Scotland is poised to join Finland and Canada in testing Universal Basic Income (UBI), a welfare system in which all citizens are given a fixed sum of money, regardless of their income or employment status. Any money earned from salaries or businesses is then taxed progressively. Read more about UBI here
Proponents of UBI say that it could empower people by offering them the flexibility to earn, learn, start a family or a business, safe in the knowledge that they will have enough money to get by. It is seen as a means to reduce welfare dependency and income inequality.
Critics believe UBI is nothing more than a socialist utopian ideal or “fairytale”. They say that it would be unaffordable, leading to tax hikes and discouraging business investment whilst causing a drop in productivity. They also argue that, given everyone would receive the benefit, it would do nothing to combat inequality.
As Fife and Glasgow look into establishing trial schemes for 2017, Finland is already one step ahead. Though some smaller, successful trials have gone on at local level since the 1970s from India to the United States, Finland will be the first to conduct a UBI experiment on such a scale. The two-year pilot scheme will provide 2,000 – 25 to 58 year-old, unemployed Finnish citizens with a monthly basic income of 560 euros replacing their other benefits. They will continue to receive the UBI even if they find work.
For Kela, the organisation running Finland’s social security and managing the pilot scheme, the hope is to see an increase in employment and a reduction in the current costly bureaucratic mechanisms which can, reportedly, discourage some people from finding employment.
Scotland has seen a huge increase in health inequality, poverty and the use of food banks in recent years. In Glasgow where one-third of all children are living in poverty, the idea is being warmly welcomed by the public and supported by both the SNP and Labour.
The Guardian quoted radical Economist and UBI champion Guy Standing on the subject. It said: “The sense of insecurity, the stagnating living standards, all of those things are clear in Scotland and the fact that so many within the SNP are supportive means there’s a real opportunity to do a pilot in Scotland… People relate to the idea that everyone should have a social dividend. Everywhere I go, it’s the communities that feel left behind by globalisation that are most interested [in the idea of a basic income]. We have seen a sea-change in attitudes.”
UBI is still a pipe dream for most, even Finland is only at the very beginning of a long and time-consuming study but if the results are promising, this could mark a new era in the relationship between the individual and the state.