How to make a Universal Basic Income a reality

In the UK, growing interest is being driven by two deep-seated structural trends: the growing fragility of the jobs market and the inadequacies of the existing, increasingly punitive, intrusive, and patchy benefits system. With its built-in income guarantee, a universal basic income (UBI) would help relieve both problems. It would bring a more robust safety net in today’s much more precarious working environment while boosting the universal element of income support and reducing dependency on means-testing. A UBI also offers a way of providing income protection as the robotic revolution gathers pace, and could be used to help ensure that the possible productivity gains from accelerated automation are evenly shared rather than being colonised by a small technological elite.

A UBI would, over time, change behaviour, and the results of the national pilots will provide important new evidence of the likely impact. Some might choose to work less, take longer breaks between jobs or be incentivised to start businesses. Some might reject low paid, insecure work leading to a healthy rebalancing of wage structures. Some might retrain or devote more time to personal care or community support, in many cases producing more value, if currently unrecognised, than paid work.

The net effect is more likely to promote than weaken the incentive to work. Indeed, incentives will be stimulated by lowering dependency on means-testing while tackling poverty would become less dependent on the ‘work guarantee’. …

However, our study also found that a ‘modified’ scheme, one that still provided a universal and guaranteed income, albeit at a moderate level, and that initially left much of the existing system intact, would be feasible. Such a scheme –  while not a silver bullet – would offer real and substantial gains: a sharp increase in average income amongst the poorest; a cut in child poverty of 45 per cent; and a modest reduction in inequality, all at a relatively modest cost of £8 billion. This model would also strengthen the universal element of the current benefit system, thus reducing the reliance on means-testing.

This approach is not utopian – it is grounded in reality. It offers a piecemeal approach to reform, not wholescale replacement.  Such an approach reduces the risks of big bang reform, while offering flexibility for gradual improvements over time.  It could, for example, start with a UBI for children. This is evolution, not revolution.

How to make a Universal Basic Income a reality