Universal basic income and what it may look like

[porkpiesinthepark]

I've been thinking for a while about the criticism of UBI and I think it's due to people not being able to imagine the government trying to 'match' peoples wages. In my opinion, it never will but there will be alternatives to what we have now, which will be able to offer something better.

So say the UBI is £1000 a month for a single person.
We could change the housing market to allow much more public housing with rents set at an affordable level, much more stability, no private landlords and the option to customise/ change your home. Let's face it, home ownership is out of reach for the majority at present. I don't find people are dying to own their own homes but desperate to be out of the instability of the private rental market, out of parents houses, out of house shares etc. If you could offer the next best thing to owning your own house, I think people would go for it.
There would be much more community linked to people having extra time due to not working or not working as many hours. Now, not having enough to do in the day is bad but most people have these huge dreams for retirement and this would just allow them to do some of these things now instead. Also more volunteering, looking after elderly relatives etc.
I don't think that private car ownership would be a thing. There would be a big system like Uber who you could call rides on. There would be a cheaper option, say if ten people wanted to go to the city centre at the same time, they would have to walk to a hub and then the van would pick everyone up, like public transport but based on demand. It would be a status symbol to be able to call a car out just for you.
I think a lot more people would wfh getting the cost of transport and childcare down. Schools might even go remote, as there wouldn't be both parents working and so in theory they could help facilitate the lessons. Then teachers would have small classes of Sen kids like mine, key workers and vulnerable children. Kids would interact with others through volunteering groups with parents, or just playing out as there would be less cars and more parents around to keep an eye on them.
People will either hate this vision as it's so different to what we have now. Or they will like some parts. But what we have now can't continue.

I don't actually think it will happen. It's hypothetical.

Most of our work is to create a future for ourselves and future generations. Whether it's health, educational, financial or material.
We are not programmed to just survive.
People talk about freedom but what would we use that freedom for if we don't have the money or driving force to learn new skills or travel?
We're intelligent beings who thrive when we're mentally stimulated, have a role within society, have money and freedom to make choices.
Even in sci fi where there's more of a utopian society in a technologically advanced civilisation, people are exploring space and having lots of human interaction and everyone has a role in that society.
If we're going to be happy in a society where we're limited, we'll have to be drugged/medicated or dare I say, neuralinked.

I am one of the people who has been part of developing the pilot proposal. We are a small community group in East Finchley and, talking to people, we found the system at the moment isn't working.

1. It isn't enough for people to manage. We have people reliant on foodbanks, and, trust me, that is not because they need someone to shop for them. They know how to shop, they just don't have enough money.
2. Sanctions cause massive stress, and real financial problems. They are often applied wrongly.
3. Thresholds are a huge problem, particularly because UC is a passporting benefit for housing benefit, and rents are sky high. People are trapped in low paid work, because they cannot afford to lose HB when they do better.
4. Conditions often make no sense. People are now being asked to work an extra two hours a week minimum. If their current job can't offer them that, they have to find another one, which may be lower paid on an hourly rate, so saves the Govt nothing, or they hit the thresholds issue.
5. Disabled people are terrified of showing they are capable of any kind of activity, even if they have good and bad periods, in case they are accused of faking. But activity is important for our physical and mental health. Of course disabled people, with extra needs, need more money.
6. People working in the gig economy can have very uncertain incomes, and that's a problem.
7. Calculating on household instead of individual incomes traps people in situations of domestic abuse.

So, we wanted to imagine something different. Basic income addresses all of these problems. Raising the level of benefits just raises the threshold, but it is still a problem when you meet it.

Basic income is money that is always there if your life changes (if you lose your job, or become sick or disabled), or if you want to change your life (take a low paid internship, train, start your own business - things that middle and upper class kids already have through the Bank of Mum and Dad). It is both a safety net and a springboard.

We chose the amount of £1600 a month because we already know that poverty and health inequalities are correlated. We wanted to know what the impact of sanctions, thresholds and conditions is (or what happens when you remove them), especially on health and wellbeing. It is also the sum that is being used in the Welsh Government UBI trial for care leavers, so comparisons can be made.

We know it will go further in Jarrow than in East Finchley; it won't be right for everyone in N2, but we will make sure they understand the impact on them.

