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19th October 2016Is a universal basic income a step nearer?

The universal basic income is a form of social security designed to lift people out of poverty, protect the workforce as automation reduces the number of available jobs, and boost the economy by enabling people to spend more on goods and services.

The idea has been around for a while. Next year, Finland and the city of Utrecht are scheduled to run pilot schemes. Here in the UK, the idea is being promoted by a group called the Citizen’s Income Trust. The Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) has published a new report based on their ideas, advocating the introduction of a basic universal income, calling the approach the best alternative to help people improve their lives. The RSA estimates that its proposal would cost around an extra 1 per cent of GDP.

How it might work

The basic principle is straightforward: every citizen would receive a standard payment. The RSA see it as a building block for security designed to support the individual as they work, care (or are cared for), set up a business, or learn.

Pros

Advocates believe that there are many benefits. They see it as alleviating poverty, lessening inequalities in society, and improving the quality of life for those struggling to make ends meet. In addition, many believe that it would simplify and reduce the need for social support and welfare systems. Many women, they say, would become financially independent. Public health would be improved. The economy could benefit through increased consumer spending power. Workers wouldn’t have to worry about paying bills and would be free to choose work they find meaningful and enjoyable. More people could be encouraged to become entrepreneurs, setting up businesses and pursuing their own ideas.

Cons

Critics of the idea believe it’s too idealistic and costly, doesn’t represent a living wage, and that instead of embracing the opportunities, people would instead become idle and have little incentive to find work. Nor, they believe, would it help those in serious debt or those most in need of support. Poor countries wouldn’t be able to afford to implement such a system and would get left behind. In addition, like many other benefits schemes, it could be open to corruption.

Public opinion

A recent poll carried out by Dalia Research across all 28 EU member states shows that the idea resonates with many citizens. Results showed that 28 percent of people would definitely or probably vote for a universal basic income initiative.

In the UK, interest has come from MPs on both the left and the right of politics. The Green Party is a keen supporter of the concept, and Jeremy Corbyn has indicated that he would support the idea of a “guaranteed social wage”, a similar proposal.

The Dutch scheme is due to start in 2017 and will run for two years, as will the Finnish scheme. The results will no doubt be keenly studied across Europe and beyond.

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