An important report on basic income has been released in the UK, as announced before, and publicly presented at the RSA last Tuesday. In that report, one central idea is to put forward, for the UK social reality: to give every adult citizen a 100 £/week (equivalent to about 460 €/month), unconditionally and without means-testing. According to the Progressive Economic Forum (PEF), this policy can be tested in the UK in five different ways (for an year):
Giving a 100 £/week (116 €/week) to every adult in a randomly selected community, plus 50 £/week (57 €/week) for children and any extra amount to account for disability necessities. The scheme would replace all benefits but the housing benefit.
Giving a 70 £/week (81 €/week) to every adult in a randomly selected community, plus 20 £/week (57 €/week) for children, but keeping child benefits. All other means-tested benefits would remain in place, accounting for the unconditional transfer as income, thus reducing or eliminating the (existing) benefits paid.
A 50 £/week (58 €/week) to every adult in a randomly selected community, plus any existing benefits (not considering the unconditional transfer as income).
A randomly selection of adults (country-wide) on welfare seeing conditionalities removed.
A randomly selection of homeless people given an unconditional cash grant, replacing other (cash or non-cash) benefits.
At the referred presentation, Labour Party’s John McDonnell, the Exchequer Shadow Chancellor, said the Labour Party is not committing to introduce basic income in the UK (if elected), but this report will definitely be instrumental for the party’s next manifesto design.
Not surprisingly, Tories in parliament stand firmly against this policy, branding it as a “handout”, and dismissing it as hugely expensive and unfair to “hardworking taxpayers”. To that, Guy Standing, main author of the referred author, has replied that governments looking forward should “at the very least introduce local pilots to see how effective it could be”. He and RSA Director Anthony Painter have been strong proponents of reducing or eliminating means-testing and conditionality in general, in a welfare system in the UK which has been “expensive to administer and is causing destitution”. Painter summarizes by saying that “basic income-style pilots have been proven to have beneficial effects on health, well-being, and trust, while giving people more freedom to decide for themselves how to manage their lives.”
A series of articles have been produced on this issue, in several news outlets, such as the Guardian, Brave New Europe, the Mirror and BBC News. The presentation video can be watched below, and also heard on an RSA podcast.
This week, on May 7th, Guy Standing will be presenting a report prepared at the request of the Shadow Chancellor of the Exchequer, John McDonnell MP. The complete title of the report is “Piloting Basic Income as Common Dividends”.
The event is organized by the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) and the Progressive Economy Forum (PEF), and will take place at the RSA’s Great Room Auditorium, at 11 am. It will be introduced by RSA’s Director Anthony Painter and PEF’s Chair Patrick Allen, followed by an opening keynote by John McDonnell himself. After that Guy Standing will present the fifty-page report in about thirty minutes, which will then be openly discussed by commentators Ed Miliband, former Labour Party Leader, Margaret Greenwood, Shadow Work and Pensions Secretary, and Caroline Abrahams, Age UK Director, as well as in a round of questions and answers with the audience.
Although other books and reports have been made public, focused on basic income for the British reality (e.g.: Annie Miller’s “A basic income pocketbook”, Malcolm Torry’s “Why we need a Citizen’s Basic Income”), this was the first time a British politician has specifically asked for a report on basic income. As Shadow Chancellor, John McDonnell and the Labour Party had been flirting with the idea, however, since early 2016 (even though McDonnell had been a basic income supporter as far back as 2014).
The Universal Basic Income (UBI) Lab Sheffield, a campaigning group working from the city of Sheffield, northern UK, has written to all the 84 city councilors in the region, as a move to have them support a local basic income experiment.
The main driver behind the initiative is to “ensure that nobody is economically left out, and that nobody lives in poverty”, in the words of Sam Gregory. This basic income experiment, as proposed by the UBI Lab Sheffield, would be applied in one of three ways:
Removing conditions from social benefits from around 4000 ill or disabled people (while another 4000 people group act as control group) (costing around 18 million £);
Paying 130 £/month (Note 1) to 4000 adults living next to each other (for instance, in a neighbourhood) (costing around 23 million £);
Applying different tax and benefits rules to a 4000 people group, whereas one subset would get, unconditionally, 6000 £/year, disabled or retired people would receive benefits above that level, and children would benefit from a smaller amount. Costing 60 million £, the test pilot would be funded by a new income tax (applied only within that 4000 people group), ensuring that all those earning less than 25000 £/year would see a net raise in their income.
This experiment is set to last for three years, according to the UBI Lab Sheffield’s design strategy. The idea is to measure several outputs, including but not limited to participation in the (paid) workforce, such as broader activity and personal care. Interviews and other qualitative studies would also be a part of all options, as described above.