We are not suggesting that this should be the level of a basic income going forward. I agree it would be wrong to start at a level like this nationally. We have to do the research in the system we live in. And yes, the interaction between a basic income, tax, and minimum wage levels, would be crucial.

For all the people who say that you lose control of your life or that this is communism, I would disagree. The current benefit system exerts massive control over people, but the point about UBI is that it is unconditional. Having money gives people choice and control over their lives. Communism, unlike UBI, provided universal services, where there was no choice or control over the quality or way those services were delivered. And of course, we need some of those too, like schools and the NHS.

There is no evidence that people stop working with a basic income - in fact in Finland, where the trial was on unemployed people, they worked more than the control group. The pandemic showed us that sitting in your room watching telly, with little money and no other options, is pretty miserable. I don't think you can bully people into work; I do think you can support them into it. Do I think that some people will swing the lead? A few, but they are probably working the system anyway.

And is it fair? I think so. Everyone gets it, so if your neighbour wants to waste her life away, why do you care? She isn't getting a penny more than you. But basic income gives everyone a stake in the level of benefits. At the moment, everyone knows what they are paying for energy and food and rent, but unless you receive them yourself, who knows what benefit levels are?

And for those of you who said the pilot is too small, we know it won't produce masses of statistical data, but it will produce some, and it will give us qualitative data. We had to balance the size of the trial, with what we needed to pay if the Government won't support the trial, and still make it achievable from a fundraising perspective.

I hope that helps.

You can find our proposal here (along with other pieces on basic income and the future of work) https://autonomy.work/portfolio/basic-income-big-local/

Thank you very much for your post and the discussion & information, @JuliaHines2023.

This bit is crucial:

Thresholds are a huge problem, particularly because UC is a passporting benefit for housing benefit, and rents are sky high. People are trapped in low paid work, because they cannot afford to lose HB when they do better.

It's affecting a couple I know. They both work (one F/T, one P/T), rent, and have young children. They are also stymied by sky-high childcare costs and labyrinthine bureaucracy if they work more hours.

They are utterly miserable and on the point of splitting. The social costs of that will be huge, to no-one's benefit, and to everyone's detriment.

@AutumnCrow I am so sorry to hear that.

Thanks. But I doubt it's uncommon.

Thank you JuliaHines’ good to have a post from someone directly involved.

How are the pans to prevent inflation when this payments start? And when inflation hits very high who is going keep paying for this shortfall as it would be unsustainable?

I am not going to pretend to be an economist. I'm not. I am a community volunteer, highlighting the problems with the current system. However, Basic Income Conversation have modelled different scenarios, one of which is fiscally neutral in static terms, so no extra call on public finances, and no net increase in taxation. That shows that a modest basic of £63 pw for adults, £41 pw per child, and £190 pw for over 65s, would cut child and pensioner poverty rates in half (a big issue for women who may not have a full NI payment record). The Mayor of London has similar modelling. And, as I said before, there is no evidence that people stop working and therefore stop paying tax. In fact, the opposite. You can read more here https://autonomy.work/wp-content/uploads/2023/05/Full_Paper_Lansley_Tackling_Poverty.pdf

they are doing a pilot in the North East and an area of London. It will be £1600 per month and they are looking at whether people chose to work/volunteer and what difference in makes. I am a full time teacher and after tax, NI and deductions I don’t make tons more than that. I would much prefer to not work and spend my time volunteering and being creative and going for walks. With the small difference in wages between the universal income and working 50 hours plus as a teacher why would I want to work? I could still do some volunteering with teenagers to give me the good stuff I get from teaching

Is there going to be a taper or progressive removal via the tax system for better paid people?

If I got £1600 per month I would continue working in my pretty well paid job as I enjoy it, but would use the extra money to make massive overpayments to my mortgage and save the rest. Very nice for me but I am not sure the state should be funding that!

@JuliaHines2023 £63 PW per adult is even less than the criminally low £85 PW per adult currently on universal credit. That's nowhere near enough to live on.

My fear with all this is that the government (particularly the current party) will decide that the solution to AI taking jobs will be that everyone can work part time, on top of their UBI. Their track record with how they have treated disabled people and those unable to work, suggests that nothing they have in mind will be good for these groups.

