Time to introduce UBI?

Shadow chancellor John McDonnell suggested the idea

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Will the UK adopt Universal Basic Income?

By Joe Harker

Universal Basic Income, or UBI, is the idea of giving every adult citizen a basic amount of money to help with living costs. It won't lead to an affluent lifestyle but it's enough to cover the cost of some food and bills.

The idea has been trialled around the world though it has yet to gain mainstream political approval or be rolled out in any country nationwide. Rich or poor, working or unemployed, everyone would receive the same amount under UBI.

With even people in employment struggling to make ends meet UBI has been touted as a potential solution to working poverty and a possible replacement for unpopular benefit schemes such as Universal Credit.

The Claim:

Shadow chancellor John McDonnell said Labour would begin pilot UBI schemes in Liverpool and Sheffield if it formed a government, reports the Daily Mirror.

He submitted a feasibility report for introduction in the UK and suggested a city in the Midlands would also be selected as a trial location for the policy.

Different cities may be given different models of UBI to test, including one where every adult is paid £100 a week plus £50 for every child they have.

Describing it as a "radical idea", McDonnell suggested the policy wouldn't be all that different from child benefits.

Ideally the money people received from UBI would be used to provide financial security so people could set up businesses, fund studies and feel able to leave work if they had to care for a family member.

The Counter Claim:

Writing in The Guardian, Anna Coote argues that UBI trials have proven the policy doesn't help lift people out of poverty.

She writes that a new study of trials conducted in different countries suggested rolling the policy out nationwide on a long term basis was not the solution many thought it might be.

With so many different UBI models being trialled it is hard to identify whether lasting improvements to quality of life can be made. Trials being conducted often used poorer people so information on the impact of UBI on the rest of the population is scant.

The study predicts that UBI would swallow up between 20 and 30 per cent of a nation's annual budget if it was rolled out to everyone.

John Kay, former director of the Institute for Fiscal Studies said UBI fell into the trap of either handing out amounts of money that were too small to make a significant difference or costing too much to the taxpayer to implement.

The Facts:

UBI trials were first conducted in the US in the 1960s, while more recent trials have been used African, Asian and European nations including Scotland.

Finland have conducted one of the most extensive UBI trials, finding that paying everyone some money made them much happier but didn't make them more enthusiastic about getting jobs. They had the same motivation to seek employment as a control group that didn't receive money, but they were much happier and psychologically better off than the control group.

Participants in the trial suggested the initial goal of getting them into work was flawed but praised the scheme for improving their wellbeing.

Researchers are now trying to determine whether the trials were a success and what exactly the goal of UBI is supposed to be. It seems to make people happier and better off, but not necessarily more willing or able to work.

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