The UK is a rich country, but we do not use that wealth to ensure everyone thrives. We could end poverty on these islands and provide everyone living here with opportunity and security if we wanted to. We have the resources to do it. But that massive wealth is kept locked away, unavailable for supporting the public good.
Instead, households across the UK are seeing their financial security eroded away by: the high cost of living; an ineffective social security system; and low wages, insecure jobs and unemployment. Fully 90% of people receiving universal credit are currently going without essentials. And work is not always and everywhere a sufficient solution, as shown by the fact that 70% of children experiencing in poverty Scotland are living in a household where someone is in paid work.
The calls are growing for the government to ensure that everyone has access to a secure, adequate income for a decent and dignified life. While proposals for a Universal Basic Income have been long-standing and well-established, in Scotland we’re moving forward with a slightly different idea: the minimum income guarantee (MIG).
This policy would set a solid income floor below which nobody would be allowed to fall. It would create access to fair work with fair wages, while reducing costs for low-income households through our collective services. And it would strengthen Scotland’s social security system so that no one has to live in poverty.
The Scottish Government has already made a welcome commitment to the MIG. It has established a Steering Group and Expert Group to explore options for delivery. Our organisation, The Poverty Alliance, is a member of this group taking forward the proposal. The task now is to set out a roadmap for implementation and to build the public and political support needed for implementation.
What is Scotland’s proposed minimum income guarantee?
The MIG is often conflated with the idea of a universal basic income (UBI), but there are key differences between the policies. A UBI is simply a flat payment given to everybody, regardless of their circumstances. MIG, in contrast, is targeted to those on low-incomes and is tailored to personal circumstances.
The MIG proposal under consideration in Scotland doesn’t stop with direct cash transfers. It also seeks to reduce the cost of living for low-income households by investing in public services; alter the rules of the labour market so that more people can access fair work; and re-strengthen the rest of the social security system.
It is this deliberate tailoring and targeting, coupled with action around fair work and public services, that we believe makes MIG a more effective anti-poverty mechanism.
MIG is a way to turn rhetoric on human rights into concrete action. It creates a solid financial foundation in an uncertain world, offering every person in Scotland a minimum level of security and the chance to be active citizens who take advantage of life’s opportunities.
It is imperative that the Scottish government utilise all the power at their disposal move an MIG forward
The idea of establishing a minimum income was developed by IPPR Scotland; the Social Renewal Advisory Board, which was established by Scottish ministers in the aftermath of the covid-19 pandemic; and aligns with the New Economics Foundation’s work on the Living Income.
Since those discussions started, the Poverty Alliance has, with support from the abrdn Financial Fairness Trust, been consulting our members and gathering support for a MIG. We’ve found broad enthusiasm for the idea, with members citing unacceptably high rates of poverty as a clear rationale for bold action. Our members have also told us they believe the costs associated with the policy are acceptable, particularly when put in the context of the socio-economic costs of poverty.
We will continue to explore the delivery of this policy, both through our participation in the Expert Group and our wider work with our membership over the coming months and years. We want to make sure there’s as much civic engagement in this process as possible – because we know that we won’t see implementation without broad-based support for the policy.
The road to a social security revolution
Creating a MIG will not be easy, even with commitment from the Scottish Government for the idea. There are many hurdles we must overcome to reach implementation.
For one, the devolution settlement raises questions about what is within the Scottish Government’s gift. An MIG in Scotland would require a different approach to intergovernmental relations, as close and genuine collaboration will be needed to establish and enforce this income floor. Everyone will have to play their part.
The UK government must begin repairing our social safety net, as the MIG cannot function in a social security system characterised by waits, freezes and caps. Our general election manifesto outlines the steps the UK government must take to strengthen universal credit and clear the path to an MIG, such as ending the two-child limit, the five-week wait, and the benefit cap.
The public good is the bedrock of private enterprise
The Scottish government also has a vital role. The MIG Expert Group concluded that, “We do not need full powers or further powers to make progress, even if further powers around social security, work, tax, borrowing and equalities, may well be necessary in the future to realise the full potential of a MIG”. Progress on the policy does not need to wait, and it is imperative that the Scottish government utilise all the power at their disposal move an MIG forward.
