Universal Basic Income and the State Pension post-Covid?

[adrock1976]

With there being a likely reduction in paid employment when the lockdown is over, and combined with the advancement with technology, would it be a good time for governments across the globe to have a serious discussion regarding a Universal or Citizens Basic Income?

Or to at least participate with an experiment somewhere in the UK being as there are suggestions for Glasgow to try it out as an experiment? (See https://www.glasgowtimes.co.uk/news...nd-running-basic-income-pilot-scheme-glasgow/)

12th June
Study recommends running basic income pilot scheme in Glasgow
By Drew Sandelands Local Democracy Reporter


A STUDY into whether every citizen in Scotland should receive a basic income has recommended running a pilot scheme – but it would need support from the UK Government.
Glasgow City Council is one of four local authorities, alongside Edinburgh, Fife and North Ayrshire, which has worked with NHS Health Scotland and the Improvement Service over the past two years to explore the possibility of a citizens’ basic income (CBI).
The steering group believes a three-year pilot would help to understand the impact a CBI could have on poverty, unemployment and financial well-being.
SNP, Labour and Green Party councillors on Glasgow City Council are in favour of exploring the idea.
But the Tory group says it would “radically increase the tax burden faced by every working household in Britain”.



City Treasurer Ricky Bell said: “We are keen to test its ability to address inequality and mitigate against poverty and deprivation.
“It is imperative that we consider new policy options, better designed than the current system and more equipped to improve living standards and quality of life.

“The Covid-19 pandemic puts even more focus on the need for change and fuels the desire to find different and more effective responses to the many challenges we now face.”
The recommended method would see two study areas where the whole community receives an income, one receiving a high payment, based on the Minimum Income
Standard set by the Joseph Rowntree Foundation, and the other a low payment “more closely aligned with current benefit levels”.
The draft final report will be debated by the four councils before being passed to the Scottish Government at the end of the month.
Glasgow Labour leader Frank McAveety said: “Given the extraordinary and unprecedented circumstances we now find ourselves in, ideas such as a universal basic income have found new purchase and renewed vigour.
“It is clear that our social security system in the UK is not sufficient to provide the dignity and security that we want to see for all citizens.

Frank McAveety
“Universal basic income is an idea that, if it works, has the potential to deliver and it is an idea we should explore fully.”
And Glasgow Greens councillor Allan Young said: “Glasgow has some of the worst outcomes in the UK, and despite best efforts it has been clear that successive governments have failed to shift that.
“That’s why it is the perfect place to lead the world in pioneering new ways of supporting citizens.”

However, the proposed pilot model “would require full collaboration” of the Department for Work and Pensions (DWP) and Her Majesty’s Revenue and Customs (HMRC).
Neither the Scottish Government or the local authorities could introduce a CBI on their own.

Glasgow Tories leader Thomas Kerr said: “We do not believe it is an appropriate use of taxpayer’s money to send payments direct to billionaires while their cleaners are penalised through the removal of the personal tax allowance.

“During this crisis we have seen the flexibility of the welfare system in supporting households throughout the United Kingdom as well as innovations like the furlough scheme which has directly underpinned wages and helped secure millions of jobs.”
First Minister Nicola Sturgeon recently said her position on basic income had “gone from having a keen interest in exploring it to what I now describe as active support for it”.
Costs for a pilot based on the proposed model are approximately £186m. The Scottish Government provided £250,000 to support the feasibility work.

Leaving aside the comments of Thomas Kerr of the Conservatives in the linked article (being as they have had Lord Ashcroft making donations even though he was not resident in the UK, and the architect of Universal Credit by Iain Duncan Smith whose spouse owns his assets through various companies which very conveniently happens to be based in the Cayman Islands so as to pay £0 to HM Treasury), nobody to my knowledge in various reports I have seen have ever mentioned how it would affect the State Pension at all. Or is it assumed that like Universal Credit and the previous Jobseekers Allowance and the old Unemployment Benefit before it, that the individual who would be in receipt of Universal Basic Income would be awarded with National Insurance Credits so as to protect their eligibility for the State Pension?

