UNITED KINGDOM: Leading think tank lists basic income in top 10 trends for 2016

UNITED KINGDOM: Leading think tank lists basic income in top 10 trends for 2016

Leading UK think tank Nesta lists basic income in the top 10 trends of 2016 that will have an impact on people’s lives. With the rise in interest throughout the world, it could be the year it is put to the test.

Over the last twelve months Europe has become a hotbed for basic income innovations. With trials due to be carried out in Finland, Holland and France, it is a critical moment for policy makers to understand the feasibility of adopting a universal basic income. In addition to these trials, there is a chance that the first form of basic income will be adopted in Switzerland in 2016 via a countrywide referendum.

In light of these important breakthroughs, the leading UK economic innovation think tank Nesta recently announced that they believe that 2016 could be the year in which universal basic income is put to the test, listing basic income as one of the top 10 list of trends to watch out for in 2016. Nesta believes that a basic income is an important policy idea that should be taken seriously, and that it could be a solution to some of the many challenges of the 21st century. As Brenton Caffin, from Nesta, asserts:

A basic income can provide a safety net for people wishing to retrain, which is worth considering given the massive technological changes that we anticipate in the decades ahead. It can enable citizens to make greater unpaid contributions to their communities, strengthening the fabric of social relations and reduce the burden of professional care. And the reduction in poverty brought about by a basic income can provide children with a much better start to life.

In the UK, a universal basic income has yet to gain much support from the political mainstream. Its major advocates include the Green party, along with Richard Murphy, Jeremy Corbyn’s economic advisor. In the past, the Liberal Democrats have also supported similar policies. This could change, however; NESTA believes it will be hard to ignore the trials going on throughout the world in 2016, and, as a result, a policy that traditionally has sat on the fringe of the political debate could be thrust into the spotlight.

For more information see the following source:

Brenton Caffin, “Universal basic income moves into beta,” NESTA, December 21, 2015.

UNITED KINGDOM: Prestigious British think tank endorses basic income

UNITED KINGDOM: Prestigious British think tank endorses basic income

Interest in the Universal Basic Income (UBI) is sweeping across Europe, with British think tank RSA coming out in support of the UBI in a new report launched on December 17 at a public debate. The Royal Society for the encouragement of Arts Manufactures and Commerce, also known as RSA, is a prestigious institution founded in 1754 and granted Royal Charter in 1847.

Report authors Anthony Painter and Chris Thoung said the current approach to welfare “is no longer fit-for-purpose” and requires a new approach.

“The major concern is ultimately people: the lives we are able to lead, our ability to have a sense of security so we can pursue our ambition, and our ability to contribute to supporting one another, innovating, and developing the creative potential of society,” the report said.

“That is where Basic Income has the potential to be so much stronger than our current welfare state.”

The RSA endorsement follows another high-profile British think tank, the libertarian Adam Smith Institute. They published a report earlier this year also advocating for a basic income in the form of a negative income tax.

The RSA proposal for a British basic income

The RSA report suggests replacing the current welfare state with a UBI that would cost an additional 1 percent of UK’s GDP. RSA’s proposal is modeled after the Citizen’s Income Trust (CIT), an affiliate of BIEN, and derives most of its figures from this framework – read the CIT proposal here.

Under the RSA, citizens between 25 and 65 would receive an annual income of 3,692 British pounds, or £308 per month. People between 5 and 24 would get an annual payment of £2,925, or £244 per month. Citizens over 65 would receive an annual pension of £7,420, or £618 per month. Parents of children under 4 would receive an additional annual payment of £4,290 for their first child, or £358 per month. They would fetch £3,387 annually, or £282 per month, for additional children under 4.

It suggests potentially gradually rolling out the basic income to different demographics, such as those above age 55 and those below age 25. At the same time, a small basic income could be introduced while gradually reducing other benefits.

Regarding housing, the report notes that housing benefits should not be folded into a basic income because of the high cost of real estate in the UK. It proposes a Basic Rental Income. The idea is to utilize property taxes as a means to ensure universal housing income, but the report does not delve into the specifics. Nonetheless, this novel approach does deserve more discussion in UBI circles.

In offering these policy specifics, the RSA illustrates that a UBI is not simply a utopian ideal, as some of its critics claim. In fact, the report points out that far more radical changes to taxes and benefits have been implemented in the past.

Painter and Thoung note that a UBI would help society confront challenges created by rapidly improving technology and an aging population, a point that most other UBI proponents stress as well.

One of the attractions of the UBI, and why even conservatives and libertarians have been drawn to the policy, is its simplicity compared to the current system. Substituting current welfare policy with a UBI would eliminate its “perverse incentives, intrusion and complexity entirety.”

Since the UBI is universal there would be less fraud, they contend. And it would not undermine relationships and families because a UBI would not punish individuals for cohabitating as the current system does. This “strengthening of the family” aspect will likely win over more conservatives to the UBI cause over time.

