Imagine getting £1600 every month for two years with no strings attached. For 30 people in Jarrow near Sunderland and East Finchley in London, this could soon become a reality.
The Autonomy think tank has developed plans and is seeking funding to provide a group selected to represent the broader population with a basic income .
Proponents of a universal basic income, which will be provided to the rich and the poor without any conditions, argue that this helps to increase employment and prevent poverty.
Authors of the English pilot projects it is also said to improve well-being and protect livelihoods in the face of shocks from climate change and automation.
Many other similar trials have been conducted around the world in countries such as Canada, the Netherlands and Finland.
The evidence strongly suggests that giving a group of people a basic income does not mean they work less.< /p>
But critics say lawsuits only affect those who benefit from politics. In fact, it would also lead to a huge number of losers due to significantly higher taxes and less targeted support.
«Any politician who thinks about it should be prepared for so many losers and should have a very strong case for it,» says Ashwin Kumar, a professor at Manchester Metropolitan University.
Kumar, who previously advised Gordon Brown and the Department of Works and Pensions, says that the introduction of a universal basic income will require a significant increase in taxes.
UK's growing reliance on benefits
The concept has been around for centuries and has attracted fans at opposite ends of the political spectrum.
The idea is simple: the government pays all people the same monthly amount, whether they're a bank director or someone else. out of employment. The amount is intended to cover basic expenses, that is, it is enough to live on, but no more.
Pilots in different countries have experimented with different amounts of money and targeting, that is, they are not always universal, but are based on the same ideas .
The most famous experiment was carried out in Finland from 2017 to 2018. The Finnish Social Security Agency (Kela) paid 2,000 unemployed people aged 25 to 58 a monthly allowance of 560 euros.
Participants reported improved economic security. and mental well-being.
But there have been only small positive changes in employment, and Kela warned that this could also be due to other policy changes.
Closer to home, the Welsh government last year introduced a scheme that would give 18-year-olds who are out of care a monthly after-tax income of £1,280 for two years. meets all the requirements to be considered a universal basic income.
While this idea has been gaining momentum in recent years amid growing use of food banks and economic turmoil, experts across the political spectrum remain highly skeptical about how She will work. in practice.
Kumar's modeling of how this might work in Scotland showed that income tax rates would have to rise by as much as 8 percentage points.
“A significant number of people will lose, some to a small extent, some to a large extent. sums, while a significant number will also benefit,” says Kumar.
A report by the House of Commons Library found that a weekly basic income of £100 for everyone aged 16 and over and £50 for each child would cost £316bn a year.
That's a lot less than the roughly £250bn the Treasury was supposed to spend on benefits, state pensions and tax credits in 2022-23.
Universal income will boost government spending.
Such spending also highlights the problem of the Universal Basic Income pilots, Kumar says. They do not address the «funding question» and only include the people who benefit from the policy.
This means that there is huge uncertainty about how people will react to a sharp increase in income tax, which may not compensate for what he says they will benefit from a monthly basic income.
“There is a kind of conceptual and ethical problem if you are going to try and see what the reaction of the losers will be. How would [they] react to the idea that they would be guinea pigs and lose money as part of this experiment? he says.
You will need to get legal permission to withdraw the money they currently receive in return, perhaps a smaller amount of that basic income.”
Many low-income people might actually receive less universal basic income support than they currently do if the payments weren't very high.
About 10% of Britons receiving benefits were classified as poor, OECD modeling showed in 2017.
UBI predicts an increase in poverty
Adoption of a Universal Basic Income system that will cost the Treasury as much as benefits and tax-free incentives at the time would have raised that figure to about 15%.
The OECD's Herwig Immerwall says: or reduce the amount of available support. This is a fundamental compromise.”
As the UK tax burden reaches a new post-war high and inflation pulls more people into higher tax bands, further gains are likely to be difficult to sell. voters.
Universal Basic Income has often been proposed as a solution to mass unemployment due to automation and technological advances. While the rapid growth of artificial intelligence in recent months has raised fears of job losses, Immerwall says such innovation also creates jobs.
Joe Shalam, policy director for the Center for Social Justice, calls the scheme a solution to a problem that «not yet.»
The spread of English pilots developed by Autonomy to the whole of the UK will cost about a trillion pounds, he warns.
“ This is not money that is well spent on income support for people who do not need help. It just doesn't stand up to even the most basic scrutiny,” he says.
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