Hi @Whatames I am part of the collaboration that worked on that trial. I hope this post helps you to understand our reasoning. But basically:

1. We are not suggesting that £1600 pm should be the level of basic income - as research we have to work within the system we have. But a basic income is just that - basic.
2. You are unusual in saying you would not want to work. Most people don't say that, although they do say they would like to do something different or work slightly less (dropping that side hustle). That has included, in the conversations I have had, spending more time as carers for family members; spending more time volunteering with their community; starting their own business; and yes, more time being creative. Other people talked about putting money into their (currently small) pension pot, paying debts or living expenses, or saving for their kids. People don't just say that they will not stop work; research in other countries says that they don't. But that is one of the things we are interested in looking at.

£63 pw per adult is just one model. I am not advocating it, just showing that we can do things differently, without it costing the Earth.

I agree that disabled people get treated really badly, as do the unemployed. In fact, we plan that 20% of trial participants will be disabled people.

Because everyone gets a basic income, everyone has a stake in the level it is pegged at. Everyone also knows whether it is enough to live on, because they know what it is. It puts it up there in the reasons to vote for a party.

I think the fact that it is always there, helps people who lose their job, because they there is no gap, no need to apply for anything. There is always something coming in. Those gaps cause real chaos, with people borrowing at very high interest rates.

The same is true for disabled people who are accused of not being disabled enough, because one day they managed to do their own shopping.

I don't know enough about AI to comment, but yes, if we are all going to be forced to work less, having a system in place that keeps everyone head above water before that happens, sounds like a sensible plan to me.

Yes, I think so. I am not an economist, or a tax expert, but there have been different ways suggested. Check out some of the publications on the Autonomy website.

Interesting - the devil will be in how the taper will be applied - otherwise you will just recreate the hefty marginal tax rates you currently get at the point of benefits withdrawal.

Thank you @JuliaHines2023 for shedding more light on this. It's such important work you're doing and I'm really hoping it will happen in the not-so-distant future.

@JuliaHines2023 Disabled people do not get 'a stake' or indeed any kind of choice at all, in how they are treated by the government, of the level of income they have to attempt to survive on now. I can bet this won't change if UBI comes in either!!

I can just imagine it now - Tories election pledge of 'cutting UBI, stop the scroungers' narrative, and rich virtue signalers making a point of donating their UBI to charity etc..

I'm actually interested in UBI and in principle I think it's a good idea, just not in the hands of the government, especially some governments.

I personally would work because I want to have money for extras. I like going on holidays, going out for drinks, etc. £1600 would cover my bills and food but there would not be much left over, I wouldn't be happy with that.

@beesknees I enjoy working and think it’s healthy but would I go through all the stress of being a teacher for an extra £50 a week? No I’d prefer to do something low key and perhaps volunteer to co tribute to society. After deductions full time teacher pay is only marginally more than thre universal income. You’re not going to be that much better off in lifestyle. I can understand if your wage gives you considerably more but not if it’s the same or marginal and then who would do all the essential but not that well pAid jobs?

I am not convince this would work. This would attract more people wanting to come here just to get the UBI. Raising housing needs, healthcare and other issues. Which would create even more poverty or tax burden. Also, there is not evidence that people will not stop working but comparisons with Finland are not good. They are a very different culture than the U.K.

Thanks @Highandlows I think you do have to be careful that you do not create benefit tourism, but we already have a situation where many people who are lawfully in the UK on work visas have no recourse to public funds.

I agree that Finland is a different culture. I think that is a reason why we need trials in England, and in all the nations of the UK.

It wouldn't be means tested though. So you'd get £1600 plus your full time wage. Not just an extra £50 a week.

I don't think people are understanding UBI

The main thing we need to know is what kind of taxation rate would be applied on the "extra" money we earn for ourselves. One thing for sure, there'll be no tax free personal allowance and the basic rate of tax will be nowhere near as low as 20%. To pay for everyone getting UBI, we'd probably need a basic rate of income tax of more than 50% on all monies earned (from whatever source), to finance it. Would people really be willing to work in "hard work" jobs and have to pay over half of it back in tax? What kind of higher rate tax would be charged on higher earners - would we be back to the 90%+ rates of the 70s??