 

More entrepreneurship and more time for family and community

From an economics perspective, the report argues that a UBI is the best system to incentivize work and avoid the welfare trap. In the current system, benefits quickly diminish as incomes rise, discouraging beneficiaries from taking up work. The report also claims that a UBI’s safety net allows individuals to pursue risks and creative endeavors. Instead of taking the first menial job available, a worker can spend more time searching for the work most suited to increasing their productivity.

This argument has been borne out by empirical studies on the UBI, such as the basic income trial in India that substantially increased entrepreneurship.

rsa_basic_income_20151216_previewOne of the criticisms of a UBI is that it lets some individuals take more time off from work. The key is whether their free-time activities are more valuable to society than their work hours. “Basic Income is a foundation for contribution. It incentivizes work but supports other forms of contribution too,” the report said. It suggests that the UBI would allow individuals to care for the elderly and other vulnerable individuals, which is especially important as society ages.

The actual work disincentive effect has been found to be small. The report briefly reviews evidence from experiments with a negative income tax carried out in the US and Canada between 1968 and 1980. The loss of labor hours for men was minimal. Women did lower their workload more substantially. They chose to spend more time with their family or newborns, activities of high social value. In Alaska under the Permanent Fund Dividend, a policy similar to a UBI, inequality fell in the 1990s and 2000s, while it increased in every other American state.

Another key issue is who qualifies for basic income and whether it would be extended to migrants. RSA’s proposal states that EU nationals should have first “contributed to the system for a number of years” before receiving the basic income. International migrants would be subject to current rules to access benefits. Individuals serving custodial sentences would have benefits restored once their sentence was concluded.

In recent years, the welfare system has lost public support as people demand more rules and conditions for the poor to receive assistance. However, benefit sanctions are becoming increasingly “inhumane,” the authors said. In order to detect tax credit abuse, the system has become overly intrusive into citizens’ lives and activities.

The RSA makes a few recommendations for how the UBI will be applied to the youth, including requiring young adults between 18 and 25 year old to declare how they would use the income. They would sign contracts “with their local community” and not the government, and there should be “no state monitoring” of the contracts, the authors noted. Additionally, those over 18 would have to register to vote in order to receive the UBI.

In suggesting tying the basic income to the community, rather than the government, the RSA report shows precisely the unique potential of the UBI to move away from the impersonal welfare state and toward a more relationship-oriented society. These arguments parallel that of free-market economist Charles Murray in defense of his own UBI scheme.

This report is a serious and comprehensive look at how a UBI could realistically be implemented in the UK. It provides a persuasive look into the economic, societal and moral underpinnings of the basic income. As the debate over the UBI continues to simmer across Europe, the UK will be hard-pressed to ignore this pragmatic approach for a radical overhaul of its welfare system.

Anthony Painter & Chris Thoung, “Creative citizen, creative state: the principled and pragmatic case for a Universal Basic Income,” RSA, December 16, 2015.

Anthony Painter, “In support of a universal basic income – introducing the RSA basic income model,” RSA, December 16, 2015.

Citizen’s Income Trust, “Citizen’s Income: a brief introduction,” 2013.

Andrew Walker, “Think tank floats ‘basic income’ idea for all citizens,” BBC News, December 16, 2015.

Tyler Prochazka, “Would a universal basic income be the ‘death’ of civil society?” Basic Income News, November 21, 2015.

Maz Ali, “Money. For free. It’s been tested in Canada and India. Now one Dutch city wants to give it a whirl,” Upworthy, September 4, 2015.

Jim Edwards, “Here’s how much we’d all get if the UK dumped its welfare state and introduced a universal basic income scheme instead”

britain-2938_960_720As interest in Europe grows toward the idea of a Universal Basic Income (UBI), it is even finding support in the United Kingdom’s Green Party. Jim Edwards in an article in the Business Insider analyzes how much a UBI would cost the UK.

If current welfare spending of £251 billion was split among all residents equally, each person would receive £324 per month. Only counting adults, the basic income rises to £423 per month.

Edwards notes that a UBI may force some UK employers to increase wages for “unpleasant but necessary tasks,” as laborers would now have more freedom to refuse certain jobs.

Jim Edwards, “Here’s how much we’d all get if the UK dumped its welfare state and introduced a universal basic income scheme instead”, Business Insider, December 13, 2015.

LONDON: Basic Income: How do we get there? (December 3rd)

LONDON: Basic Income: How do we get there? (December 3rd)

Next December 3rd, Basic Income UK will be hosting a conversation with Brian Eno, David Graeber, and Frances Coppola. The  discussion will be facilitated by Becca Kirkpatrick from Unison.

Brian Eno is a musician, composer, record producer, singer, and visual artist, known as one of the principal innovators of ambient music. He recently spoke about basic income during his John Peel Lecture on Radio 6.

David Graeber is an American anthropologist and anarchist activist, perhaps best known for his 2011 volume Debt: the first 5000 years. He is Professor of Anthropology at the London School of Economics.

Frances Coppola worked in banks for 17 years. She is now a musician and teacher, who writes on economics, finance and banking at Piera, Forbes and her own blog Coppola Comment.

Fond out the details of the event on Meetup.com