The case for basic income is growing. Scotland can take it forward. - RSA

The case for basic income is growing. Scotland can take it forward.

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  • Economics and Finance
  • Public Services & Communities
  • Communities

The fundamental case for a basic income is that greater freedom can flow from economic security.

By providing every individual with a foundation of a regular, unconditional, cash payment, economic security and freedom grow.

Scotland is one of the places where basic income can start to become a reality. We explore how in a new report published today: A Basic Income for Scotland.

For the report, we have spent time in Fife listening to and deliberating with citizens and community workers.

The current welfare system creates a poverty trap

One thing we heard clearly from the community was how much policy has led to the state leaning away from providing people with financial support and leaning in to manage their lives. Many people we spoke to were left powerless in the face of debt, unfair work, stress, insecurity, isolation and, frankly, despair. Foodbanks were just the tip of the iceberg.

As our participants put it:

“The system fatigues people in every way – physically, mentally, financially.”
“It’s not called a poverty trap for nothing, it’s hard to get out of - impossible!”

The testimony of Fife's residents bring to life the findings of academics, Government watchdogs, and even the UN. The current welfare system is failing and leading to poverty, insecurity, powerlessness, and even destitution. This shouldn't go on.

What did people in Fife think of a basic income?

Once we had gained an understanding of the challenges faced within Fife - where Universal Credit has been rolled out - we asked the group of citizens to imagine the positive or negative differences a basic income could make.

There were some concerns about people making poor choices but in the main the sense was that Basic income could allow many to push back against bad employers, create time and space for family life, relieve stress, and reduce the stigma of the current system.

People told us:

“I’d be able to plan ahead more than a month.”
“Having a basic income would allow me to say ‘no’ to a job and have the option to look for something else rather than having to ‘choose’ between taking the job available or being destitute.”

How would a basic income fit with public services?

Basic income operates on a universal basis – everyone receives it so there is no ‘deserving’ versus ‘undeserving’ demarcation. And that is ultimately why it could be a significant improvement on the current system: it supplies some time, power and space for people in general to make better choices than the state is able to make for them. It combines greater economic security with greater freedom.

To combat inequality, it is important that basic income is financed through progressive means (where the wealthiest pay more) and fits together with other ‘supports’ – help that people get from the government or the community.  

A more progressive tax system plus a universal system of cash ‘supports’ - basic income - at the core of a wider system of ‘supports’ (public services, and support for those with specific needs such as disabilities) has the potential to confront poverty and inequality in a comprehensive fashion.

In A Basic Income for Scotland we map how pilots of basic income could work with a full set of supports alongside cash payments. We call this community designed system of interlocking public, community, and employer supports wrapped around basic income a 'Civic Basic income'.

What impact would basic income have? How could we get there?

A Basic Income for Scotland also includes our model of the economic impact of a basic income. We wanted to show how we could get from where we are today towards a basic income.

A micro-simulation was conducted on our behalf by Landman Economics using its Scottish tax-transfer model.

This research modelled two types of basic income:

  • A basic income of about £2,400 per person a year, which would cost £2billion a year to implement in Scotland. We called this ‘Horizon 2’.
  • A basic income of about £4,800 per person a year, which would cost £9.5billion a year to implement in Scotland. We called this ‘Horizon 3’.

We argue that we could get to ‘Horizon 2’ – a basic income of £2,500 a year – in 5 years. The shift in tax and revenue to get here aren’t that different in volume and scale to changes in UK personal and corporate taxes in the last few years. They would be far from unprecedented or politically insurmountable.

‘Horizon 3’ – a basic income of £5,000 a year – would take longer to put in place. We estimate about 20 years. The report sets out some costed options of how we could get there.

The model also looks at what difference a basic income would make to people’s lives. We looked at the impact on poverty, inequality, and destitution – not being able to buy the basics regularly – for different types of families.

We found a basic income of £2,400 a year would halve destitution and reduce relative household poverty by 8.5%. A basic income of £4,800 a year would end destitution and reduce relative household poverty by 33%.

It’s time for a trial of basic income in the UK

Given this impact, the report recommends that Scottish and UK policymakers support a trial of basic income. Ideally these should be ‘saturation’ trials, where everyone in an area gets a basic income and no one loses out.  

Earlier this week, another report on basic income was launched at the RSA. Guy Standing wrote Basic Income as a Common Dividend for Shadow Chancellor John McDonnell MP – he and other senior Labour MPs received the report sympathetically and spoke positively about a basic income at the RSA.  

