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Universal basic income

(86 Posts)
Antonia Sat 15-May-21 12:54:49

Wales is set to trial universal basic income. Detractors say that apart from being too expensive, it could increase poverty. I am unable to see how it could actually increase poverty but not sure if it's a good idea or not.
I can see that it might be a disincentive to looking for work, but if the jobs are not available, then what are people supposed to do?

icanhandthemback Sat 15-May-21 13:02:00

It has been trialled in other countries without a great deal of success. On paper it looks like a wonderful idea but in practise it is very expensive without the benefits one would assume it would bring.
The system we have now disincentives people from working and is very stressful for those who have no choice but to claim. I'm not sure what the answer is. The tax credits system should be scrapped immediately. It never ends well for those who rely on it as mistakes always seem to be made which end up with people having to pay back huge amounts. I haven't met anybody yet who hasn't had this problem. Despite giving all the correct information at the time circumstances changed, my daughter is currently paying a debt off which stands at £3000. She is disabled and her benefits come from one source, the tax credits from another and they just don't do joined up thinking. It is a nightmare.

Ilovecheese Sat 15-May-21 13:30:56

A proper trial is probably the best way to find an answer about universal basic income. Opinions vary and are sometimes just based on feelings instead of evidence. Unless we try it, we will never discover whether it is a good idea or not.

Ilovecheese Sat 15-May-21 13:33:08

For one thing, some people see it as a disincentive to look for work but others think t is an incentive to be more entrepreneurial without being put off by the huge financial risk, because the basic income will be there.

Ilovecheese Sat 15-May-21 13:35:48

Without a proper trial, how will we find out.

PippaZ Sat 15-May-21 14:04:48

icanhandthemback:

It has been trialled in other countries without a great deal of success. On paper it looks like a wonderful idea but in practise it is very expensive without the benefits one would assume it would bring.

Your opinion icanhandthemback; certainly not the one all countries/states have found. Some of the so-called trials have not been for UBI they are more like the introduction of a benefits system where one currently doesn't exist and they certainly have their drawbacks.

Antonia You might find I feel this site basicincome.org/ interesting. Many countries/states are looking at it because of the pandemic.

In the trials I have read about there is no greater disincentive to work than we have now. The groups not working, when the IBU is enough to live on, includes parents - often mothers - of very young children and those training for a career change.

I agree Ilovecheese How will we know without trialling it? Strangely enough, the rich with sufficient to live on without working have been making life-changing decisions or going into more vocational work that pays less (ladies and their charities) for centuries and this has never been castigated as shirking.

Tony Blair has written a very interesting article in the New Statesman this week. In it he says:

A myriad of small firms and the self-employed will be central not peripheral to the future.

It is the same with public services. The way we teach and provide medical care and education will change dramatically, and therefore old ways of working will decline.

It is my opinion that IBU could be an extremely good way of underpinning the changes that will come. Working with them seems to be better than working against them.

The current Benefits system is certainly not fit for purpose. It is wasteful, often doesn't solve the issues it is trying to address, and rarely if ever solves them quickly enough. Although IBU can seem expensive I wonder if it is, particularly if you cost it over time.

www.newstatesman.com/politics/2021/05/tony-blair-without-total-change-labour-will-die

growstuff Sat 15-May-21 15:22:18

The issue is the level at which UBI would be set. The pre-Covid level of just over £73 per week for the unemployment element of UB was ridiculous. It needs to be at least double, but then people who really don't need the money would be receiving almost £150pw. On the other hand, it's nowhere near enough for people with housing costs. Maybe it could be reclaimed through the tax system.

The only way to find out is to trial it, so the results of anything done in Wales will be interesting.

varian Sat 15-May-21 15:49:08

A two year trial in Finland found that Universal Basic Income seems to improve employment and well-being

Read more: www.newscientist.com/article/2242937-universal-basic-income-seems-to-improve-employment-and-well-being/#ixzz6uwf4oszH

growstuff Sat 15-May-21 16:01:57

That article seems ambivalent at best about employment.

PippaZ Sat 15-May-21 16:02:26

The tax system would have to ensure that everyone paid their share which, I believe, would mean a readjustment on unearned income. One of the suggestions is that, with UBI payments, you drop the Personal Tax Allowance and each person gets something more like £240 a week. All income-related benefits would go and there is even an argument that some other benefits would go.

The challenge would be housing but we have long needed to readdress social housing.

For those who haven't seen them these are the five characteristics of Basic Income:

1. Periodic—It is paid at regular intervals (for example every month), not as a one-off grant.

2. Cash payment—It is paid in an appropriate medium of exchange, allowing those who receive it to decide what they spend it on. It is not, therefore, paid either in kind (such as food or services) or in vouchers dedicated to a specific use.

3. Individual—It is paid on an individual basis—and not, for instance, to households.

4. Universal—It is paid to all, without means test.

5. Unconditional—It is paid without a requirement to work or to demonstrate willingness to work.

welbeck Sat 15-May-21 18:04:48

well if it would pay carers more than £67.60 a week, that would be progress.

growstuff Sat 15-May-21 18:25:36

Pippa Although I now have my state pension, on that basis I would have been poorer than I was before my pension started. I had been claiming UC, which worked out that I needed a minimum of £271pw to live (I pay rent).

The Joseph Rowntree Foundation, which campaigns against poverty, has done its sums and calculated that the poorest would actually end up poorer with UBI. I haven't looked into the details, but I do respect the JRF.

