Finnish trial of universal basic income should encourage similar system in UK

A successful trial of universal basic income in Finland should encourage the UK and Scottish governments to introduce a similar system when the Covid-19 furlough scheme is wound down, it was claimed today.

Chancellor Rishi Sunak has been urged to consider a universal basic income.

The final results of the basic income trial by the Finnish government, which was carried out in 2017-18, published this afternoon, showed recipients experienced less mental strain or depression, people felt more financially stable, and that it had a “mild positive effect” on employment numbers.

Now the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), has said the trial results should be used by the UK and Scottish governments to plan for the introduction of a universal basic income as part of a post-coronavirus “social contract”.

Nicola Sturgeon has said the Covid-19 pandemic had shown the “time had come” for the idea to be put into practice, however Boris Johnson’s government appears to have ruled out the idea.

Commenting on the Finnish study, Anthony Painter, chief research and impact officer at the RSA, said: “Wellbeing is a vital measure of economic insecurity.

“The Finnish Basic Income trials results show the importance of getting cash to people now is crucial. Even getting a small amount of money has a big effect on people’s agency and sense of control, especially those in real trouble, who this experiment focused on.

“The scheme did not have negative effects on employment; if anything, it was positive – an important rebuke to those who think it would lead to more people being lazy.”

He added: “More basic income experiments are needed in the UK. RSA modelling for Scotland’s proposed pilots found an initial basic income of £48 per week would be affordable – largely funded by turning the personal allowance into a cash payment, fiscally progressive for low-and-middle earners, and halve destitution overnight.

“We need to explore this model being applied across the UK as part of a new social contract for Britain’s recovery after Covid-19 as the furlough scheme is wound down.”

There has been an increasing focus on a basic income during the Covid-19 crisis, including more than 100 UK MPs and peers signing a letter in the Financial Times calling for the idea as a recovery measure as there are growing fears about the long term economic damage of the coronavirus lockdown.

A report this week suggested that a third of Scots could end up unemployed and Chancellor Rishi Sunak has suggested that the furlough scheme –which pays 80 per cent of a person’s salary up to £2500 a month – could be wound down sooner rather than later, leading to concerns about more people relying on universal credit and other benefits.

A recent paper from the Citizen’s Basic Income Trust and the London School of Economics via campaign group Compass proposed a basic income floor for all as a way of responding to the economic crisis while think tank Reform Scotland has also recently backed a scheme for a universal annual payment per person of £5,200.

Jamie Cooke, head of RSA Scotland, said: “RSA Scotland has researched basic income extensively, and we’re delighted that Nicola Sturgeon and the Scottish government are exploring a basic income. Today's result only reinforce the need for these to go forward. Scotland is developing a record of world-leading policymaking, and rolling out a basic income trial would be another feather in its cap.

“The RSA has previously convened deliberative bodies in Fife on welfare, finding that citizens very much understand the strong link between wellbeing and economic security. The momentum is there – not least in the cross-party support Basic Income has in Holyrood – and we’re keen to keep the discussion going.”

Scottish Greens social security spokesperson Alison Johnstone said that with the “holes” in the UK’s welfare system it was “no wonder more and more people are realising the value of a basic income for all. It’s an idea that’s time has come.”

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