In Scotland, the SNP Government has funded feasibility studies into basic income. And the Green Party have long advocated the approach. The political sands are shifting.

At the RSA, we adopt a positive standpoint towards consideration of and experimentation with Basic income. A Basic income for Scotland explores why and how.

Concerns with the current welfare system are real. Alternatives must be explored. We need to support public dialogue about the right social security approach for the future. Basic income is one such alternative that past trials and experiments have found some very positive outcomes from.

If we are serious about greater economic security and freedom, then what have we got to lose by exploring Basic income further? Big challenges call for potentially transformative measures. Basic income is one. The loss will be if we don't take Basic income seriously and act.

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  • I'm sorry but five years to get to the Horizon 2 amount of £2400? and TWENTY years to get to £5000? This is not only grossly underfunded, but that is far too long a wait when people are literally dying due to poverty and austerity at this very moment.

    I live a very modest life. I don't go on holiday, I don't own a car, and I don't drink, and my basic needs expenses (rent/bills/food) come to around £700pm.

    700 x 12 = £8400. So with £5000 a year I would still be almost three and a half thousand pounds off of having my basic needs seen to, which totally defeats the concept of a basic income.

    I can get behind five years for a basic income that will truly see to basic needs, but this should be set at the equivalent income of a part time job with a living wage which is £9100. No less.

    This article has totally disheartened me, as it seems like another sham dressed up as a UBI like the Finnish experiment was. That trial was NOT Unconditional, it was NOT Universal, and it did NOT cover basic needs. Therefore, IT WAS NOT A UNIVERSAL BASIC INCOME!

    I had hoped that Scotland would genuinely lead the way in a new progressive society, but it seems to want to dribble out the concept of a UBI without fully implementing it to the standards which it needs to work.

  • Thank you for your article, Anthony. 

    I have been receiving Employment and Support Allowance after been made redundant in 2010 and after suffering a withdrawal-relapse from addictive big pharma neuroleptics (another massive issue for society e.g. please read Anatomy of an Epidemic by Robert Whitaker).

    Since 2015 I have been a Willing Worker On Organic Farms.  A low-paid ESA volunteer (in the WRAG group) who labours alongside paid staff.  I believe that agroecology, regenerative agriculture and conservation agriculture, should be a public service like the NHS, and a long-term public project like HS2, so consider myself to be, an unfairly paid, unrecognised and unaccounted for public sector worker. Who isn't in being professionally trained like NHS nurses are or connected to Government departments like the NHS is. 

    Nick Clegg at National Statistics informs me that there were 9.27 million people of working age between July and September 2018, who were either classed economically inactive or who couldn't get a job because of lack of vacancy. The number of inactive people across the 28 member states of Europe was ~83.7 million in 2018.

    So how do you employ all those people if we're still conducting society as a competitive job market, with technological unemployment advancing?Why does society have to flip burgers first in order to raise public funds second: that without the McDonalds corporation generating taxable profits we'd have less public funds for building hospitals, libraries, community centres or roads etcetera?

    This is reductio ad absurdum!

    Getting rid of McDonald's or the fishing industry (that is destroying our marine ecosystems) or the heaps of marketed junk that fills the high streets: should have no effect on public funds.Therefore, public funds should be independent of GDP or capitalist free-market activity.

    Public funds should be independently set by a World Federated Banking System (not by a fractional reserve banking cartel).  In order to achieve equitable public infrastructures that each nation will be working towards cooperatively e.g. renewable energy infrastructures linked by trusted super-grid, universal basic incomes for each currency, universal maximum incomes to limit private ecological footprints (Doughnut Economics), agroecological food security for each nation (using regenerative agriculture and conservation agriculture to repair soil biology and increase plant nutrition), educational infrastructures everywhere to convert consumerist infrastructure into pedagogical advancement infrastructure (instead of watch shops, we'd have watch workshops where people could learn how to build chronometers etcetera) and so on...

    But yeah, let's get our priorities straight. By remembering the 4 crises explained by the Post Carbon Institute. (E)nvironment, (E)nergy, (E)conomics and (E)quality.

    I am flabbergasted that "Horizon 3" and £5000 a year is 20 years off, because how are the economically inactive supposed to take part?  With an initial Andrew Yang "Horizon 1" basic income of $12K a year, economically inactive people could work-share alongside paid staff in low-skilled occupations whilst topping up their basic income. Paid staff in low-skilled occupations are more likely to work-share and reduce hours if they've also got a basic income floor. Think agroecological workers or bus drivers or street cleaners etcetera.

