Another element in the SNP’s Programme for Government announced by the First minister is a commitment to fund pilot studies into implementing a basic income in Scotland. See this explanation from Motherboard:
‘A basic income for citizens is an old idea that’s gaining renewed traction as governments prepare for a future when robots are doing much of today’s menial work. The idea is to give everybody a living wage (or the equivalent of that in tax credits, or some other scheme) simply for being alive. Previous experiments have suggested it can work: A Canadian trial in the 1970s showed that supplying people with a basic income obliterated poverty and caused high school completion rates to shoot upwards. Finland launched a basic income trial in 2017, and Canada is gearing up to launch its own trial in Ontario. Hawaii is also looking into the idea.’
In the UK, the research group Compass has already carried out a very thorough study and make a very powerful case for the idea, in principle:
‘There are very strong arguments in favour of a UBI. Such a scheme would overcome many of the problems with the existing and increasingly complex, punitive and unpopular system of social security, which in multiple ways has become a weak tool for social protection but a strong tool for waste and the humiliation of those on the very lowest incomes. A UBI would provide a much more secure income base in an age of deepening economic and social insecurity and unpredictable work patterns. It would offer much greater financial independence and freedom of choice for individuals between work and leisure, education and caring while recognizing the huge value of unpaid and voluntary work.’
However, Compass recognises the complexity of implementing a scheme in the context of the UK’s current benefit and taxation system and conclude:
One lesson from these simulations and other studies is that, in the context of existing tax and benefit arrangements, it is not possible to design a scheme that is revenue neutral, pays a decent sum and withdraws most means-tested benefits without significant numbers of losers. This is because the current benefits system, partly because of its complexity and reliance on means testing, is able to pay large sums to some groups. While the current system is buckling under the pressure of its own complexity, a simpler, flat-rate UBI scheme cannot compensate for the withdrawal of both personal tax allowance and most means-tested benefits without becoming expensive. However, a modified scheme that paid a lower rate and retained existing means-tested benefits would be viable, though it would keep some of the complexities of the existing system. Modified scheme 2, as described above, would have very few losers among the poorest 40%. The scheme would be progressive, reduce inequality and lead to a significant cut in child poverty. In particular, there would be fewer households on means-tested benefits, and those still on them would receive less help in this way. It would have a net cost over and above the integrated changes in tax and NICs of some £8bn a year.
So, the Compass research makes a strong case for the idea in principle but also makes it clear that implementation would require one or more transitional periods to prevent, for example, traumatic consequences for some families with, typically, large numbers of children. This argues for experimental or pilot studies to find ways of dealing with the complexities in transferring from the current system to transitional basic income schemes so the Scottish Government’s commitment to fund pilot studies is sensible and, once more, evidence of competence in government so obviously lacking in London.