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England’s first universal basic income trial prepares to launch. Could it be the future?

27/04/2024

Participants of a trial in England are set to receive an income every month without having to work. It’s the first time universal basic income (UBI) will be provided in England, and advocates argue it could be the future.

The idea of providing citizens with UBI has been slowly gaining traction in the last couple of decades. Read on to find out more about trials taking place around the world, and why supporters claim it could be essential for future generations.

What is “universal basic income”?

As the name suggests, UBI would provide every adult with a set income they can rely on. Unlike other forms of government monetary support, the income wouldn’t be conditional or means-tested – every citizen would receive the same amount.

The core idea is that it would provide a minimum income that people can use to cover basic needs, such as housing costs or grocery shopping. The income is provided in cash, rather than vouchers, so people could spend it how they like. Those that receive UBI could choose to work to boost their income.

Advocates for UBI argue it will be necessary in the future as the job market rapidly changes.

Technological advancements mean some industries could reduce their workforce while maintaining, or even increasing, productivity. As a result, the job market could become far more competitive for workers and unemployment may rise. UBI could provide income to those affected by these developments.

Supporters also suggest UBI could:

• Improve economic security
• Boost health and wellbeing
• Provide families with greater flexibility
• Make education more accessible
• Encourage entrepreneurs.

As people won’t need to seek employment to pay for essential outgoings, some advocates even suggest UBI could drive wages up.

Universal Basic Income faces some opposition

Of course, there are challenges to implementing UBI, and there are people that oppose the idea.

One of the biggest obstacles of UBI is the cost of delivering it. While UBI could eliminate the need for some benefit payments, such as the State Pension, providing every adult in the UK with a basic income would place a huge burden on the government.

As well as the cost of providing UBI, it could also lead to tax revenue declining if fewer people are working.

Critics also suggest a significant proportion of people would choose not to work which could affect businesses. From an individual perspective, it’s also claimed that deciding not to work could lead to a lack of purpose and harm wellbeing.

In contrast to the claim that UBI could increase wages, some critics suggest the opposite could happen. As wages would no longer need to cover essential costs, businesses may be able to pay employees less.

England’s UBI trial participants will receive £1,600 each month

Think tank Autonomy will carry out the UBI trial in England. Over two years, participants in Jarrow and Finchley will receive £1,600 each month.

The trial will assess the effect UBI has on their lives, including whether they choose to work. It will also study how an unconditional income affects mental and physical health.

It will be some time before Autonomy releases the results from the trial in England. Similar studies from around the world could indicate what the latest UBI research will find.

The largest and longest-running study of UBI so far is in Kenya. Since 2017, GiveDirectly has led a study that has distributed a basic income to 20,000 people in more than 190 rural villages. Some individuals involved in the study will receive UBI for 12 years.

While the Kenyan study is still ongoing, initial findings suggest UBI has stimulated local economies. The research found it’s not only recipients that have benefited from UBI but the wider communities.

UBI trials in Finland and Germany have also published findings:

• In Finland, a UBI trial provided an additional income of €560 (£486) each month to unemployed citizens. The results found participants felt less stressed. Perhaps more surprisingly, the results also suggest UBI increased trust towards other people and social institutions, like the police and courts.
• A 2014 German study found that 80% of people receiving UBI felt less anxious. Half also said it enabled them to continue their education, and 35% said they felt more motivated to work.

Could you receive UBI in the future?

With so many trials taking place assessing the effects of UBI, it’s something that governments and other organisations may start to look more closely at. While UBI could be commonplace or even necessary in the future, it’s yet to be implemented on a large scale.

The results from the England trial could provide some interesting insights into how income, work, and families may change in the coming decades.