Universal basic income in the United Kingdom

Thomas Paine, an English-American philosopher and revolutionary, proposed a system whereby all citizens, when reaching adulthood, should be given an equal amount of money from the state. The idea was developed in Agrarian Justice, published 1797. The basic philosophical idea behind the proposal, explained in the book, was the contention that in the state of nature, "the earth, in its natural uncultivated state... was the common property of the human race". His contemporary and fellow pamphleteer, Thomas Spence, responded with a proposal that more closely fits the contemporary definition of basic income.[5]

The Speenhamland system was a form of poverty relief in England at the end of the 18th century and during the early 19th century. It started in the village of Speenhamland, but soon spread to most parts of the country. William Pitt the Younger tried to have the system implemented nationally but failed. Although it has one similarity to basic income, in that theoretically everyone was eligible, it was means-tested and it included work conditions and supervision that made it very different from basic income.[6]

C.H. Douglas, an early British proponent of basic income and monetary reform.

Even though basic income and related ideas had been proposed a few times before the 1920s (most notably Bertrand Russell in 1918[7]), it was not until then that a social movement seems to have started around the idea. Valter Van Trier has described this movement, which started in United Kingdom, in his book Every One A King.

The idea of basic income was revived prominently by Dennis Milner and his wife Mabel Milner in their pamphlet Scheme for a State Bonus: A rational method of solving the social problem published in 1918. Following this publication, the so-called "State Bonus League was formed in july of the same year. The League pushed the idea inside the Labour Party, which dedicated several hearings at the National Congress in 1920 and 1922, but the idea was eventually rejected.[8]

At the same time Major C.H. Douglas, a British engineer and social philosopher, developed a new economic philosophy which he labelled Social Credit. At the heart of the philosophy was a firm belief in the importance of individual freedom, but also that the monetary system had to be changed so that the market system could function properly. In short he combined monetary reform and basic income.

The Beveridge report, published in 1942, stated that social insurances should be the main system in society for economic security. Besides that the report also proposed a selective system for those without access to social insurances. Beveridge himself did not like means-testing and selectivism, because it created high marginal tax rates for the poor, but he nevertheless thought that it was a necessary complement. After the war the "Beveridge-model" became the guiding principle for the welfare state, both in Britain and internationally. Lady Juliet Rhys Williams proposed the "New Social Contract" as an alternative to the Beveridge Report. In short she proposed basic income in the form of a negative income tax, except that she also recommended a work test.

In 1972 the Cabinet of Edward Heath put forward a proposal for a tax-credit scheme which resembled a citizen's income in some ways but did not cover the whole of the population. In 1979 child benefit which is a citizen's income for children in all but name was introduced.

In 2015 the London-based RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) launched its own proposal for Basic Income entitled Creative Citizens, Creative State.[25] It advocated replacing a swathe of UK means-tested benefits with a single universal payment as a response to the changing landscape of work and an ageing population.

In March 2019, the New Economics Foundation (NEF) produced the report Nothing Personal: Replacing the personal tax allowance with a Weekly National Allowance. The report maintained that if the Government abolished the personal allowance of income tax and replaced it with a weekly cash payment of £48 a week it could lift 200,000 families out of poverty. The proposed policy swap would shift £8bn currently spent on tax allowances for the 35% highest income families to the remaining 65% of families.[26] However, the report was critical of the notion of a universal basic income, ie, a guaranteed income for all citizens.

Approximately a week after the report by the NEF, the think tank Compass published a report written by economists Stewart Lansley and Howard Reed.[27] Entitled Basic Income for All: From Desirability to Feasibility it suggested the government could make tax-free payments of £60 to every adult, £175 for those over 65 and £40 for each child under 18, regardless of other income. This would be designed to cut rising levels of poverty and inequality across the United Kingdom. Their report suggested the cost of reworking the tax and benefits system would be £28bn, less than the aggregate cuts to benefits since 2010 and the changes would return social security spending back to the level of a decade ago to help cover the costs of the UBI.[28] Lansley and Reed followed up this report with a second in 2019, that took a closer look at the financial possibilities of universal basic income in the UK.[29] In Basic Income for All: From Desirability to Feasibility, Lansley and Reed claim that "a meaningful basic income of, for example, over £10,000 per year could be paid to a family of four. Sums at this level, paid without condition, would significantly improve the living standards and life chances of millions of people and ... are affordable."

