Credit to: Tri-City Radio
In this article, Martin Sandbu compares basic income to UK’s Universal Credit (UC), a policy introduced in the United Kingdom by Duncan Smith, the Conservative Party politician who recently resigned as Secretary of State for Work and Pensions.
Although UC implementation has been a “disaster,” according to the article, it does have some similarities with basic income — the most striking of which is the attempt to promote work incentives by reducing or eliminating the withdrawal of benefits as recipient’s earnings increase, in contrast to many traditional welfare programs. And this, according to Sandbu, is “exactly the right direction”.
More information at:
Martin Sandbu, “Free lunch: basic welfare policy“, Financial Times, 29th March 2016
UC will have benefits withdrawn at a rate somewhere around 75%, depending on how government cuts go. The intention was to reduce this to 65% initially, but cuts to the tax credit element of universal credit this past year have raised the withdrawl rate. It certainly was never intended with UC to eliminate benefit withdrawl altogether.
The *only* similarity it has with UBI is the combination of some benefits – although the government has also undermined this by making local councils responsible for separate awards of council tax benefit, and cut this from full awards for all who qualify to 75% for working-age claimants, including those with disabilities.
On top of this the sanctioning regime for ‘non-compliance’ with job centre / work programme edicts (often quite arbitrary) and the extra assessments for people with disabilities on top of their diagnoses by doctors is actually killing people – and has lead to the fastest rise in food bank applicants ever seen in the UK. When a claimant is sanctioned, *all* of their benefit is taken away for periods of 3 weeks, 3 months and then a year. This has lead to a 200% rise in homelessness in the UK.
Another significant difference between UC and UBI is that UC is assessed by the household, not the individual – and even worse the default is to pay the ‘head of household’, usually the man. This leaves women with only Child Benefit (not rolled into UC) to rely on.
A large part of the ‘disaster’ of UC is not only the computer problems but the fact that claimants now have to wait 8-10 weeks before their money comes through, (with emergency payments made a loan, which themselves take up to 6 weeks to come through). The housing element of UC is also now paid to claimants and not direct to their landlord, as had been the case with the council-administered Housing Benefit – which again will put families’ housing at the mercy of their ‘head of household’ once UC is rolled out to include them.
Unfortunately the article itself is behind a paywall, so it’s hard to see if Sandbu has picked up on any of this.