Coronavirus crisis: time for Basic Income in Scotland?

A couple of years ago I wrote about how the idea of a Citizens Basic Income (CBI) had become fashionable after decades on the fringes. As part of that new interest, in 2017, Green MSPs secured a funding commitment from the Scottish Government to carry out a feasibility exercise into how a CBI could be trialled in Scotland. As a councillor in one of the 4 councils (Edinburgh) involved in the feasibility exercise I have been on the sounding board for the work, along with my fellow Green councillor from Glasgow, Allan Young.

However, none of us could have anticipated the extraordinary turn of events in early 2020 which has thrust CBI from being a resurgent but still niche interest into the heart of a debate about we protect citizens in times of unique turbulence. A recent briefing from Reform Scotland made the case for a Basic Income of £5200 per adult, saying,

“As a response to the acute consequences of Coronavirus, a basic income would provide some financial certainty to the many people who have been thrown into a sudden and catastrophic loss of employment or reduced hours. It would be a bold, but welcome short-term move. However, we suggest it would also create the right long-term environment as we try to rebuild our lives and our economy.”

The publication of the Reform Scotland report drew the following response from the First Minister:

“I’ve long been interested in the concept of UBI but the current situation strengthens the case immeasurably.”

The normally austere Financial Times hosted an opinion piece headed “Universal Basic Income is an affordable and feasible response to coronavirus”. It has also been widely reported that Spain is planning to introduce a basic income as soon as possible. In fact, what is proposed appears not to be universal but even it being reported without the customary apoplexy is a sign of how much the ground has shifted.

This is both a challenge and an opportunity for Scotland. In one sense Scotland is uniquely well-prepared for this debate, with the current feasibility project having prepared an interim report last October and a final report due in June (although, as with all things just now, that might be delayed). Over the last two years a mass of evidence has been gathered by the project team, options weighed up and some of the real nitty-gritty explored. One of the things I like about the interim report is its academic sobriety, amongst a range of reports which can often appear evangelical.
But that is what makes for the challenge: what we have is a careful, studied approach designed to assess a trial which, if accepted, might happen in a year’s time and take 3-4 years to conduct: by 2024 or 2025, say. Meantime, out of the blue, the tectonic plates of policy have suddenly shifted to create a space for a scheme to be implemented.

Now.

In Full.

So, we in Scotland might be the best-informed country in the world right now, but the information might not be directed in quite the right way.

However, it is rare to be able to pick when and how opportunities arise. One major shift might lie with the UK Government. There is little that devolved Scotland can do without co-operation from the DWP and the Inland Revenue, since benefits and taxes are such a large part of the equation. It’s no secret that dialogue with UK departments in the course of the project have not exactly been encouraging. While the UK Government does not yet appear ready to fly the flag for CBI, it has had to implement many measures in only a few weeks which it would previously have condemned as implausible. A way forward at least looks possible now.

So what is the basic case? A Citizens Basic Income (or “Universal” if you prefer), is an unconditional, non-withdrawable income for every individual as a right of citizenship. It is a minimum payment, sufficient to meet basic needs; paid to everyone, based on rights of residency and irrespective of other sources of income. It would replace most benefits, tax allowances and credits, although in most models some other benefits remain, such as those related to housing or disability.

One of its main merits is simplicity. That is true both immediately and longer term. Very rapidly, in response to coronavirus, both UK and Scottish Governments have had to come up with range of new support arrangements on top of an already bewildering benefits system. Not only does this require a huge machinery to manage it, rife with errors and anomalies, it also often renders the citizen powerless, with dignity often shredded. If we are serious about responding rapidly to the current crisis we can do better.

The Scottish project, begun in 2017, is charged with looking at the feasibility of a CBI trial in Scotland. It involves 4 councils – Glasgow, Edinburgh, North Ayrshire and Fife. The interim report last autumn proposed that two levels of CBI be trialled. The amounts vary depending on age group but, for example, in the “high” model an adult aged, 35 would get £213.59 a week (based on the Joseph Rowntree Foundation Minimum Income Guarantee), while in the “low” model it would be £73.10 per week (based on current benefit levels. There would continue to be separate payments for disability, housing and childcare. It is really important to note that neither amount is a recommended payment in a full scheme – simply an attempt to test two different levels, with a rationale for each.

The interim report them goes on to discuss the number of people who would need to be involved in order to be able to draw meaningful conclusions about the impact. The numbers vary between 2,500 and 14,600.

That was then. This is now. There are some things a trial can and can’t do. A trial can potentially assess the effect of CBI at the level of individual behaviour. Does it enhance a feeling of security and dignity as supporters argue? Does it allow people to make different choices about work, training, caring or volunteering? Does it improve health as other studies have shown? Assessing its impact at a community level is a bit harder but is possible given sufficient numbers. What a trial can’t do is assess the big picture impact on, say, the way the economy works, although Fraser of Allander Institute has been asked to model possible scenarios for the economy.

So, over the last two years, the project has taken us closer to an actual CBI that the UK has ever been. But, in advance of the final report, it has left me, as an active participant, pondering what kind of trial would be right. As above, it does look possible that the current crisis may bring the UK Government to the table in a way that it has been reluctant to do so far.

But, in one of the early sessions, a participant argued that no-one thought to “trial” council housing in 1919 or the NHS in 1948. We just did them. Maybe now, for CBI, it should be “just get it done”.