Time to take a serious look at Universal Basic Income

The idea of paying a Universal Basic Income (UBI) to all citizens is something that has been gaining support over recent years.

The UBI has been mentioned a number of times in relation to the present crisis caused by the Corona virus. Many have argued it would be far easier if the government just handed out a basic amount of money to everyone, rather than go through the system of delays and obfuscation that seems to be attached to the Universal Credit system and other schemes.

Afterall, this was what happened at the time of the financial crisis of 2008, the government handed out money to banks and the like in the form of schemes like quantative easing. The banks then used this money to prop up their balance sheets. Company directors also used the largesse to buy back shares in their own companies. The quantative easing approach did not mean the money was put out intothe economy so that ordinary people could use it go buy goods and keep the system moving.

The idea of a universal basis income has received support from both right and left of the political spectrum, The Left see UBI as a way to cut poverty, providing a floor under which no one should fall and can survive. It would also give people time for education and developing new skills. Quality of family life could also improve providing the space to  spend more time together etc.

The Right's view UBI as a way to cut welfare costs. The amount would be paid but in exchange, welfare and health support would be reduced – it should all be covered by the UBI.

Funding of UBI would come from general taxation.

The present economic system with its growing inequalities certainly needs something like UBI to stimulate demand. The polarisation between a small group of people having most of the wealth, whilst the mass have very little is not sustainable. The people that hold the mass of wealth put it away or lend it out to others. They are not out spending the money in the market place, creating the demand for goods. If people all have a basic amount of money they will spend.

A number of places have trialed UBI, including Canada, Finland and India. There are projects planned here in Sheffield and Glasgow.

In Alaska, they have had UBI for many years, provided by the wealth that came into the state from the oil industry. It is regarded as a fundamental right in Alaska, set each year, though there have been arguments about levels and the effect the UBI has on other services.

What does seem clear from examples of UBI around the world is that it has not resulted in stopping people from wanting to work. The UBI provides a basis subsistence level income, people still continue to want to work. It does though help cut poverty and stimulate the economy.

There would ofcourse be potential problems over what level the UBI was set at each year but this would be a matter for negotiation, In the short to medium term it would provide a simple way of getting money out to people in order that they can survive as well as getting  the ecomomy going.   

published - Wanstead and Woodford Guardian - 30/4/2020