The Idea Behind Universal Basic Income

A new scheme giving participants £1,600 a month is being trialled in two different places within England. This is happening to see if the idea of a universal basic income would be sustainable and workable on a small scale. For two years, the participants will be monitored to see how this income affects their mental and physical health.

30 participants will be paid this money on a non-conditional basis for 24 months, either living in Jarrow or East Finchley. The £1,600 figure is relatively high, but the purpose of the pilot programme is to see what this does to people’s physical and mental health. There is no condition to work, but there is also nothing stopping participants from continuing with their occupation.

Andy Burnham, Mayor of Great Manchester, is behind the idea, believing it will give people a lot more security without having to worry about everyday essentials. Universal basic income offers economic security to the masses, bringing everyone above the poverty line.

While support is meant to be a flat rate for easier implementation, critics argue that targeted support would be much better. The cost of goods and services will be different depending on where you are in the UK, but by making universal basic income means-tested, it removes the simplicity of the solution.

There have been calls for universal basic income in the past, and the idea was toyed with by over 170 MPs during the pandemic. With the cost of living crisis and the state of inflation, some people believe now is the right time to implement this idea.

During the course of the programme, a control group will be monitored but not paid the £1,600 a month. It’s expected that promising results will be seen from this programme as wellbeing will be instantly boosted. Many people believe that the next decade will see a form of universal basic income as several economic shocks are expected.

A similar pilot was conducted in Wales between July 2022 and June 2023. Anyone leaving care after turning 18 in that time could receive £1,600 a month for 2 years. The programme was set to run for 36 months, with people dropping out after their 2 years were completed. They would still pay tax on this amount, which would reduce their entitlement to £1,280, but by providing a basic level of income, they’ve got automatic support.

Thinktank Autonomy is behind the universal basic income trial in England and they believe it will simplify the welfare system and tackle poverty at the same time, even on a small scale. It’s also meant to be a guard against factors that could significantly disrupt everyday lives, such as climate change and the automation of technology.

Critics of universal basic income say it’s expensive. The trial in England is expected to cost £1.6 million – and that’s just for 30 people. On a national scale, this will rise to mind-boggling numbers. Not only this, but the funds would need to be raised through massive reforms in the tax system. Even if participants have no other form of income, they will still pay £176 in tax each month, but additional funds will need to be raised elsewhere to make this viable.