Making benefit payments universal (or unconditional) is a concept that is gaining traction globally as many jurisdictions struggle with the ongoing negative economic effects of perpetual lockdowns.
To take this concept further, a Universal Basic Income being paid monthly to every citizen, set at an amount sufficient to secure basic needs as a permanent earnings floor that no one could fall beneath, is, in my view, something that needs to be considered locally.
This would replace many of the temporary benefits, which are given only in case of emergency, or to those who successfully pass the applied qualification tests for work and income.
Universal Basic Income would be a promise of equal opportunity, not equal outcome, with a starting level set above the poverty line. It offers far more freedom to choose jobs that suit the individual rather than the job that they are forced to take or run the risk of losing their benefits. It encourages more flexible and family-friendly working arrangements as people are not so reliant on earned income at certain times in their lives.
It also makes sure that there are no barriers to work, as are present in our current benefits system. The advantages to health and wellbeing are obvious.
The pandemic has brought all these issues into sharp focus and this simple concept is not so outlandish when you consider the costs to the public purse associated with administering a benefits system. Officer time, recovering overpayments of benefit and processing complex claims all become a thing of the past as a Universal Basic Income dispenses with all of this.
To ensure that monies are continually pumped into the economy, payments to recipients are timebound, in much the same way as our Spend Local cards had an expiry date, so any sums not used up by the end of each month are reset to zero.
Citizens not needing the monthly sum can set up a philanthropic monthly direct debit to support their favourite charities or other institutions.
Two questions immediately spring to mind for most people. Will everyone having a guaranteed basic income make us, as a society, lazy? Studies suggest not. And what is the cost of such a scheme? Most economists understand that Universal Basic Income represents a net transfer, and the true cost is much lower than the headline rate.
I believe that the time is right to explore this area in more detail and that it would be prudent, at the very least, to commission a study, run a pilot scheme and monitor the results.
I note that Guernsey are currently undertaking a study into a Minimum Income Standard. Watch this space.
For more comment and opinion pieces, see today’s Jersey Evening Post.
