Basic income should replace benefits system, says charity

Universal basic income cropped  wide

Long term benefits in health and wellbeing, says RSA

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10th May 2019 by Graham Martin 2 Comments

The benefits system should be scrapped – and replaced with a basic income, according to a charity.

A new report recommends giving every adult in Scotland an annual wage of £2,400, rising to £4,800. Children would be paid £1,500.

The RSA (Royal Society for the encouragement of Arts, Manufactures) charity says this would end the stigma of receiving benefits, and also end the punitive Universal Credit regime.

There would be long term benefits in health and wellbeing, says the RSA.

The idea of the Universal Basic Income (UBI) has gained some traction in Scotland’s third sector.

And the Scottish Government supports proposed trials of the system by councils in Glasgow, Edinburgh, Fife and North Ayrshire.

The RSA report highlights trials in Canada and Finland which have suggested basic income could work without discouraging people from participating in the labour market.

Jamie Cook, head of the RSA, said: "It's an old idea. It is the idea that every person receives a regular, unconditional and secure payment from the state. It is money to give people the chance to make decisions in their life, to know that they have that money coming in on a regular basis.

"And particularly in contrast to the systems we have now, it doesn't place conditions, sanctions and punishments on how they use that money."

Communities secretary Aileen Campbell said: "In addition to delivering a better social security system built on dignity and respect, the Scottish Government is committed to reducing poverty and tackling inequality. Therefore, we are interested in any proposal that would help us achieve this, including lessons learned through international basic income pilots.

"That is why we committed to explore a Citizen's Basic Income (CBI) study and four local authorities have begun research into the feasibility of a CBI pilot.

"We welcome the engagement done by RSA on this, but any decision to proceed with a pilot is subject to the findings of the feasibility study which will set out full details of the ethical, legislative, financial and practical implementation of the pilot on the ground."

Earlier this week the shadow chancellor John McDonnell said the Labour Party would explore the idea.

10th May 2019 by Ruchir Shah

Basic income is one of the few ways (possibly the only way) we can detach workfare, where benefits is conditional on jobseeking, and therefore has given rise to the sanctions regime. If we want to really take a human rights approach to social security, then we need to take citizens/basic income seriously.

11th May 2019 by Gavin R. Putland

What's better than an unconditional Basic Income (BI) of $X/week? A punitive "vacancy tax" on vacant land and unoccupied buildings, which property owners are so keen to avoid that it *reduces rents* by $X/week. Why is this better? Because: (1) Nobody asks where the money is going to come from. (And the tax, in order to do its job, need not raise any revenue.) (2) By definition, the benefit of lower rents isn't competed away in higher rents — as a BI would be. (You don't see this problem with "pilot" basic incomes; but you *will* see it if the BI becomes universal.) (3) Avoidance of the tax generates job-creating activity. Moreover, if jobs are to be created, the employers must be able to afford business accommodation, and the employees must be able to afford housing within reach of their jobs on wages that the employers can pay. Lower rents therefore create jobs — reducing the need for a BI. (4) If the reduction in rents doesn't serve *all* the purposes of a BI, it reduces the size and cost of the BI needed to serve the remaining purposes. (5) The economic activity driven by a vacancy tax broadens the bases of other taxes, allowing their rates to be reduced — offsetting the tax impact of a BI, if you still want one!