Covid 19 commentary: Trialling a universal basic income revisited

In mid-April, we put forward this argument to trial a Universal Basic Income.

Others put forward the same notion. Although Prime Minister Boris Johnson suggested it on 19th March (see this Daily Mail report), it was rejected by Chancellor on 24th March (see this Independent report) and again on 14th April (see this Daily Mirror report and this in The National).

The economic damage caused by Covid-19, both in the UK and across the world, is considerable. And, as lockdown eases, the full extent of that damage will be seen, as illustrated by this story about a small company:

The strategic and tactical reasons we put forward in mid-April, replicated below, are even more pertinent now:

Why recommend this? Two strategic reasons:

  • To enable recovery from this crisis and our preparedness for the next one
    The population will make a better recovery from this crisis if they have the financial means to be agents of their own health and well-being, and will be better prepared for future crises.

    • Crucially, it will protect and give agency to those most vulnerable to the economic effects of the current situation. Consequently we will be better prepared as a society for future crises (whatever they may be; for examples, scroll down to the background info in this Covid-19 blogpost of 21st March)
    • Stark social inequalities in the UK pre-existed Covid-19, and will greatly increase without such measures.
      • Thus access to a nutritious and balanced diet for children and adults will not be equal, with those previously disadvantaged becoming more so through reduced income.
      • This will in turn lead to impacts on the health and wellbeing of both children and adults.
        • Note, in particular, that with the closure of schools, previous much needed nutrition for children, vital for their physical and cognitive development, is greatly reduced, despite efforts to address this challenge.
  • To use this crisis as a unique opportunity to carry out a UBI trial:
    • A time-bound but flexible trial gives the Government and society at large the chance to test the extremes of the impact of a UBI, and iron out the kinks before considering a full roll-out.
    • In the food sector there is an urgent scramble to invest in robotics and automation, a situation being replicated across other sectors. The consequences of this will be more people without work, or being part of the ‘precariat’.
      • A pilot UBI now is therefore timely.

As the infographic points out, the answer to the question about when we need plan for recovery or preparedness for the next crisis is always now.

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Why recommend this? Four tactical reasons:

  • Every form of means testing takes time — and when it comes to food and shelter, too many households are in crisis or on the brink of crisis. UBI + child benefit increase can be implemented in a far shorter timescale.
  • Means testing is administratively costly.
  • It is inevitably inaccurate to some degree, leading to individuals and households slipping through the net.
  • The UBI should be taxable, so the Government will get back some of this investment
    • At what rate of tax, by whom and when payable are all aspects of the scheme that can be tested during a trial.

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