In May 2019, a report by Professor Guy Standing, commissioned by the Progressive Economic Forum and forwarded to John McDonnell (the acting Shadow Chancellor of the Exchequer) suggested different models for piloting basic income.[30] Standing's report (Basic Income as Common Dividends: Piloting a Transformative Policy. A Report for the Shadow Chancellor of the Exchequer) cites a "perfect storm" of factors that lead to the need for a basic income: Broad ethical justifications for basic income, which Standing cites as "social justice, security, freedom and solidarity" are now working in combination with urgent socio-economic demands. "A growing proportion of people," the report states, "are in the precariat, living bits-and-pieces lives, relying on low wages and incomes that are increasingly volatile and unpredictable and on inadequate and uncertain benefits in times of loss of earnings power."[30] Echoing William Beveridge's 1942 report suggesting the need for a Welfare State in the UK, Standing states there are eight modern giants, stretching form inequality, debt through to neo-fascism, that basic income could help tackle. The report is also highly critical of current UK welfare schemes, mainly Universal Credit, which he states are unfair for large families, have high administrative costs and limit personal freedom.[30]

Guy Standing, author of Basic Income: And How We Can Make It Happen and Basic Income as Common Dividends: Piloting a Transformative Policy.

The report deals with the most common objections to a basic income. To the objection that basic income is not affordable, Professor Standing said there are 1,156 tax reliefs in the UK at the moment and if they were scrapped that would pay for a basic income. "If we phased out those tax reliefs the total revenue foregone by the Treasury from tax reliefs is £420bn per year and that's their own estimates, not mine," he added.[31][30] He also suggests "a more general Commons Permanent Fund, in which a national investment fund would be built mainly from levies on commercial intrusions into the commons, boosted by contributions from a land-value tax, eco taxes, digital information levies and several others."[30]

There are currently no regional universal basic income pilots running in the UK. However, some proposals have been made. In 2018, the Scottish Government agreed to provide 250,000 GBP to assess the feasibility of a universal basic income pilot in four areas: Glasgow, Edinburgh and the regions of Fife and North Ayrshire. The feasibility study will be completed in September 2019, and the government will then decide how best to proceed with a pilot in the four areas.[32][33] The Royal Society for the Encouragement of Arts, Manufactures and Commerce has also produced a report examining some of the benefits and challenges of a basic income system in the region of Fife.[34] And in 2019, the council of Sheffield agreed to work on ensuring that "UBI can be implemented successfully in Sheffield”.[35] The council of Liverpool has also shown enthusiasm for experimenting with a basic income.[36]

There are also several critics on both the right and left wing. The Conservative MP Nick Boles, is one of them. According to Boles the talk of basic income as a response to the rise of robots is “dangerous nonsense”. The main argument against basic income for the Conservatives, he argues, should be that it is morally wrong. In his forthcoming book Square Deal he writes: “Mankind is hard-wired to work. We gain satisfaction from it. It gives us a sense of identity, purpose and belonging … we should not be trying to create a world in which most people do not feel the need to work.[37] Ian Goldin, Professor of Globalisation and Development at the University of Oxford, has written against UBI claiming it "will lead to higher inequality and poverty" and "undermine social cohesion." [38] Various left-wing pressure groups and think tanks share such suspicions. A report by DPAC (Disabled People Against Cuts) consider that "the need to finance universal basic income payments could lead to even more pressure to save money by restricting eligibility [for welfare payments for the disabled] than under the current system.[39] And the left-wing New Economics Foundation concluded that "UBI is an individualistic, monetary intervention that undermines social solidarity and fails to tackle the underlying causes of poverty, unemployment and inequality."[40]