Paying everyone a basic income won't make them lazy – fat cat salaries prove there's no link between work and pay

We don’t think a handsomely paid chief executive might be demotivated by their large income, but suggest £70 a week for every citizen would mean we’d take to our couches en masse

Anthony Painter
Tuesday 07 June 2016 13:43
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A system of the basic income for all is to be trialed in the Dutch city of Utrecht
A system of the basic income for all is to be trialed in the Dutch city of Utrecht

If your good idea for social and economic reform is entirely ignored by political leaders, then perhaps it’s time to move on. If, however, your idea generates intense noise with claims of “utopianism”, “naivety” and “too good to be true” thrown at it, then you’re getting somewhere.

The case for the basic income has been met with the latter by the majority of its opponents. Few recent policy ideas have generated as much enthusiastic discussion as the basic income. The Swiss are the only ones to vote on it thus far – but they won’t be the last, and the conversation about a minimum income for all is spreading.

Of course, when big ideas – and, make no mistake, a radical overhaul of the tax and social support system is a big idea – become highly charged then more heat than light can be generated. It is precisely for this reason that advocates of the basic income have been arguing for local pilots, so we can better understand the impact of different versions of the system on different communities.

Switzerland: World's biggest poster unfurled in Geneva supporting basic income

Sensibly, this is the route that is being taken in the Netherlands, Finland, Canada and, in probability, will be taken in Switzerland too, despite its recent referendum result.

What existing models of the policy show is that a basic income system would cost a little more than our existing welfare system, but not unimaginably more when seen in the context of the total cost of tax and benefits changes made by this Government and its recent predecessors, to pensions, tax credits and the personal allowance.

George Osborne has already shifted more than the additional cost of basic income on reductions to corporation tax and increases to the personal allowance. The benefits of the system would be felt most by low and lower middle income families and it would also get the state out of arbitrarily intruding in people’s lives.

One particular criticism of the basic income makes little sense, yet is repeated ad nauseam. That is the claim that it would lead to mass idleness.

The irony is that one of the major motivations behind the basic income is to confront the enormous disincentives of the current system to work. In the case of Finland, the trial of the policy is explicitly driven by the desire to improve incentives to earn.

Where we do have evidence – from past pilots in both the developing and developed world – there is little to suggest significant work disincentives.

Where any disincentives have been found, it is among very particular groups who are making specific life choices, such as young men staying in education for longer or new mothers spending a longer period of time at home with their child. The benefits to education, health, wellbeing and general economic security of these choices, however, are significant.

Deeper and unacknowledged bias underpins the claims that a basic income would lead to the proliferation of a “workshy” underclass. It is one of the reasons that, in 2014, the UK sanctioned 18 per cent of all job seekers, but only jailed 220 tax evaders. We have set up a vast welfare bureaucracy designed to punish claimants while starving tax enforcement teams of resources.

Swiss voters 'reject basic income grant for all'

Human anxieties about free-riding are deeply embedded in our psyche, but they play out most harshly when it comes to the weakest and the poorest. We don’t think for a minute that a handsomely paid chief executive might be demotivated by their large income, but suggest £70 a week for every citizen would mean we’d take to our couches en masse.

The basic income would not break the link between pay and work – if, looking at those CEO salaries, one ever existed in the first place. But it would enable people to have greater control over their own lives, allowing breaks from the formal workplace for short periods of time to study, retrain, care for family members or try out new business ideas.

The system would be designed to give those earning below median wages, in particular, more security, freedom and, consequently, more of a fighting chance. We wouldn’t create a utopian post-work world – it would be a world where people had more control over their working lives and personal lives, which in itself inspires the desire to work.

We’ve got ourselves in a pickle. The welfare system isn’t working socially or politically, as even many on the right are willing to concede. Yet, oft-touted responses such as ‘contributory welfare’ do little to address fundamental issues of poverty and security, despite superficial political appeal. And they cost.

Basic income may be a much tougher sell politically, but it can push back against the insecurities of work that have become so prevalent for a large swathe of the population. It won’t solve the problem of poverty, but it will help mitigate it by providing a people with a secure foundation.

If we just brush aside new ideas such as the basic income with fictional labels and false assumptions, then we are conceding defeat and accepting an intolerable status quo.

Ultimately, we need a system of tax and support that gives people a better shot at building good lives. Basic income would do that. It’s not the whole answer, but it is an important start in addressing the insecurity we face.

Anthony Painter is director of the RSA Action and Research Centre

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