annual income is much lower than the regional average (£27,700 compared with £34,588). Central Jarrow is also one of the least healthy neighbourhoods in England.

The north-east is the UK’s hungriest region. The number of food-bank parcels handed out here has risen by 54 per cent in a year, and people in 26 per cent of households are going without adequate nutrition, new figures from the Trussell Trust food-bank network show.

This is clear at one of the UK’s busiest food banks a 20-minute drive from Jarrow in Benwell, a poor suburb of Newcastle’s west end. It provides 2,500 food parcels a month, 39 per cent more than the previous year. Founded in 2013, two years ago it had to expand to seven sites, and now has 62 agencies – including benefit advisers, vets and artists – helping its clients with far more than just meals.

“I am trying but my money’s just not going far enough”

A quiet queue wound out of the pond-green Seventies prefab. Squinting in the sun among raised beds of courgettes and chard in its flourishing allotment – where volunteers gave out lettuce and strawberries – Callum, a builder, said he’d recently been admitted to hospital with a head injury. While there, he missed a Jobcentre appointment and had his benefits docked: “I want to get back to work, but how can I recover when they’re just giving me pennies?”

Lucy, a carer using a satellite food bank at a church hall in Heaton, on the other side of the city, had ended up with nothing to feed her 14-year-old son at the end of the month. “It’s not the stereotype – I am trying but it’s just not going far enough,” she said. She frequently lives on nothing but tinned food to save more nutritious ingredients for her son.

“The social contract is disintegrating”

Volunteers and visitors all told me the same thing. Far more people with jobs are using food banks now. And the pandemic and inflation aren’t the cause – they’ve made life harder, but low wages and a shrunken welfare state are the real culprits.

Neither work nor welfare now stretches to cover basic necessities for so many Britons. Around 40 per cent of Universal Credit claimants are working, and the majority of people in poverty are in a working household. Average real wages are now no higher than they were in 2005.

“We’re here because of structural problems, low household incomes – areas beyond our control,” said John McCorry, 62, a garrulous Belfast man who’s managed the foodbank for ten years. “Social security’s not there any more as I knew it growing up in the Seventies. The social contract is disintegrating in the absence of a plan for the state.”

[See also: Why are Brits on £180k so sad?]

One solution could be UBI. Smouldering on the fringes of the progressive left and the libertarian right for some time, it has lately attracted the interest of mainstream British politicians.

Mark Drakeford, the First Minister of Wales, likes the idea, as does Andy Burnham, the Mayor of Greater Manchester. The SNP government in Scotland explored it in 2020, but found it wasn’t possible within the constraints of devolution. Greens have proposed it for decades. Tories, too, are curious, from the liberal think tank Bright Blue to the group Conservatives for a Universal Basic Income (“Cancel poverty, maximise freedom, and get the state out of people’s lives!”).

The Welsh government is trialling it for three years with 18-year-old care leavers. Results have not yet been published, but I’ve been told of improvements to participants’ mental health.

At Jarrow Focus, a poky office of exposed redbrick walls with a tea caddy bubbling in the corner, planning for the pilot programme is underway. Anne Corrigan, 60, the project coordinator and a former nurse, sat across the table from Matthew Johnson, 40, a politics professor at Northumbria University. Chatting over generous slices of cake – she in a purple floral summer dress and he in a rather warm looking pinstriped shirt and suit trousers – they had a mother-and-son chemistry while enthusing about their plans (“We’re both UBI converts, really,” Corrigan said with a proud smile).

“We lost the good jobs from Jarrow,” said Corrigan. “If you look around the town centre, it’s shops, casual hours, zero-hour contracts, a lot of people on minimum wage. There’s no decent jobs which would pay a decent wage.” She has lived here since 2006 and grew up in a mining family in nearby Washington. “People are in that constant downward spiral, and we want to get them in an upward spiral.”

While raising two children, she had to take three years off work to care for her father after he had a stroke. When she began a teaching degree at 36, she had to work extra nursing weekend and night shifts to support her family. “I think if I’d had a buffer, a bit of back-up, I wouldn’t have been that stressed for years.”

“I’m a reluctant convert to UBI – I used to think you had to put more conditions on welfare”

Johnson, who grew up in Benwell, is from a family of five that was “welfare-dependent for the vast majority of my childhood”. He grew up watching his father “disincentivised to work because he’d lose his benefits” and therefore believing greater conditions should be placed on claimants.

“I’m a reluctant convert to UBI,” he said. “I thought you had to significantly increase the incentives to get people into work. But all the evidence I’ve seen over the last ten years suggests the opposite’s true: if you provide adequate help, people become productive as a consequence.”

Universality, he argued, is key. “Financial insecurity is not just a working-class issue anymore, it’s a middle-class issue. It affects the bulk of society.”

After tax, the Jarrow pilot participants will receive around £1,200. They can work, and even potentially keep their pensions and benefits (depending on the Department for Work and Pensions). Anyone can apply for the trial, which will be randomised. Its scientific value is limited, but organisers will use it to learn how to run a larger-scale experiment.

They also still need £1.6m to pay for it, which they hope to raise through private philanthropy and local authority budgets.

“It could open up a can of worms – people spending too much on drinking, drugs or gambling”

Graeme Feeney, 46, a builder who attended a public meeting about the scheme, was sceptical at first. He worried some recipients might use the money unwisely, or be disincentivised to work. “I thought it would open up a can of worms – I know people who have problems spending too much on drinking, drugs or gambling,” he told me.

But as a self-employed tradesman, Feeney reflected that a system like this would have helped him take time out to heal after he sliced two fingers off while working in 2002 (instead, in need of wages, he returned to work days after his surgery, his wound became infected and he now has limited use of his hand). He’s also noticed colleagues struggle. He knows one 68-year-old joiner who can’t afford to retire, and another 19-year-old in the same trade who couldn’t afford university. “I’ve seen it from both ends of the spectrum: people should have so much more opportunity in life.”

[See also: An “essentials guarantee” can end the need for food banks]

Were UBI to become national UK policy, it could cost £67bn a year (about 3 per cent of GDP). Given the fiscal conservatism of both main parties, and their fear of raising taxes – even for the super-rich – the prospect is distant.

Yet there are other, less dramatic, alternatives. Ministers are under pressure from the Trussell Trust and 90 other UK charities to introduce an “essentials guarantee”: a law to peg benefits to the minimum amount of money needed to cover essential costs, calculated by an independent body. The basic Universal Credit payment for one person is £85 a week, while a representative basket of essential items now costs £120 a week.

“The basic rate should always cover the cost of life’s essentials, such as food, utilities and vital household goods, but right now it is too low and nine out of ten people on Universal Credit are having to go without,” said Helen Barnard, director of research, policy and insight at the Trussell Trust.

“Age-old assumptions that work leads to success in life ought to be dispensed with”

Last year was the 80th anniversary of the Beveridge Report, which laid the foundations for the post-war welfare state. For the first time, it gave people like the Jarrow marchers a safety net. Just as the NHS clearly needs a new settlement, the clamour for an overhaul of social security is growing. From my trip through Jarrow, Benwell and Heaton, it felt overdue.

“We just have to deal with reality. Age-old assumptions that work leads to property leads to family leads to success in life ought to be dispensed with,” Matthew Johnson shrugged. “It’s not possible for younger people to achieve the outcomes their parents and grandparents assumed they could, because of systematic changes in the economy.”

[See also: Can Labour afford to be ambitious?]

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