What if Universal Credit and all other benefits were scrapped for good and everyone was instead paid a basic income, whether they were working or not?
It may sound like a crazy fantasy but the idea has actually been tried out in Finland and several other countries including Canada. The Netherlands and parts of the USA are also interested in trying the scheme.
And now the UK Government is being urged to look at the idea and test it here.
A poll in September 2017 has already found that 49 percent of UK adults support the idea of this ‘basic income.’
Anthony Painter, director of research and action at the Royal Society For The Encouragement Of Arts, Manufactures And Commerce (RSA), said the Finnish experiment indicated there was a strong case for something similar to be tried in Britain.
He said five places – four of them in Scotland – had already volunteered to try the scheme out.
Mr Painter said: “The UK government must support the Scottish government’s exploration of a trial and act to establish pilots in the rest of the UK.”
How much would it be?
The RSA is calling for a payment of £3,692 a year for all qualifying people between the ages of 25 and 65, while those over 65 would be paid £7,420.
That equates to £71 a week for those aged 25 to 65, and just under £143 a week for those over 65.
It would replace all other state benefits and be given to everyone, whether in work or not.
There would also be a basic income for kids aged 0-4 of £4,290 a year for the first child and £3,387 for other children aged 0-4.
The payout would be reduced for a third child or more, potentially to zero.
Once youngsters start school, the payments would drop because parents would be able to work more hours.
The scheme would essentially be funded by a charge on people earning more than £75,000 a year.
The RSA believes that by getting rid of benefits (except those relating to disability and housing), the Government would save a whopping £272 billion.
It also proposes that the Government should give £10,000 to every person in the UK under 55.
The only catch would be that people would have to explain how they intended to spend the money. It would be paid as a £5,000 dividend for up to two years.
This cash would come from a proposed Universal Basic Opportunity Fund (UBOF), which would cost around £14.5 billion a year and would be funded by higher taxes on top earners or large corporations.
The RSA suggests the Government could borrow £200 billion while interest rates are historically low to establish the fund, which could be recouped through the economic growth that is predicted to happen as a result.
Mr Painter said: “The simple fact is that too many households are highly vulnerable to a shock in a decade of disruption, with storm clouds on the horizon if automation, Brexit and an ageing population are mismanaged.
“Without a real change in our thinking, neither tweaks to the welfare state nor getting people into work alone, when the link between hard work and fair pay has broken, will help working people meet the challenges ahead.”
So what happened when it was tried in Finland?
We spent an hour outside a Birmingham job centre and found people struggling to cope
Finland has just completed a major experiment in which it paid 2,000 unemployed people 560 euros a month – equivalent to £490 – for two years, instead of benefits.
This was paid with no strings attached, reports the Mirror. Those getting the payout were not required to seek or accept jobs and STILL received the money if they found a job.
The Finnish government wanted to see if it encouraged people to get jobs or start businesses
One man, who had been made redundant, said it felt like he’d ‘won the lottery’ and said the basic income helped him, but he wasn’t sure how he’d manage when it ended.
And one woman said it was a ‘genius idea’ that offered financial support when she got a low-paid telesales job. She said she was able to shop in a supermarket for the first time instead of relying on her parents’ food.
Source : BirminghamMail