Some reservations about Basic Income

Yesterday I was at the launch of the report from a seminar series organised by the Scottish Universities Insight Unit in conjunction with Citizen’s Basic Income Scotland.  My role has been as the resident sceptic; I prepared a series of background papers and a paper outlining the reasons for my doubts, and how they might be overcome.  The results are in the report, Exploring Basic Income in Scotland, available here.  There are my papers on Basic Income and Human Rights and Equality on pp 12-17, Care  on pp 47-52, Housing on pages 62-65.  The longer paper on Reservations about Basic Income is on pp 90-104.

The summary of those reservations goes like this:

Even if we accept all the arguments for Basic Income in principle, there are serious issues to resolve relating to cost, distribution, adequacy and practical implementation.

  • Cost. Basic Income schemes are all very expensive. The first question to ask is not whether we can afford BI, but whether we should – whether the money would not be better used in some other way.
  • Distribution. All the Basic Income schemes which have been developed to date make some poor people worse off. That mainly happens because they try to pay for BI by cutting or reducing existing benefits. Any scheme which does that it is going to benefit some people on higher incomes more than it benefits people on lower ones.
  • Adequacy. The treatment of existing benefits and of current tax allowances cannot work as intended. Basic Income cannot meet all the contingencies currently covered by social security benefits. It should not even try to do so.
  • Implementation. BI will not be without its complications. It is time to address them.

Basic Income cannot be ‘adequate’, but it does not need to be; it only needs to be basic. A modest income could be provided without damage to poor people, so long as it does not affect the status of other benefits.

 

2 comments

  1. Ian Davidson

    I am undecided re UBI. As with many things, it all depends on the economic and political context in which it is introduced. If it is introduced in the context of a commitment to greater income and wealth equality, with suitably progressive and effective tax collecting systems, then it might work and those who “didn’t need it” would pay tax on the extra income anyway. In the present context of neo liberalism and a tax avoidance culture amongst the wealthy, it would be an expensive mistake. In many ways, the UBI debate reflects the ongoing and unresolved debate re universal versus targeted/means-tested benefits. For example, the very live debate in anti-poverty circles re whether Child Benefit should be increased by £5 per week for everybody or whether, as Scot Gov may favour (when they get round to producing some proposals) a more targeted child income supplement for poorer families. In the current context, where millions of folks are struggling to survive from week to week, I am inclined towards enhancement of means-tested benefits plus targeting of public services towards the poor. In a more enlightened economic, political and social climate, universality may be more appropriate and thus the concept of UBI. What we should not do is use UBI as some kind of fantasy solution to the current endemic (and avoidable) levels of absolute & relative poverty in the UK as evidenced by the latest depressing stats released last week? Lets get a wealth* and/or land value tax in place before we consider UBI? ( *According to Andrew Conway, How Scotland Works, Luath 2018, pp118-9 a basic flat rate wealth tax of 1% could raise £8b revenue in Scotland; this is just an illustration of the various possibilities for such a tax).

  2. Malcolm Torry

    Dear Paul
    As I’m sure you know, the objections that you lodge against Basic Income are in fact objections to particular Basic Income schemes, and not to Basic Income. There are of course Basic Income schemes that are very expensive, that make poor people worse off, that don’t allow for different people’s different needs, and that would be difficult to implement. However, there are also Basic Income schemes – containing genuine Basic Incomes – to which the objections do not apply: for instance, https://www.euromod.ac.uk/publications/update-correction-and-extension-evaluation-illustrative-citizen’s-basic-income-scheme (updated research using the EUROMOD microsimulation programme will be available soon). If there is a single Basic Income scheme to which none of your objections apply, then none of the objections apply to Basic Income.
    Best wishes
    Malcolm
    Dr. Malcolm Torry, Director, Citizen’s Basic Income Trust, and Visiting Senior Fellow, London School of Economics

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