Employers must also ensure that employment practices enable more people to reach the MIG level through paid work. We need to build on the success of the Living Wage Movement, which has 3,700 accredited employers so far in Scotland, to further increase the security generated by being in work.
We have heard concerns that the MIG payment will merely subsidise poverty wages, removing the incentive for employers to improve their practice. We must guard against this, as propping up poor practice cannot be the limit of our ambition. It will be essential for businesses to meet their moral responsibilities to their workers and their social responsibilities to the rest of us. There is a role for government in encouraging this through regulation and changes to procurement practices.
We need this change
We can see the effects of long-term underinvestment in our public services in our towns, villages and cities across the length and breadth of the country, from weakened council services to the rise in community foodbanks. That is bad for all of us, but it is a disaster for people on the lowest incomes. Those public goods are often a vital lifeline in difficult times and a platform that people can use to build for the future. Without them people are trapped.
It is also bad for business. Firms rely on public transport to get their workers in on time. They rely on schools to educate the next generation of workers. And when a worker is sick, they rely on the NHS to make them well enough to return to work. In many ways, the public good is the bedrock of private enterprise. For a MIG to work, that must be made clear and our public services strengthened and developed.
This means expanding the childcare entitlement for low-income households; greater investment in social care; and affordable, reliable public transport so we can access employment, training and social opportunities. Interim steps like these are what will make an MIG possible, and the Scottish Government can get started on all of them now.
Changes to our labour market and public services are necessary underpinnings of the MIG. But as we pursue them, we cannot forget the central need for cash payments to complete the system. It is the synergy between these approaches that will truly transform poverty rates, neither one would be sufficient without the other.
The final report by the Scottish government’s Expert Group, expected early next year, will begin to set out the roadmap to implementation in more detail. At that point, questions of feasibility and affordability will likely come to the fore. But at the Poverty Alliance, we are in no doubt that this approach is one that provides real hope for change. We strongly believe that if we work together to make MIG a reality, we can finally draw a line under poverty in Scotland.
Explore the rest of the series
This series looks at the specific challenges that campaigners face when arguing for universal basic income in highly individualised and neoliberal contexts like the United States and the United Kingdom, and how they work to overcome them.
Part 1 | Getting on with it
- UBI in the US ‘not just an idea’ – it’s achievable
Shafeka Hasash, Economic Security Project - 'Hope goes a long way': BI as a lifeline for ex-prisoners
Kevin Scott, Community Spring - Could a guaranteed income pave the way for racial justice?
Rachel Pyon, Deon Hodrick and Matthew Harvey, Equity and Transformation - Direct cash transfers 'could halve child poverty' in Oregon
Antonio Gisbert, Oregon Rebate - What can end the suffering of Black mothers and children in the US?
Zea Malawa, University of California, Berkeley Public Health
Part 2 | Widening the politically possible
- UBI could mean justice for everyone. How do we get there?
Philippe Van Parijs, UCLouvain - Basic income ‘won’t stop people working’: lessons from Canada
Ben Earle and Sheila Regehr, Basic Income Canada Network - Basic income could put food banks out of business
David Beck, University of Salford and UBILab Food - Basic income: why we need to start talking about money
Cleo Goodman, Autonomy and the Basic Income Conversation - Can cities do what national governments won’t on basic income?
Leandro Ferreira, Brazilian Basic Income Network
Part 3 | Getting the policy mix right
- It's time for a welfare revolution in the UK
Vibhor Mathur, University of Bath - Put the whole government to work rebuilding Britain
Matthew Johnson, Elliot Johnson and Kate Pickett, Northumbria University and University of York - Does Labour dare to renew the welfare state?
Cleo Goodman, Autonomy - Will Scotland be the first to guarantee a minimum income?
Ruth Boyle and David Eyre, Poverty Alliance - Sustainable welfare for a sustainable planet
Nicholas Langridge and Milena Büchs, University of Bath and University of Leeds - From dogma to data: a centrist case for pragmatic welfare reform
David Westlake, Cardiff University