    The increased "civilised leisure" could then be invested in social education opportunities, citizenship and community cohesion. The more we educate and upskill people, the more we create further work-sharing opportunities, which would also reduce middle-class stress.But if we're chained to this outdated model of taxable items such as GDP or to the unnecessary and time depriving and environmentally damaging activities of GDP itself, we're never going to solve the 4 crises, because they'll never be enough public funds or a functioning environment for us to inhabit.

  • Yes there is a problem.  People are poor because they dont have enough money.  Even then, with money, they are not particularly much happier since relative poverty kicks in also known as the distribution of income.  Basic Income wont help the former much, too expensive, nor the latter. What really concerns me from Guy Standing's brilliant speech at RSA last week is the notion that a 'pilot' basic income experiment will provide answers.  No, unfortunately only a full-fledged country application can do that - linking fiscal expenditure to revenue that would not only include transferring money but expenditure on health, education, roads, police, fire, ambulance, foreign aid, research etc.  Basic income is a great slogan, as was basic needs in its day (I introduced that notion to the ILO), but so is Brexit as that awful Farage is demonstrating. Populism (i.e. simplistic ideas) is winning the day but simple notions lead to simplistic policies and failure.  I believe it was Thomas Watson of IBM who used to say 'Think Complex, Talk Simple' - I am sure RSA will follow that up!

  • I am shocked. The RSA in bed with Labour on Universal Basic Income! I am seriously questioning continuing as a Fellow. The content of this article and the links are disturbing. No mention of the Finnish experiment learnings from UBI - why not?

    No mention of incentives or individual responsibilities, just "free money". A quote from a participant cited above sums it up “Having a basic income would allow me to say ‘no’ to a job and have the option to look for something else rather than having to ‘choose’ between taking the job available or being destitute.” I have been unemployed, my way out of it was to take a job cleaning toilets as a first step. If you have no money coming in you need to take the work that comes along and build from there, not wait for something better and live off of other people's money. Be responsible and be resourceful. Government has no money it just spends other people's money. The problem with Socialism is you will always run out of other people's money. The NAO, referenced above, has also completely failed to analyse the impact of UC against its stated aims and is resorting to politicised points of view. There is no mention of the incredible increase in levels of activity we have seen over the last 10 years. Under Labour we had over 2 million individuals claiming Incapacity Benefits (IB) for over a decade with no Work Focused Interviews or contact with DWP, they were not even counted in unemployment statistics because they were inactive as opposed to unemployed, and so technically not available for work. They chose to claim IB because it paid more than Unemployment Benefit and no-one bothered them. We have come a long way with ESA and now UC dealing with the massive levels of inactivity that were costing £17bn every year in "sickness" benefits alone, many were not sick but the system drove them to claim more "free money" from IB. The participants in this study were never going to give a glowing testimony of life on UC. This is so naive. Being unemployed is soul destroying, the loss of respect, identity, social interaction, learning new skills, progressing in life and a lack of money are deeply depressing. Moving into work addresses so many of these ills. State dependency is not a laudable aim that UBI should be advancing, nor is it sustainable. Even now with the highest levels of taxation since the War we are STILL running a current year Deficit, we havent paid down a penny of National Debt since the Financial Crisis. Living on benefits should not be a choice but a temporary and last resort for those who are well. Chasing improvements based on a relative measure of poverty is a fools errand, you will always find people in the bottom quartile with a relative measure.

    • The Finnish experiment was not a real UBI. It was not Unconditional, it was not Universal, it did not cover basic needs, and it did not last long enough. It was just some extra money given to unemployed people over a couple of years and they were expected to find work. That is not a UBI, it was a half arsed sham with the Basic Income name slapped on it.

  • Room in shared flat (including utility bills) - £90 pw

    Food and miscellaneous £40

    Total - £130 a week or £6,760 a year

    How does £2,400 or £4,800 a year make any difference at all (apart from the children of middle class families living at home)?   

    • Yes, the amount is far too low to work as a basic income.

      A basic income should be set at the same amount as a part time job at a living wage, which is around £9000 a year.

      The notion that we will have to wait TWENTY years even just to get to £5000 per year (which is still too low to cover basic needs) is making me question the validity of this experiment and the motives of the RSA in wanting to do a genuine experiment.

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