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.