Would universal income scheme benefit jobless?

IMAGINE a country in which everybody gets a payment from the Government that is enough to make a real dent in the basic cost of living.

The idea of the Universal Basic Income has powerful fans and Shadow Chancellor John McDonnell made waves this week when he said a commitment to launching a trial programme will appear in the next Labour manifesto.

With a new industrial revolution underway there are deep fears that millions of jobs could vanish through the rise of robots and greater use of Artificial Intelligence.

Self-service check-outs and touch screens are now commonplace, but what happens if call centre jobs vanish and baristas are replaced with robotic machines that make you coffee on the spot?

A big concern is that the rise of driverless cars and trucks could strip millions of taxi drivers and hauliers of a livelihood.

If millions of jobs no longer exist, radical solutions to prevent an unemployment crisis may be needed. And a basic income is seen as a possible way of ensuring that time out of work – or doing less work – does not lead to poverty. It is not just John McDonnell and left-wing campaigners who are interested in the concept.

Facebook founder Mark Zuckerberg used a speech at Harvard last year to argue: “We should explore ideas like universal basic income to give everyone a cushion to try new thing.”

Tesla chief executive Elon Musk argues there will be “fewer and fewer jobs that a robot cannot do better,” adding: “I think we’ll end up doing universal basic income. It’s going to be necessary.”

Closer to home, Welsh Government Finance Secretary and Labour leadership contender Mark Drakeford last year said he found the idea “attractive in the way that it can simplify and support people who currently have to rely on a very complex set of part-time work, part-time benefits”.

The Wales-based Bevan Foundation last year asked “what difference would it make to someone who gets £317.82 in their bank account every month through Universal Credit, or £317.82 every month as a UBI?”

Kevin Morgan, Professor of Governance and Development, admits he is “very ambivalent about it” and is concerned there would be many “unintended consequences”.

Cardiff University economist Patrick Minford argues that Britain’s welfare system already has a wide range of measures to ensure people can make ends meet and that UBI would be hugely expensive.

A three-year project in Ontario, Canada, would have given randomly selected people £9,850 a year – with 50 cents deducted for every dollar they earned – but the new centre-right government has said it will scrap the initiative.

A trial in Finland has also been a damp squib. Since January last year 2,000 people have been paid £475 a month but the programme will be wrapped up.

A Guaranteed Annual Income experiment also ran in Manitoba, Canda, from 1974 to 1979 but no final report was published.

A 2011 study by the University of Manitoba found “a significant reduction in hospitalisation, especially for admissions related to mental health and to accidents and injuries” and a “greater proportion of high school students continued on to grade 12”.

In the UK, the Royal Society for the encouragement of Arts, Manufacturers and Commerce (RSA) has suggested every citizen under 55 should be able to claim £5,000 a year from a UK Basic Opportunity Fund (UBOF) for up to two years in a bid to “enhance economic security and promote economic mobility”.