COMMONS

Citizen's income introduction examined

26 October 2016

The Work and Pensions Committee holds a one-off oral evidence session on citizen’s income (also known as universal basic income) at the University of Birmingham on 12 January 2017.

The session examines arguments for and against introducing a citizen’s income in Britain. We are looking for participants to speak on both sides of the debate.

Citizen's income

A citizen’s income (also known as a universal basic income) is a method of guaranteeing a minimum income for all. It is an unconditional, non-withdrawable payment from the state to all citizens, regardless of contribution or means. It could represent a radical alternative to the social security system.

Some form of universal basic income has been implemented in other countries and cities: for example, in the Netherlands there is a non-conditional, residence-based pension for everyone aged 65 and over; and the city of Utrecht and the Finnish Social Insurance Institution are both trialling a citizen’s income, set at a relatively high level.

It has been argued that a citizen’s income (depending on the level at which it is set) would:

  • Provide a much simpler alternative to the benefits system
  • Remove the "stigma" of social security receipt, thereby enhancing social cohesion
  • Negate the need for costly and complex means-testing
  • Remove work disincentives associated with the withdrawal of benefit payments in the current system (more simply and effectively than Universal Credit, some argue)
  • Reduce the costs of public services associated with financial hardship, for example. health and criminal justice
  • Promote creativity, risk-taking, and social mobility, as everyone would have a basic income to fall back on

Difficulty in implementation

However, there could be political and practical difficulties in implementing a citizen’s income in the UK, because it may:

  • (Further) undermine the fundamental principle of contribution in the social security system
  • Have substantial net costs and require substantially higher rates of direct taxation, even if set at subsistence level (some proponents of a citizen’s income dispute this)
  • Require a near-impossible trade-off between setting the income level sufficiently generously to cover costs such as housing, childcare and disability, which are subsidised or covered by the current benefits system, and maintaining some form of means-testing to protect the vulnerable, which would undermine the citizen’s income’s apparent simplicity
  • Undermine incentives to work, especially if the value of citizen’s income was generous in comparison to wages

Give evidence to the Committee

If you are interested in taking part in this session, please send a brief overview of your background and interest in the topic, including any relevant work, to [email protected] by Friday 2 December 2016.

Committee members comments

Frank Field MP, Chair of the Committee, said

"The idea of a citizen’s income has recently garnered interest in several different countries. In this session the Committee will hope to explore arguments for and against implementing such an initiative in our country’s welfare system."

Steve McCabe MP, Committee Member, said

"As we consider the implications of Universal Credit and the wider argument for reform of our welfare system, particularly given the changes in our society since its introduction, we should also look at ideas which are not new but may have achieved a new significance in terms of universality as the government tries to reduce means testing and the administrative costs of delivering welfare. The concept of a citizen’s income is an idea which merits further consideration in this context."

Further information

Image: iStockphoto

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