Universal basic income may not be popular but it could soon be necessary

Editorial: It is a valuable experiment and a glimpse into the future

No jurisdiction in the world has adopted a basic income, not least because of the resentment it usually provokes among the better off (Reuters)

A remarkable, indeed potentially revolutionary, experiment is about to be visited upon Jarrow and East Finchley. A small sample of people are being selected for a basic income scheme, whereby they will all receive some £1,600 a month.

A disproportionately high number of people with disabilities will be invited to join the pilot scheme, the better to understand how it might help those most usually facing discrimination, lack of work, and with sometimes a higher cost of going about their lives.

Before anyone gets too excited, no taxpayers’ money will be harmed in the pilot scheme, which is being run by researchers from the University of Northumbria and funded by Basic Income Conversation, a campaigning group.

Needless to say, it hasn’t anything to do with the Department for Work and Pensions, which finds it hard enough to administer Britain’s byzantine benefits system. It’s the first such pilot in England, and one of the first in the world, though the Labour administration in Wales is also trying it out in selected areas.

As yet, no jurisdiction in the world has adopted a basic income, not least because of the resentment it usually provokes among the better off, but there are good reasons to believe that some sort of basic income payment might well become inevitable in the decades ahead.

Even now, it has much to commend it. It dispenses with the horrendously complicated universal credit system introduced a decade ago. Ironically, the aim of its proud parent Iain Duncan Smith, the then-secretary of state for work and pensions, was to simplify the overlapping tangle of means-tested, taxable, non-taxable and universal benefits payments.

That ambition, however, did not long survive the attentions of George Osborne’s Treasury, which regarded it as a way of reducing the social security bill. Mr Duncan Smith quit in despair, and universal credit, with its periodic cuts, complications and fragile IT system, has staggered on.

If it is to be reformed, to adjust to the changing ways we work and live, then an element of basic income could be a step forward. Indeed, its critics might be surprised to learn that a limited version already exists in the form of the state retirement pension and, to a lesser degree, in child benefit payments.

Basic income should ideally allow a substantial contribution to basic subsistence, either at or near some accepted poverty line (itself a hotly contested concept). But it need not be paid at anything like, say, median earnings.

As such, it would provide for some sort of unbreakable safety net for the homeless, for example, and it could greatly increase the incentive to work, eliminating the notorious poverty and income gaps that universal credit and working tax credit were supposed to get rid of.

Someone moving from benefits into low-paid work, or from part-time to full-status, whether salaried or self-employed, would see their take-home income rise rapidly, with no clawback of the basic income entitlement. For a nation that needs to expand its workforce and increase its skills base, it’s a system that would at least build some powerful incentives at the lower end of the income scale. Provided it was not set too generously, that is.

That, however, is one of the great practical and political problems of the basic income idea. There is more than enough resentment towards the poor as things stand. This has only been heightened recently by the current labour shortages and the numbers suffering from long-term sickness (such as from long Covid and post-pandemic mental health problems), and those who have opted for early retirement.

Instinctively, for many, “targeting” rather than universality seems the best way to spend the social security budget wisely. The perception is that a sum as large as £1,600 a month will merely increase the numbers languishing on benefit if there are no sanctions to force them to take suitable employment. The incentive argument is greatly outweighed by the popular belief in the debilitating effects of social security.

Longer term, though, basic income may have to be implemented, and by popular, democratic demand. We cannot yet know where the advances in artificial intelligence and other transformative technologies are taking us, but it is worth contemplating.

In a society, perhaps not so far distant, where a relatively few create enormous amounts of wealth and generate much of the nation’s GDP, this gifted (or lucky) minority, who will possess the scarce skills or own the capital assets of the future, will become fabulously wealthy, and the economy would be larger than ever before.

Yet the majority of the people, dispossessed of their livelihood by AI and robots, will earn little to nothing, perhaps subsisting as a servant class for the mega-rich. Such a world could be a placid, peaceful, harmonised leisure society, where tedious clerical and onerous manual tasks were the jobs of obedient machines.

But such a 21st century paradise would only be sustainable if the burgeoning national income is in some sense distributed fairly across classes and regions. It is the kind of society dreamt of by the likes of JM Keynes, HG Wells and Aldous Huxley before the last world war, when the technological wonders of that age seemed on the verge of liberating mankind from drudgery.

It didn’t happen, of course, but that doesn’t mean it never will. That will be the moment when basic income suddenly commends it to the previously sceptical majority. For now, it is a valuable experiment and a glimpse into the future.