Universal Basic Income: Asking the right questions

‘We’re not sure if basic income is the answer, but we think it might be, so how about trying it out?’ That’s the question UBI Lab Sheffield is asking in the hopes of encouraging debate around the idea of a universal basic income – and the team has proposed three pilot schemes for Sheffield to test the waters, explains Jason Leman.

Coins scattered on a table
Coins scattered on a table
Jason Leman
Jason Lemon of UBI Lab Sheffield
UBI Lab's Jason Leman

The inertia towards a Universal Basic Income (UBI) is steadily declining. Already a part of the Green Party manifesto, both the Labour Party and SNP now support basic income trials. Proposals are being worked up for a Scottish Government-backed pilot. After two years of development, the research and campaign group UBI Lab Sheffield received the official backing of Sheffield City Council for proposals to pilot a Universal Basic Income in Sheffield. 

UBI Lab argues that the discussion around basic income should begin with a question: ‘We’re not sure if basic income is the answer, but we think it might be, so how about trying it out?’ Rather than advocate for a UBI, the group advocates for pilots, which means being open about the possible pros and cons of UBI. This has meant more productive conversations with politicians unsure about publicly backing a UBI.

The simplicity of a UBI appeals to many. However, putting our pilot proposal together uncovered a lot of the complex questions that lie beneath the simplicity. Would people who are disabled gain or lose out? How would it impact upon low-paid professions like caring? What kind of legal safeguards would we need to protect vulnerable individuals receiving it? Bringing in a UBI successfully means understanding under what conditions it works best, and why, and for whom. So we should pilot.

There are also practical questions about how a basic income would work and what impact it has on day-to-day lives. If changing benefits and taxation, a UBI would be a massive adjustment for millions of people. We’d want evidence from pilots integrated into the roll-out, in a way that didn’t happen for Universal Credit. 

Not everyone thinks pilots are a good idea – some argue they are too limited in what evidence they can provide. However, pilots have produced measurable effects and clear examples of benefits. A recent Finnish trial focused on people who were not in paid employment, with the Finnish Government looking to reduce rates of joblessness. After the trial, employment rates were no higher, but they were no lower either, while the health and wellbeing of claimants was markedly better; the research team behind the pilot continues to analyse the results.

Another argument against pilots is that they are trying to answer the wrong problem. The main issue here is not academic but political – the amount of evidence doesn’t matter if you haven’t won the political argument. Pilots themselves often end up being political footballs; for example, a change in administration led to the cancelling of the Ontario basic income pilot. However, the Ontario pilot also opened up discussions, with the positive impact it had on individuals added to the debate. Pilots are a useful part of the political discussion, not just a dry academic exercise. 

So, we should pilot a UBI. But what does that mean?

A basic income is a payment from government to individuals that isn’t conditional on their wealth or income. That payment could range from £50 a year to £10,000 a year – it could mean a transformative redistribution of wealth and income across society, or a modest transfer that might actually end up increasing inequality. A ‘Universal Basic Income’ as a basic concept has no moral foundation, which is why it gathers interest from across the political spectrum.

Putting UBI to the test

Through a series of public discussions, UBI Lab Sheffield has developed three principles for the design of a basic income: 

  1. Fair – it should oblige those with above-average wealth and income to share more so that basic human rights are protected; 

  2. Efficient – the system should not place undue burdens on those distributing or receiving it; and

  3. Democratic – it should be paid on an individual basis so people have more say over their lives. 

With these principles, UBI Lab Sheffield has three proposed pilots: the ‘Tweak’, the ‘Top-up’ and the ‘Transformation’. 

The ‘Tweak’ looks at removing conditionality and means testing from disability benefits. We know that conditionality is very harmful to physical and mental wellbeing. This kind of basic income would free people who are disabled from the threat of sanctions and support flexible working. Whilst there have been arguments for not including disability benefits within a basic income, these are countered by those who argue a basic income presents an opportunity to reform a hugely flawed system. 

The ‘Top-Up’ would be a weekly payment to everyone of £30. This level of payment is similar to that paid out as part of Alaska’s oil fund. The Alaska Dividend is very popular across the political spectrum, and has produced significant impacts on inequality and poverty. The support and impact this kind of payment generates is an interesting pointer towards the Green Party’s own proposed Carbon Tax and Dividend.

Finally, the ‘Transformation’ is a proposed full-replacement of the current benefits system, including a strongly redistributive element of taxation. Whilst the basic payment would be £6,000 per year, additional ‘premiums’ for people who are retired, disabled or with children would increase this to £10,000 per year on average. Analysis of such a scheme by the University of Bath shows it would have a huge impact on poverty. 

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Different rates of basic income are proposed based on age and disability
The proposed "transformation" from UBI Lab Sheffield argues for different rates depending on age and whether someone is disabled

 

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A graph showing how a UBI can help to redistribute wealth from high earners to low earners
A mix of taxation and basic income could work to distribute money from higher earners to low earners

Keeping track: The participant experience

For each of these pilots, our proposal is to involve 4,000 people. This is the number of people that would need to be involved so that we can understand the impact on things like employment, poverty, and wellbeing. Participants would be regularly surveyed with a questionnaire similar to Understanding Society, a renowned study launched in 2009 that follows the lives of UK households and individuals over time. For the ‘Top-up’ and ‘Transformation’ pilots, we’d want our 4,000 people to be together in a single community. This is because community trials have shown fascinating results.

One such community basic income trial is the Mincome study, carried out in rural Canada in the 1970s. The impacts were multiple, but perhaps most striking was the impact on health. Physical and mental health appeared to improve, with hospital visits down by 8.5 per cent and fewer reports of mental illness. However, the causes of this were unclear.

Alongside the questionnaire survey, UBI Lab Sheffield proposes an in-depth study of around fifty people, including detailed interviews, diaries, and other exploration of their day-to-day experience. This would extend what the Mincome study found to better understand any change we see at community level.

A priority for UBI Lab Sheffield is to explore a broad range of outcomes. We would look at what people do, how they are in themselves and with others, and how they interact or transform the environment around them. 

A transformative policy

If we want to see a transformative basic income, as in our third pilot, then we also need a transformative argument for this policy. Our proposal to replace all major benefits would be funded via a ‘Basic Income Tax’ of twenty percentage points on top of Income Tax, alongside measures targeted at rentier wealth. This would mean that everyone on an above-average wage (around £25,000 per year) would be net contributors to the scheme.

Currently, the Green Party has a tentative approach to tax policy – understandable given the howls of indignation at any rise in taxation. However, the injustice of national, global, and generational inequality is becoming ever more pressing. UBI Lab Sheffield is encouraging other cities and towns to set up their own UBI Labs. Hopefully, more and more debate on our current system will be prompted through asking the increasingly urgent question: ‘We’re not sure if basic income is the answer, but we think it might be, so how about trying it out?’

Jason Leman is a Green Party member and member of UBI Lab Sheffield.

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