Scottish cities find basic income pilot would be ‘desirable but challenging’

A new report concludes that a Citizens’ Basic Income (CBI) pilot in Scotland is “desirable” but that there are significant legislative, technical and delivery obstacles to moving ahead.

Over the past two years, the cities of Edinburgh, Fife, North Ayrshire and Glasgow have worked together with NHS Health Scotland and the Improvement Service to explore the feasibility of a Scottish CBI pilot. The concept is based on offering every citizen an unconditional, regular payment, regardless of existing welfare benefits or earned income.

Led by the Citizens’ Basic Income Feasibility Study Steering Group, the partners have now developed a proposed model for a CBI pilot which would assess the impact on poverty, child poverty and unemployment, as well as health, financial wellbeing and experience of the social security system. The suggested pilot would run over three years, following a one-year preparation period. The study suggests trialling two levels of CBI payment – the higher amount (£213.59 per week) is based on the 2018 Minimum Income Standard (MIS) produced by the Joseph Rowntree Foundation and the lower payment (£73.10 per week) is closer to current benefits entitlements.

“Bold new ideas”

Councillor Cammy Day, Deputy Leader of the City of Edinburgh Council, said: “The coronavirus pandemic is resulting in more people than ever struggling to pay their bills and those already on low incomes are suffering the most. Bold new ideas are needed to help people keep their heads above water both now and in a changed future landscape. Citizens’ Basic Income is one such idea and, along with approaches like job guarantee schemes to provide real work and a real living wage, is a policy we should seriously consider as a solution to the challenges people are facing.”

Day told Cities Today that cities have an important role to play in driving initiatives like CBI: “We know that the majority of people living in poverty in Scotland live in its cities, and that there is no solution to poverty that does not respond to the specific challenges people face in trying to get by on a low income in Scotland’s largest cities,” he commented. “Edinburgh is Scotland’s strongest economy, but it is still home to far too many people who struggle with poverty every day. Just as Scotland needs Edinburgh to be at the forefront of driving prosperity and growth for the whole country, it is also vital that the city is at the forefront of new ideas and new approaches to end poverty.”

The report calls for support from both the Scottish and UK governments to take the research findings further, noting that there are substantial challenges to introducing a CBI pilot but that “they are not insurmountable when weighed against the significant potential benefits for those most in need”.

The four councils involved will now debate the findings before passing a final report to the Scottish Government at the end of the month.

Arguments for CBI include that it promotes social justice and equity, encourages entrepreneurialism and could help mitigate job losses due to automation. However, others argue that it would lead to state dependency, reduce incentives to work and is unaffordable for governments.

Universal basic income has been debated previously around the world but the idea of it becoming a reality on a wide scale has seemed fairly remote. However, interest has been significantly heightened by the coronavirus pandemic, which is expected to cause a deep global recession.

Basic income has not yet been implemented in any country but there have been several pilots, including in Finland, Canada and the Netherlands. Finland recently published results from its trial, finding that the employment rate for those receiving basic income improved slightly compared to the control group and recipients reported being more satisfied with their lives and less stressed than the control group. They also had a more positive perception of their economic welfare.

Economic shift

The pandemic has already sparked unprecedented economic measures, including the UK government’s furlough scheme, which is covering the salaries of up to a quarter of the UK workforce.

The US$2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) package, announced in March, is the largest economic stimulus in US history. It  included direct payments to taxpayers as well as help for businesses. The federal government is reported to be considering a second stimulus payment for citizens.

Scotland’s First Minister, Nicola Sturgeon, recently said: “The experience of the virus and the economic consequences of that have actually made me much, much more strongly of the view that [universal basic income] is an idea that’s time has come.” The UK government retains many welfare and taxation powers over Scotland but Sturgeon says she plans to push for constructive discussion on CBI.