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Universal Basic Income – An Idea for Now?

Written by on 1st June 2020

Over the past couple of months, we have been interviewing guests on the theme “Coronavirus Impacts & The Way Forward for Scotland”. And most of guests have talked about the idea of a universal basic income as a possible way forward, either in the short to help our economy recover, or as a permanent social security policy.

So we thought it would be a good idea to interview someone who could educate us about the pros and cons of a basic income and indicate whether they think it is an idea whose time has come. That person was Craig Dalzell, head of policy and research at The Commonweal.

Craig Dalzell, Head of Policy & Research, Commonweal

You can listen to him here:

What we talked about with Craig:

When did UBI become part of Commonweal thinking?

  • It was first mooted in 2013 when Commonweal was still a campaign within the Jimmy Reid Foundation. 
  • a paper was produced which described the benefits of UBI and included a costed model for Scotland. 
  • other organisations have also done a lot of work on it, eg Citizens Based Income Network, RSA Scotland  and Reform Scotland who are much more to the right politically than Commonweal.
  • Craig returned to the idea in 2017 when he produced potential options for a social security system for an independent Scotland.
  • that model was for a low level Basic Income, much like the current Universal Credit level. It laid out the basic argument that it could be done, leaving the question of what level to set it at for later discussion,
  • Currently >60% people in Scotland are favour of UBI just now as an aid in coronavirus economic recovery, and ~50% support maintaining it further into the future. (PanelBase Poll, May 2020)

Is UBI possible in Scotland under our current constitutional arrangements? 

  • If we have the political will we should try to do it until we hit a barrier!
  • but it would be difficult with current powers, we don’t have full control over income tax powers, and much social security infrastructure is still controlled by DWP and HMRC
  • We need to think about how a UBI in Scotland would interact with other benefits, especially Universal Credit where giving Scots a basic income just now would just result in it being taken back them under UK UC rules.

How does concept of UBI mesh in with existing benefits system?

  • Think of it as a cash payment to every individual sufficient to cover their basic needs
  • It largely replaces the existing system … Universal Credit mostly, carers allowance, child benefits but maybe not the housing benefit element of UC.
  • You need to work our which to replace and which not to replace. So certainly not disability payments which are for additional needs. They could be done more fairly but they need to be protected. Maybe State Pensions too could be replaced too, if UBI is at a substantial level.

How would Treasury recoup costs of UBI from tax?

  • The 2017 Commonweal Social Security For All of Us paper is a revenue neutral model
  • they found that an extra £8billion was needed to do it and worked out what changes in national insurance and income tax would be needed to raise that.

Benefits of UBI

  • it gives stability of income and that benefits even relatively high wage earners if their income is sporadic
  • It benefits anyone who wants to start up a business by giving them stability
  • so as well as benefitting social justice it also supports entrepreneurship and creativity

Craig, if you were Chancellor of Exchequer instead of Rishi Sunak, would you have brought in UBI?

  • it would have helped more people more immediately.
  • remember targetted systems have to be policed,
  • there are costs, you have to find people who are eligible and also those who don’t claim….. as well as people who claim who shouldn’t.

It is a policy that is also promoted by some very right-wing think tanks. Would it be harmful in the wrong hands?

  • From a left wing point of view, it meets our basic needs and helps us take part in society creatively 
  • From right wing point of view, its function is to give everyone cash. They then have to buy everything they need from the free market, and everything means everything – education, water, sewage, health, etc.
  • So there is a very different vision there. But that’s OK. That can be argued out and people will vote as they think best.

Do you think Rishi Sunak could have done something like suspending payments for utility bills? Is that possible even at a UK level?

  • Some things could be suspended even in Scotland like water which is publicly owned here.
  • Some countries have been suspending rents, not just deferring them
  • And also mortgages. Here in UK, although the payments have been deferred, the interest is still being charged. 
  • Utility payments could just be cancelled. And that would either mean that the utility companies take the hit or that the government covers that.

Do you think concept of UBI further on to the agenda. The Social Justice & Fairness Commission is pushing it. Ian Blackford raised it at PMQs. Is it becoming more achevable?

  • Arguments for it have not changed.
  • People are more knowledgeable now.
  • Maybe what was once thought good but not possible is now seen as good and more realistic.
  • What is needed is the political will.

How it would actually work?

  • If we were implementing it right now we would have to use the systems we have at the moment. Using HMRC to make payments might work well but there are people without a tax code.
  • Or we just find everyone with a bank account and work with the banks. That would help with people who are self employed and some others. 
  • It could be a one-off payment to everyone.
  • Or everyone could be given a UBI debit card linked to a general bank account. So people could take money out but not pay money in. There are difficulties with that too – how do you identify everyone to get them a card – but they are solvable. 

One problem is that rural banks are disappearing.

  • Yes. We need to think through different kinds of banking systems.
  • Bringing back local banks, community mutually owned banks.
  • Or even micro banks which fit inside a shipping container and you get access to it with your bank card.

Public support for UBI is reported to be 62% in favour. 

  • Yes and a PanelBase poll this week shows similar support.
  • It has majority support among all parties to be brought in during crisis.

We asked Craig if he is optimistic that something along lines of UBI might emerge? 

  • Sceptical about it happening in UK,
  • He’d like to think an independent Scotland would bring this in.
  • He’d like Scotland to be first country to bring in a truly basic income.

Everything is impossible until it is inevitable. Or until it happens.