“REAL global leadership”. “A significant opportunity for Scotland”. Innovation. National pride. It’s easy to get caught up in the excitement about the potential of a citizens’ basic income, especially when hearing it discussed this week by Nicola Sturgeon and Jamie Cooke, the director of the think-tank RSA Scotland. It’s an idea that’s being discussed all over the country – including at meetings of many Yes groups and SNP branches – and far beyond these shores.
What initially sounds to most people like a pie-in-the-sky leftie fantasy is increasingly being discussed as a serious solution to both the unemployment created by automation and the increasing brutality of the UK Government’s “welfare” regime.
Little wonder, then, that many of those seeking Scottish independence should be pricking up their ears at the prospect of a system that is universal, simple to run would remove both the stigma associated with claiming means-tested benefits and the need for jobseekers to comply with ever-increasing DWP demands.
This approach doesn’t just involve tinkering around the edges … but ripping up the benefits system and starting again from scratch
Of course, Scotland currently lacks the powers to implement such a scheme because the great bulk of our benefits system is still controlled by Westminster. And this approach doesn’t just involve tinkering around the edges – by topping up a benefit here or raising an income tax rate there – but ripping up that system and starting again from scratch. It involves asking fundamental questions not just about employment and economics, but about the very meaning of life.
What price happiness? What counts as work? What’s a fair wage? What’s the value of security, or care, or art? The answers are unlikely to be provided by tiny-scale basic income pilot schemes in Scottish local authorities.
The House of Commons Work and Pensions Committee had a look at basic income during the last session of parliament, and published its report in April. To call it a brief report is an understatement. You could probably take a double-sided copy of it, fold it into a paper aeroplane and launch it from one set of Commons back benches to the other. Basic income, it warns, “risks being a distraction from workable welfare reform”. The committee do not mince their words: “We urge the incoming government not to expend any energy on it.”
So who were the committee members who so brutally dismissed the whole idea? The seven who agreed the report contents included four Tories, two Labour MPs, and one representative of the SNP. One wonders if Nicola Sturgeon consulted with Mhairi Black before announcing that her government would fund research into implementing the kind of scheme that, according to Black and her colleagues, “would require rises in taxation that have not been contemplated by any political party serious about winning a General Election”.
Sturgeon is able to talk about bold, progressive ideas for a future Scotland without having to deliver anything
Cynics will say that by handing responsibility for this research to local authorities, Sturgeon is able to talk about bold, progressive ideas for a future Scotland (an independent Scotland, given we’re looking at an entirely distinct welfare state) without having to deliver anything or provide any costings. It’s hard to imagine what worthwhile data will be produced from research into providing a local minimum income that cannot and will not be a replacement for benefits.
Of more interest will be the findings from projects in countries such as Finland, where at the start of this year 2000 citizens were selected to be paid a set, tax-free monthly income of €560 (£514) for a period of two years. This is not an income top-up – it’s an alternative to the unemployment benefit they were receiving when the project began. At the end of the trial period researchers will have some tentative answers to the question of whether a basic income discourages recipients from seeking paid employment and, just as importantly, what other activities they pursue instead. It’s a decent sample size, and there’s a vast control group, but the timescale of the project is too short to shed much light on whether those guaranteed an income would be more likely to study for a degree, or quit an unsatisfying job, or set up their own successful business.
The biggest fly in the basic income ointment: the level at which it is set must be enough to cover housing costs
All experiments have their limitations, and there will doubtless be other reasons why the findings of this one cannot be directly transferred to Scotland or the UK as a whole, but these knowledge gaps are unlikely to be filled by up to 32 different local authorities faffing about with workshops and feasibility studies while slashing their basic services. Councils have no power over unemployment benefits, which along with income are linked to housing benefit, and the latter accounts for nine times as much of the overall benefits bill than the former (£27 billion compared to £3bn in 2006). This is the biggest fly in the basic income ointment: the level at which it is set must be enough to cover housing costs. This was one of the main reasons why the whole idea was so roundly dismissed by Black and her colleagues.
The real problem here isn’t a resistance to the idea of citizens receiving an income while sitting idle – it’s the opposite. As long as renting out properties to low-income tenants guarantees a return, courtesy of the Local Housing Allowance, the costs of implementing a universal basic income scheme will be far too high. For now, only the wealthy will be allowed to keep getting something for nothing. The rest of us will have to keep begging, borrowing, or working.
A version of this article first appeared in The National.