Universal Basic Income Explained '“ How a fringe idea could redefine the welfare state

It's the theory that connects everyone from civil rights leaders to American founding fathers, from left-wing politicians to titans of industry, a dream conceived in left-wing Academia, and possibly realised in Fife.

Picture: John Devlin
Picture: John Devlin

Universal Basic Income (UBI), the idea that everyone should be given a set amount of money each month, might seem like a money haemorrhaging fantasy, but it is gaining more traction in mainstream politics.

The concept is simple: a minimum amount of money is given to people to offset depressed wages and poor quality of life for many in even relatively rich countries.

In developing countries, the allure is that replacing Aid with UBI would negate the need for countries to develop a nascent welfare state that their bureaucratic infrastructure is poorly suited to.

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The Pilots

While there have been a number of pilot areas suggested in Britain, none have yet come to fruition.

By far the most high profile of the trial runs has been in Finland, where the Government is giving 2000 unemployed citizens €560 a month for two years.

The Positives

Guy Standing, the academic who has been the most forcible advocate for UBI, says that the idea would head off the problem of job insecurity in an age of public sector contraction and zero-hours contracts.

Silicon Valley bigwigs, and even prominent scientists like Tim Berners-Lee, the inventor of the internet, also see UBI as a means of coping with the threat to jobs posed by robots and artificial intelligence.

Economists at the World Bank see it as a way of tackling that favoured target of populist politicians: red tape. UBI, it is theorised, would remove layers of bureaucracy from the current system.

The Negatives

The negatives of UBI are as predictable as they are seemingly insurmountable. For one, the cost of such a policy would be incredibly high, even factoring in savings on means-testing.

As with all policies which rely on universalism over means-testing, there is a danger that the poorest will benefit far less than those who are better off.

It is also seen by some as a way to disincentivize work, meaning unemployed citizens won’t try and get a job if they are guaranteed money.

The Political Will

As the government at Westminster wrestle with the problems that a means-tested system of benefits present, UBI still remains a fringe pursuit.

John McDonnell, Labour’s shadow chancellor, confirmed at the weekend that the party had formed a working group to pursue the concept, which the left-winger strongly hinted would feature in a future manifesto.

But few believe McDonnell is going to be measuring the curtains for Number 11 Downing Street any time soon, even if he has recruited Standing to lead the investigation.

Closer to home, however, the Scottish Government is making more positive noises, with mooted pilots in Glasgow and Fife given tentative backing by Jeane Freeman, Holyrood’s Social Security Minister.

Glasgow City Council’s approach to UBI conforms to Standing’s work, namely that too many working adults live in ‘fear’ of a sudden change of circumstances.

Riding a wave of popular outcry about Tory changes to the benefits system including the so-called Bedroom Tax, the SNP Government now has the power to create new benefits.

Some believe that Nicola’s Sturgeon’s party, will be far less ambitious in practice as it is in theory, with UBI another policy that sounds good on paper but doesn’t come to fruition beyond a pilot scheme.

But the idea has come a long way since being seen as a concept favoured by rogue economics, but not serious politicians.

No matter the polling woes of the Labour Party, their number two coming on board with Basic Income is a huge step forward.

With campaigners well organised and well funded, and Scottish pilots seemingly inevitable, don’t count out Universal Basic Income coming to a town near you.