PippaZ Sat 15-May-21 19:37:49

Sorry growstuff, I thought I had said somewhere that housing is an issue that would have, as things are at the moment, to remain over and above UBI in my opinion.

The way that housing is at the moment (and I have no answer to how we can improve it but we need to find one) I can't see how we could find a way that would take it into account. £240 is where Personal Tax Allowance starts so someone thinks we need at least that to live on. The other thing that would have to change - in my mind - would be council tax but I have always thought that should be a local income tax. It is complicated. My daughter has just sent me a link to an article on the trials proposed in Wales. It will be interesting to see what they find. She knows I'm a bit obsessed with it. I think we could improve lives and, once it's going I believe it would cost less - no sending out letters to tell you your money is coming at Christmas for a start smile or having a bank of people to deal with "changes to circumstances", etc.

www.bbc.co.uk/news/uk-wales-politics-57120354

Doodledog Sat 15-May-21 19:58:44

I think it would need to be very careful to ensure that people like unscrupulous landlords can't benefit from the fact that people are paid after housing costs, and put up rents (or basically have them paid for by taxpayers), and that employers don't cut wages to compensate for the fact that people will get a basic amount whether they work or not.

Tax credits were guilty of this, I think. The taxpayer subsidised employers' profits because workers on low incomes could claim back money in credits. I always thought that this was a disgrace, as it trapped the workers in poverty, and gave even more profit to people who did not pay their staff decent wages. To make matters worse, this subsidy would often come from the pockets of people on low wages themselves.

As housing costs (and profits) vary so much across the country, they would have to be considered very carefully before adding them to the equation, I think.

growstuff Sat 15-May-21 20:34:12

Pippa Yes, you did mention that housing costs are an issue. Even now with state pension, my rent and council tax is nearly two thirds of my income - so it's a big issue!

My concern is that some bright spark thinks UBI is in theory a wonderful idea, but doesn't do modelling for everybody who would be affected. I've seen so many times that changes are made and minority groups (maybe just a few hundred thousand) are ignored.

Housing in the UK is a huge issue and I would rather somebody sorts something out before introducing something like UBI.

PippaZ Sat 15-May-21 20:39:06

I think that, along with care, social housing has been put in the "too difficult" box far to often Doodledog and, without decent social housing there will always be pressure on the private lettings market. This is why I think it will have to remain outside the UBI.

growstuff Sat 15-May-21 20:39:28

Doodledog The Local Housing Allowance cap means that landlords can't benefit from the way benefits are paid. The way UC is calculated (or was before Covid) also means that very few people in paid employment actually qualify for it anyway. The old system whereby employers could get away with paying poverty wages no longer exists for the majority. The real problem for most people claiming benefits is that they are are expected to live on £73pw before housing costs. In most cases, they actually receive less because they are expected to contribute towards housing costs.

PippaZ Sat 15-May-21 20:51:53

growstuff

Pippa Yes, you did mention that housing costs are an issue. Even now with state pension, my rent and council tax is nearly two thirds of my income - so it's a big issue!

My concern is that some bright spark thinks UBI is in theory a wonderful idea, but doesn't do modelling for everybody who would be affected. I've seen so many times that changes are made and minority groups (maybe just a few hundred thousand) are ignored.

Housing in the UK is a huge issue and I would rather somebody sorts something out before introducing something like UBI.

Really good points growstuff and a lot of work to get there but I think it's worth it. It will be interesting to see how the trial in Wales goes. I think Mark Drakeford agrees with you.

Mr Drakeford said a pilot would "need to be carefully designed to make sure that it is genuinely adding income for the group of people we are able to work with.

He added: "It'll have to be a pilot because we don't have all the powers in our own hands to do it on our own.

It'll have to be carefully crafted to make sure that it is affordable and that it does it within the powers available to the Senedd.

Doodledog Sat 15-May-21 20:52:15

Maybe if housing costs were capped if would reduce the gap between the SE and the rest of the country?

Bringing in something as radically different as this is pretty much guaranteed to leave casualties, though. Particularly for people in later life, who have gone through life with the current situation, and 'played by the rules' until it is too late to start again with new ones.

I agree that to be fair it needs to be thought through for everybody, but these things never are. I'm not even sure if they can be, really, given that there are always so many differences in circumstances, and that people have done what seemed right in the circumstances at various stages of their lives, and then find that if they hadn't done x (which seemed the best way at the time, and may have involved sacrifice) they would have benefited under the new system. Maybe doing what is best for the greatest number is the way forward?

Doodledog Sat 15-May-21 20:54:20

Sorry - I wrote that before reading your points (by husband arrived with dinner, and I stopped half way through my post 😃). I will go back and read the last few posts, and apologise in advance if I have repeated anything that has already been said, or appear to have ignored points that have been made.

PippaZ Sat 15-May-21 21:05:33

It's difficult Doodledog but to me putting people back in charge of their own lives would be such a step forward.

growstuff Sat 15-May-21 21:07:03

How would you cap housing costs?

Housing benefits are already capped, but rents have continued to rise.

growstuff Sat 15-May-21 21:08:33

Pippa People could have more control of their lives in there were a recognition that the level of benefits (especially working age benefits) are totally inadequate.

growstuff Sat 15-May-21 21:09:16

How are working age people expected to survive on less than half the full state pension?

Polarbear2 Sat 15-May-21 21:26:45

Brilliant idea. I’m all for it. If done properly it could revolutionise our lives. Read Rutger Bergman.