A smattering of English households will receive monthly payments of £1,600 from the government for doing nothing if a trial of universal basic income is implemented.
Universal basic income is the notion that giving all citizens the same quantity of money would reduce poverty and reduce the cost to taxpayers of operating a complex means-tested benefits system.
However, it has also been met with fierce opposition from critics who believe the plan is costly and could backfire.
This week, the think tank Autonomy released detailed plans for how a universal basic income trial in England might operate.
Under the proposed proposal, thirty individuals would receive $1,600 per month for two years. Autonomy is currently seeking funding, so the program is not yet active.
However, the concept of “money for nothing” has captivated the public’s imagination and sparked a heated debate about the pros and cons of such a plan.
Here is all the information you need about the most recent UBI proposals.
What is a basic income for all?
Universal basic income is a system that pays the same quantity of money to all citizens, replacing means-tested benefits.
To qualify, these payments must be made regularly, not in one lump quantity.
The funds must be distributed in the form of cash, not vouchers so that the recipient can determine how to spend it. The payments must be made to everyone, regardless of means or other restrictions.
Under the proposals of Autonomy, each participant in the trial would receive £1,600 per month.
If they have no other income, they would pay £176 per month in taxes and retain the remaining $1,423.35 each month.
The operation of the Autonomy program would cost £1.6 million over two years. The thirty claimants would receive £1,100,000, while the remainder would be used to operate the program.
What is the purpose of a basic income for all?
According to proponents of the system, there may be several societal benefits. First, it could reduce destitution by providing individuals with monthly payments even if they are unemployed.
These payments could also encourage children to remain in school rather than depart to support their families through employment.
The New Labour government acknowledged this principle by introducing education maintenance allowance payments to encourage children to remain in school. The program was terminated in England in 2010, but it persists elsewhere in the United Kingdom.
Some argue that a universal basic income could reduce crime by reducing the need to violate the law to survive.
The regular payments could also assist carers and volunteers, who must present work in addition to their unpaid obligations.
It could also assist those who may lose their jobs as a result of increasing automation and artificial intelligence.
The majority of universal basic income plans provide just enough to fund essentials such as rent and food.
Paying everyone the same amount is a straightforward system that reduces the cost of administering multiple state benefit programs.
It also eliminates the need to register for benefits, which some individuals find challenging or impossible.
The purpose of the Autonomy pilot is to evaluate universal basic income on a small scale and determine its viability.
Will Stronge, director of research at Autonomy, stated, “A guaranteed basic income could be revolutionary for welfare in this country.”
All evidence indicates that it would directly alleviate destitution and improve the well-being of millions of people: the potential benefits are simply too great to ignore.
Basic income will play a crucial role in securing future livelihoods, given that the coming decades will be filled with economic disruptions resulting from climate change and new forms of automation.
What are the disadvantages?
The evident disadvantage is the scheme’s operating expenses. Free money might increase inflation and raise food and other costs, negating the benefits.
The universal basic income may marginalise those who need greater state subsidies.
Some argue that it also penalizes people who reside in more expensive regions of the country since the amount is not typically adjusted, but consumers in some regions will be required to spend more on housing and food, for example, than in other regions.
There is also a possibility that recipients will misuse the funds. This could be a significant issue under UBI, as the scheme would typically supplant all other benefits.
According to the Autonomy report on UBI, “potential risks must be managed.” These include those about community cohesion, ‘hedonistic’ expenditure of additional income on items such as alcohol and cigarettes, and transitions to and from the payments.
However, Autonomy added that a stable, predictable income encourages long-term thinking and reduces hedonism.
