Extract from The Guardian
The current system of welfare and employment simply isn’t working.
Scotland, Canada and the Netherlands are right to explore this
misunderstood option
Shoppers on Edinburgh’s Princes Street.
Photograph: Murdo Macleod for the Guardian
Universal
basic income is the idea that just won’t go away. At heart, it’s a very
simple concept – every individual citizen should receive a regular
payment on an unconditional basis. However, the actual structure and
design varies considerably. Nonetheless, what has become clear in the
last year or so is that there is growing desire across the globe, including in the UK, to explore, debate, test, design, and build support for a universal basic income.
Why now? There are a number of factors. Labour markets and systems of tax and social support have been through enormous change in the last quarter of a century. Some of these changes helped people into work and provided targeted financial support to individuals and families. But there is growing concern that we have seen the emergence of a “precariat” – insecure, often in poverty despite being in work, facing relentlessly complex life choices, a complexity reinforced by the operation of the welfare state. Inequality, precariousness, insecurity – lack of control over one’s life – are challenges that recent reforms have done too little to address.
Basic income is designed to give people more control over their lives. It is not just the cash sum that is important but the security and certainty provided; a more predictable platform on which to make life choices. Should some of the fears over the rapid impact of new forms of automation driven by artificial intelligence and robotics come to pass, then this certainty will become even more crucial as people strive to adapt.
Will people be lazy if given a basic income? One might say this is a fundamentally, and worryingly, negative view of humanity. Notwithstanding that, models of basic income systems such as that outlined by the organisaton I work for – the RSA – do not offer a level of income which would remove the necessity of work, but rather one which would address some of the issues of insecurity. This basic level would allow for greater work choices for individuals than the current system offers, with a chance to move away from dehumanising short-term roles. The current welfare bureaucracy offers little such choice, instead forcing people into insecure work where they face effective tax rates approaching 80%.
Isn’t it expensive? A workable system of basic income could cost up to 1% of GDP (a number of proposed schemes are significantly less). This is comparable in scope to decisions made by UK governments in the past 20 years to increase pensions, tax credits, raise the personal allowance threshold, reduce corporation taxes and so on. Some critics have resorted to all sorts of caricatures of the policy. The oldest trick in the book is to set a basic income at an unrealistically high level and then claim it’s too expensive (one recently set it at an effective rate of almost £35,000 for a family of four which, yes, would be expensive).
Then there are claims that it would harm the disabled or deprive people of housing or childcare. But basic income replaces part, not all, of the welfare state. That is because it is not welfare, it is an income. When you receive an income, you don’t require the same level of support. So additional needs would still be met. There have been claims that basic income is too administratively complex. More complex than the current tax and tax credits system? That seems highly unlikely. And why should the rich receive the same as the poor? Well, they can be taxed more under a basic income system to take account of that.
Basic income is not a magic solution. Its advocates do not have all the answers. Nor can they have them without further discussion, refinement, and experimentation. This is why provinces in Canada, the government of Finland, a group of Dutch cities, a development charity, and Glasgow city and Fife councils are seeking to explore aspects of a basic income system in practice. Governments in London and Edinburgh should consider what a UK basic income pilot would look like and how it could be supported.
The tragedy for those who believe in progressive change would be if this debate was stifled. If we as a society are serious about creating a greater level of security and dignity for all then this debate needs to be widened rather than curtailed. If we can’t discuss sensibly some of the most significant economic and social changes taking place then what is left of progressive politics? Universal basic income opens out this essential discussion. Let’s expand the conversation – and the experimentation – rather than shutting it down.
Why now? There are a number of factors. Labour markets and systems of tax and social support have been through enormous change in the last quarter of a century. Some of these changes helped people into work and provided targeted financial support to individuals and families. But there is growing concern that we have seen the emergence of a “precariat” – insecure, often in poverty despite being in work, facing relentlessly complex life choices, a complexity reinforced by the operation of the welfare state. Inequality, precariousness, insecurity – lack of control over one’s life – are challenges that recent reforms have done too little to address.
Basic income is designed to give people more control over their lives. It is not just the cash sum that is important but the security and certainty provided; a more predictable platform on which to make life choices. Should some of the fears over the rapid impact of new forms of automation driven by artificial intelligence and robotics come to pass, then this certainty will become even more crucial as people strive to adapt.
Will people be lazy if given a basic income? One might say this is a fundamentally, and worryingly, negative view of humanity. Notwithstanding that, models of basic income systems such as that outlined by the organisaton I work for – the RSA – do not offer a level of income which would remove the necessity of work, but rather one which would address some of the issues of insecurity. This basic level would allow for greater work choices for individuals than the current system offers, with a chance to move away from dehumanising short-term roles. The current welfare bureaucracy offers little such choice, instead forcing people into insecure work where they face effective tax rates approaching 80%.
Isn’t it expensive? A workable system of basic income could cost up to 1% of GDP (a number of proposed schemes are significantly less). This is comparable in scope to decisions made by UK governments in the past 20 years to increase pensions, tax credits, raise the personal allowance threshold, reduce corporation taxes and so on. Some critics have resorted to all sorts of caricatures of the policy. The oldest trick in the book is to set a basic income at an unrealistically high level and then claim it’s too expensive (one recently set it at an effective rate of almost £35,000 for a family of four which, yes, would be expensive).
Then there are claims that it would harm the disabled or deprive people of housing or childcare. But basic income replaces part, not all, of the welfare state. That is because it is not welfare, it is an income. When you receive an income, you don’t require the same level of support. So additional needs would still be met. There have been claims that basic income is too administratively complex. More complex than the current tax and tax credits system? That seems highly unlikely. And why should the rich receive the same as the poor? Well, they can be taxed more under a basic income system to take account of that.
Basic income is not a magic solution. Its advocates do not have all the answers. Nor can they have them without further discussion, refinement, and experimentation. This is why provinces in Canada, the government of Finland, a group of Dutch cities, a development charity, and Glasgow city and Fife councils are seeking to explore aspects of a basic income system in practice. Governments in London and Edinburgh should consider what a UK basic income pilot would look like and how it could be supported.
The tragedy for those who believe in progressive change would be if this debate was stifled. If we as a society are serious about creating a greater level of security and dignity for all then this debate needs to be widened rather than curtailed. If we can’t discuss sensibly some of the most significant economic and social changes taking place then what is left of progressive politics? Universal basic income opens out this essential discussion. Let’s expand the conversation – and the experimentation – rather than shutting it down.
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