Campaigners consider Sheffield a promising basic income test ground, but recognize that the city has no funding options for such an experiment. So, it would have to depend on central government financing, which can be more difficult, considering all the political agitation at the moment due to the Brexit-related issues (Sheffield was one of Britain’s cities to marginally vote pro-Brexit). However, the Labour Party is strong in Sheffield (holds 53 out of 84 seats in the city council), and its candidates for the upcoming elections in May already asked UBI Lab Sheffield for information. Sheffield Green Party is also supporting an UBI experiment in the city, as part of its campaign to the city council elections.
Note 1 – The National Living Wage in the UK is around 1300 £/month (calculated from hourly living rate for workers aged 25 and over).
It was in September 2017 that the Scottish Government decided to support local authorities – namely Fife, City of Edinburgh, Glasgow City Council and North Ayrshire Council – so these could conduct feasibility studies on potential basic income pilots within their districts. A 250 000 £ fund was made available by the government, complementing the common resources shared by these localities for this innovative pursuit.
The feasibility phase is projected to end in March 2020, precisely a year from now. Although the study is being managed locally, within the cited localities, it is being developed together with governmental institutes like the Department for Work and Pensions (DWP), Her Majesty’s (HM) Revenue and Customs (HMRC) and the National Health Service (NHS) in Scotland, without which future basic income pilot schemes in the UK cannot be rolled out. This initiative is even more important, within UK’s internal organization, knowing that employment, health and safety, and social security policy are reserved matters, which means these are dealt centrally at Westminster Parliament.
Responsible officials for the study, also named the Steering Group, have been engaging with all the cited governmental institutes, plus learning all available information on other basic income-like experiments around the world, and attending Conferences focused on basic income (such as the last BIEN Conference in Tampere, Finland). These officials, and their associated team, are expected to present an interim report in autumn 2019, culminating at the presentation of a final report by March 2020.
Even though the feasibility study is still in its infancy, an update on the work’s progression has already been released (March 5th). It is scheduled as indicated below, in which Phases 1 and 2 have already been concluded (Phase 2 is just ending).
Phase 1 (ended)
May 2018-October 2018
Local authority partners content with objectives
Broad agreement
Identified clear research questions
Phase 2 (just ending)
November 2018-March 2019
Agreed on outcomes of interest (individual and household income; changes in adult and child poverty; labour market participation; individual and community empowerment; health, well-being and education; experience of the social security system)
Identification of 11 possible models for basic income pilots
Identification and commissioning of research activities (social benefits – basic income interactions; economic modelling of basic income; direct impact simulations on household income and poverty)
Identification of appropriate funding and delivery mechanisms
Phase 3
April 2019-September 2019
Upon evaluation, decision from the Scottish government to go ahead with the pilots
Upon evaluation, decision from the included localities to support implementation (of the pilots)
Phase 4
October 2019-March 2020
Presentation of detailed methods for the experiment, costing and baseline data identifies
Secure funding and delivering mechanisms to start the pilot
As immediate next steps, the study team will now invest in understanding how to articulate the pilot basic income with the existent Social Benefits structure (in partnership with the Child Poverty Action Group). In parallel, it will also entail “economic modelling of broader and second order impacts on the local and national economy”, as well as “modelling (of the) the impacts of CBI (Citizens Basic Income) on income and poverty”. In this core stage of the feasibility study, funding and payment option will also be analysed in detail, while interaction with the several stakeholders and partners is deepened.
It seems that the Scottish approach to a basic income pilot is mostly from the bottom-up, in an attempt to articulate the operation of existing income distribution rules with the new element of basic income. This may not only be a necessity to effectively develop the basic income pilot, but makes sense in a more general and longer-term view of implementing a basic income in the region, further down the road. In any case, further important updates will come to us in September this year.
On the 5th of March 2019, Basic Income Earth Network’s (BIEN) chair, Louise Haagh, will speak at the Café Economique, in Leeds, UK. The event is called “Basic Income and Democratisation”.
Café Economique is an initiative in Leeds, UK, that aims to educate the public about contemporary economic ideas and policies. Inspired by “Café Scientique,” the volunteer group organises events at which “for the price of a cup of coffee or a glass of wine, anyone can come to explore the latest ideas in economics and related politics.”
Louise Haagh will talk about how her account of basic income differs from mainstream polemics about this topic. In her take, basic income represents broader development and governance challenges societies face today as a counterweight to the destabilising impacts of contemporary globalisation. Basic income will help address key inequalities, but not on its own. In her talk, Louise will also explain how basic income entails different challenges depending on the type of capitalist system, comparing the Nordic and Anglo-liberal countries.
