In Thomas More’s 16th century novel, Utopia, philosopher Raphael Hythloday plants the seed of the concept of a minimum guaranteed income.
At a dinner party, he tells the other guests that giving everyone a basic amount of money on which to live would be a novel way to prevent theft. If everyone had enough to eat, he argues, they would not need to resort to taking from others.
The idea – of providing everyone with a basic minimum amount of money every month, regardless of their employment status or financial situation – is an interesting one.
Many countries have trialled it, as well as charities, such as US aid organisation GiveDirectly, which has piloted a scheme in Kenya offering villagers a basic income for the next 12 years. The 4,000 participants in the Canadian state of Ontario’s 2017 Basic Income Pilot Project received a stipend of at least $10,000 per year, in monthly installments. Despite being successful, it was discontinued in August last year, mainly because of a change of local government.
Meanwhile, Italy’s populist government recently introduced its new citizens’ income, where households earning less than 9,360 euros a year are given a stipend, while perhaps most recently and most famously was the trial in Finland, where for two years, 2,000 citizens were given a basic income of €560, regardless of whether they worked or not. However, the country, which is known for its forward-thinking liberal policies – it was, afterall, the pioneer of Nicola Sturgeon’s beloved baby box – decided earlier this year that it would not continue the idea.
A study carried out on the participants and a control group found that the number of days in employment, and total labour market earnings, were no higher for those receiving the basic income than for those who did not.
However – and this is where the decision to stop it has been heavily criticised – they were happier.
People who took part, who were all unemployed at the start of the trial, said the scheme gave them freedom to be brave and try new ways of making money through selling their art, or taking a low-paying job that might ultimately open the door to an entire career. If it didn’t work out, then it was not the end of the world: basic bills could be paid, groceries could still be bought.
Scotland is currently considering its own version of the scheme, albeit somewhat watered down compared to its Scandinavian neighbour.
The Scottish Government last year committed £250,000 of funding to four councils – Fife, Edinburgh, North Ayrshire and Glasgow – to work on a pilot project investigating the idea of a “Citizens Basic Income”. The group, which also included government experts as well as representatives from local authorities, is due to report back by September this year – with a final draft of the report to be published next March. The outcome of the study will decide whether a “universal income” should be introduced in Scotland and what the potential costs to the Government would be. Taking on the idea is not a given. Sturgeon has admitted that such a scheme “might turn out not to be the answer, it might turn out not to be feasible”.
A report by independent thinktank Reform Scotland claimed that a lot of the costs of providing a basic income for every adult of £5,200 – around £1,500 more than the basic annual amount obtained through only Jobseekers Allowance – could be offset by money saved on benefits bureaucracy and scrapping the personal tax allowance.
Having written a number of stories about the bureaucracy of the benefits system, I can well believe that removing the nonsense could save a fortune. I heard about a chap who had his Jobseekers’ Allowance sanctioned because he failed to turn up for the multiple interviews set up for him that week – because he was in hospital, unconscious after a heart attack. When he began his recovery at home, he discovered no money had been paid into his account since he was admitted to hospital, leaving him unable to buy so much as a can of beans. Another man was sanctioned because on arriving at an interview for a security guard job, he discovered that the role required him to have a level of security clearance which he did not already have – nor was there time for him to obtain before he would be needed to start. He agreed with the company that going ahead with the interview would be a waste of his time – and theirs – so left. The next month, his benefits were docked to reflect the fact that he had “not turned up” to an interview.
All of this is costly and bureaucratic – not to mention unbelievably stressful for those who have to navigate what appears to many to be an entirely unavigable system.
A basic income is worth a try even if it does not end up being a long-term solution. If it gives some people that financial freedom to take an entrepreneurial risk or to train part-time in a new career, it is worth it. If it takes away the stress of the system from people doing their best to find a new job, then it is worth it. I’m looking forward to seeing how it works out.