Universal Basic Income trial: dozens to be paid £1,600 a month

New trial of Universal Basic Income to be held in England, so long as funding is secured. Could it make our economy fairer?

A think tank named Autonomy is looking to launch a two-year trial for a Universal Basic Income (UBI), which would see participants paid £1,600 a month.

The 30 people taking part in the scheme will be based in two locations ‒ Jarrow in the North East of England and East Finchley, in North London.

Anyone from these areas can put themselves forward to participate.

It would be the first pilot of its kind to take place in England, with Will Stronge, director of research at Autonomy, suggesting that it could “be transformative for welfare in this country”.

He argued that in the years ahead we are likely to see no shortage of economic shocks courtesy of climate change and automation, and so basic income is going to be “a crucial part of securing livelihoods in the future”.

Crucially, of course, the actual funding for the trial is yet to be secured.

Autonomy, which is working alongside Big Local and Northumbria University in putting together the trial, reckons that the scheme will cost £1.15 million for the UBI payments, with a further £500,000 needed for other aspects of the trial, like evaluation of the pilot and support teams.

The case for UBI

The idea of a UBI has been promoted a fair bit in recent years, as a means of tackling poverty and giving people more of a financial safety net.

As the name suggests, with UBI the income is universal ‒ everyone gets it, irrespective of their financial situation.

So with the Autonomy scheme, it’s entirely possible that among those 30 participants there would be some on higher than average incomes, and not just the most needy.

Advocates suggest that a UBI would protect workers from being exploited, while also allowing people to be more flexible with things like leave for family reasons or in order to study. 

It could reduce some state benefits too ‒ the lower bureaucracy involved would certainly mean it was more efficient than many areas of the welfare system.

What’s more, the fact that there is something of safety net in place means that people might be better able to take a few risks, such as starting their own business or pursuing a freelance career, and thereby boost the economy.

However, there are plenty of prospective issues with it too.

The greater level of cash in the economy could lead to greater inflation, for example, while it’s going to be seriously expensive.

There is a danger that rather than protecting employees, it simply means bosses can get away with paying less instead.

And then there is the overall question of fairness.

If the Government is going to introduce a basic income payment, should it really be devoting cash to boost the incomes of those who are already wealthy? 

Where has UBI been trialled?

UBI itself is not a new idea, as people have been suggesting it for hundreds of years.

However, recent years have seen it given a proper trial in a host of areas. 

The biggest is in Kenya, which is in the middle of a 12-year pilot scheme.

The programme is being run by GiveDirectly, a charity now headed by former MP Rory Stewart, with around 20,000 people across the country being paid the equivalent of around 60p a day.

It launched back in 2017, and so far GiveDirectly suggests it has had a positive impact in reducing hunger, sickness and depression, even allowing for the pandemic.

In 2021 a scheme was also launched in Germany, which will see participants receive a basic income of around €1,200 per month, every month for three years.

They will have to fill out a regular questionnaire, covering things like their well-being and work life, which will be compared with a control group not receiving the cash.

There has also been an interesting trial in Japan, where a billionaire called Yusaku Maezawa gave away one billion yen to 1,000 people.

The majority who have received the cash have reported an increase in happiness, while there has also been a spike in interest around starting businesses, getting married and studying abroad.

Other areas to trial some form of UBI include Alaska, Canada, India, Spain and the Netherlands.

Will UBI work?

Ultimately we don’t really know how effective UBI will be until it is trialled properly in the UK.

That’s why we have to hope that this particular trial secures the funding needed, and this trial goes ahead.

By looking into how the trial performs, as well as those held in other countries, we’ll be in a better position to understand whether it really can make a difference.