Regarding the State Pension, I am aware there were some mentions by the Scottish Government within the last few years that they called for the age that you would become eligible for the State Pension to take into account the life expectancy rates in deprived areas. I recall that this was done around the time that the UK Government were making moves to bring forward by a number of years the increase in age from the present 67 to 68 for being eligible for the State Pension. For example, the World Heath Organisation report into life expectancy in the UK back in 2008/9 had the Calton area of Glasgow as having the lowest life expectancy in the UK where the average life expectancy is 56 years. For somebody who resides in the Calton who is in paid employment and paying National Insurance contributions towards their State Pension, owing to the very low life expectancy in the Calton, they would not live long enough to actually see a penny of their State Pension as they would have died before becoming eligible for it many years later.

What are your thoughts on the Universal Basic Income and State Pension post-Covid?

PS Mods: I am aware that there is (or was) a thread in the General Discussion section at some point in the last couple of years, but have posted in this section as I have referred to Covid. I am happy for this thread to be moved to General Discussion if necessary.

 

[Bletchleyite]

I quite like the idea, but if you want to make it large enough to live off (so it'd have to be at least the National Living Wage) it seems to be unfundable. However, it may be a workaround to tweak with the tax system so those who are working don't get most of it (but do get enough extra to be worth working) - e.g. remove all tax allowances.

All the cases of it I have seen so far haven't been UBI, because they have not been paid regardless of income - if you means test it, it's a benefit, not a UBI. The principle of a UBI is that it's universal, every adult (possibly child too, to an extent) receives it, regardless of if they earn £0 or £100K.

 

[NorthOxonian]

I quite like the idea, but if you want to make it large enough to live off (so it'd have to be at least the National Living Wage) it seems to be unfundable. However, it may be a workaround to tweak with the tax system so those who are working don't get most of it (but do get enough extra to be worth working) - e.g. remove all tax allowances.

All the cases of it I have seen so far haven't been UBI, because they have not been paid regardless of income - if you means test it, it's a benefit, not a UBI. The principle of a UBI is that it's universal, every adult (possibly child too, to an extent) receives it, regardless of if they earn £0 or £100K.

Which makes it ludicrous in my view. While I know there would be associated costs of administration, a Negative Income Tax would seem to be a much better way of ensuring those on lowest incomes get support, those who don't need the support aren't paid unnecessarily, but making sure there is no hard edge between the two. We already have something vaguely similar in the student finance system.

 

[37424]

I would be in favour of introducing partial state pension for 60+, which gives the opportunity for people in that age range to consider moving to part time work or retiring all together. It would also help those who get made redundant in their 50/60's who then find it difficult to find employment which seems to be quite a number of people in my experience. This would then ideally open more opportunities in the market for younger people. I would make it optional based on restricting number of hours and income received going forward. Of course against this is the fact that governments keep trying to push the retirement age upwards because of cost.

I think one day we will have to consider a universal income but I think its a fair way off, In the mean time there really needs to be far more opportunities for people to work part time if they want, at the moment the majority of part time work seems to revolve around low paid low skilled work.

 

[cuccir]

UBI's advantage if done 'properly', which as Bletchleyite notes means that it has to be universal and indeed basic , ie, sufficient to deliver the basics in life for one person (food, housing, electricity, sewerage, transport, maybe internet access), is in its simplicity, which means probably zero means testing and very little in the way of extra beneifts. Maybe a pension and child benefit, maybe a London (or high-cost living areas) allowance, and that's it.

In terms of cost: I dont think it's really knowable until it's done properly a nationwide scale. There are obvious huge costs incurred, but potential for other benefits in terms of svigns and revenues, the latter of which are hard to know. The hypothetical advantages are huge: if you allow a load of people to take part-time work or breaks from employment, you increase overall employment because suddenly it becomes both normal and viable to work 2-3 day weeks. This increases your productivity and perhaps allows more services to operate fully over 6 day weeks at least. Both of these increase income tax, paying for a lot of UBI, which itself is then used to either fund entrepeneurship or increased spending in the economy...

At least, that's the ideal vision of it. I'm only partially convinced, but it is also the only vaguely-imaginable idea I've heard which both genuinely has the capacity to deal with the harms of capitalism, and isn't some form of violent of risky revolution.