Universal Basic Income is set to be trialled as a pilot scheme by Fife Council in an as yet undisclosed location within the Kingdom. Details of the pilot scheme are very limited and it is likely to take several months just to agree the prerequisites for selecting the pilot area and collecting the datasets by which the outcomes of the project will be monitored and gauged.
What is known is that the trial will be conducted in a specific geographical area, which should have a population of somewhere between 2500 – 5000 residents. The proponents of the scheme are hoping that the pilot will run for a minimum of two years.
What is unconditional Universal Basic Income?
Universal Basic Income (not to be confused with the mean-spirited Universal Credit being rolled out by Conservatives at Westminster) is an emerging financial concept, support for which is growing across the world. It is a way of completely transforming the current welfare system which would reduce, if not eventually eradicate, poverty on a global scale.
Although it is envisioned as a tool to help eradicate/reduce poverty, the proposals for UBI are gaining wider support and traction due to the ever increasing pace of technological innovation and development. Rapidly evolving technologies are reducing the requirement for a human workforce, as more and more human tasks become automated.
In the US, digital technologies have boosted productivity, but they haven’t created job growth. Essentially productivity and employment are being decoupled, resulting in a growth of gross domestic product (GDP) without a rise in median income. The net effect is growing inequality. It is estimated that by 2021, 6% of all US jobs will be eliminated by robots.
In the UK, the Bank of England Governor, Mark Carney warned in December 2016 that robots could put “15 million Britons out of work” as the technological revolution advances.
The very real trend of technology replacing jobs through improved Artificial Intelligence and Automation has led to several websites allowing you to check whether or not your job is likely to be automated in the future by machines. Two examples are the NPR website and a dedicated section on the BBC website.
As automation by machines and robots grows, the cost of implementation shrinks which creates risks for the developing and developed world. Currently China has 77% of jobs at risk from automation and the global average is 57% of jobs at risk. Automation is not limited to industry types and goes beyond manufacturing. 99% of Insurance Underwriter jobs are currently at risk, 79% of truck driving job and 88% of construction/labouring jobs as well as many more in other sectors.
With the growth in automated technologies and improvements in A.I. developing the ability for technology to handle ever more complex tasks, UBI is being presented as a possible solution for tackling the expected high levels of unemployment and corresponding growth in poverty.
At its simplest, Universal Basic Income is a calculated financial minimum that an individual needs to survive in the current economy. The calculated minimum is then distributed to every single citizen unconditionally. Everyone would receive a payment, rich or poor, and recipients would not have to account for or justify their access to this entitlement. Data suggests that UBI will not only help reduce poverty and tackle the pending impacts from automation, but will also create growth in education, creativity, entrepreneurship and research.
The amount awarded will vary depending on the local economy. For instance, trials in Europe gave a test group of 2000 citizens £480 per month in Finland while in Utrecht 250 citizens received £823 per month.
The main arguments against the introduction of UBI are that an unconditional benefit for every citizen would be difficult to fund by government and a global benefit could result in inflation. An unsubstantiated argument against UBI is that individuals will not feel compelled to be productive through work, although early trials have shown that this argument is not backed by the limited data collected.
What is clear from the UBI event held at Kelty Community Centre in January is that many proponents are looking to move away from the current brutal capitalist/welfare system towards a society based on more caring values that still works in tangent with capitalism.
Professor Karl Weiderquest who attended the event referred to the current financial marketplace as “forced capitalism participation“. His vision for UBI was to replace the current system with a “voluntary capitalism participation” society, ie. one which does not force labour from individuals.
Professor Weiderquest said:
“People should not be forced into jobs by deprivation. Jobs and work should be voluntary. As it stands, businesses don’t have any incentive to pay low-skilled workers that work long hours. And there’s nothing wrong with that, it’s common sense. UBI, however, would incentivise businesses to pay better wages because nobody would need to work, they’d have to want to work. All a Universal Basic Income is, is voluntary participation capitalism. It is not something for nothing. You are being paid for using fewer resources than the capital owners. Capitalism with compensation. That’s all it is!”
At the most basic, an Unconditional Basic Income seeks to create a fairer financial democracy. Under the current capitalist system we have a limited democracy in which only those who enjoy financial security and affluence are able to make demands on markets.
Scott Santens, an advocate for Basic Income, explains the improved financial democracy:
“Right now only those with the means to pay for bread have a voice for bread. We love to use the term, “voting with our dollars”. So is the outcome of that daily election accurate? Does everyone have a voice for bread? No, they don’t. There are people with no voice, because they have no dollars. The only way to make sure the market is working as efficiently and effectively as possible to determine what should be getting made, how much to make of it, and where to distribute it, is to make sure everyone has at the very minimum, the means to vote for bread. If they have that money and don’t buy bread, there’s no need to make and distribute that bread. If the bread is bought, that shows people actually want that bread. So how do we accomplish this improvement of capitalistic markets?
By guaranteeing everyone has at the very least, the minimum amount of voice with which to speak in the marketplace for basic goods and services, we can make sure that the basics needs of life — those specific and universally important to all goods and services like food and shelter — are being created and distributed more efficiently. It makes no sense to make sure 100% of the population gets exactly the same amount of bread. Some may want more than others, and some may want less. It also doesn’t make sense to only make bread for 70% of the population, thinking that is the true demand for bread, when actually 80% of the population wants it, but 10% have zero means to voice their demand in the market. Bread makers would happily sell more bread and bread eaters would happily buy more bread. It’s a win-win to more accurately determine just the right amount.
And that’s basic income. It’s a win-win for the market and those who comprise the market. It’s a way to improve on capitalism and even democracy, by making sure everyone has the minimum amount of voice.”
The economic arguments for and against UBI will be fought quite fiercely by its advocates and detractors. Nevertheless, it is important to note that although UBI can be viewed as a Leftist ideal, it does have support from parties that are considered more Right leaning.
Within Fife, the leader of the Fife Conservatives Cllr Dave Dempsey has signalled his support for the UBI trial and has joined forces with the Fairer Fife Commission, the council’s poverty advisory group which recommended the trial.
At Westminster, the Conservatives have ruled out adopting UBI, claiming that it is “unaffordable” and preferring their own limited version of Universal Credit. Universal Credit is intended to replace six benefits with a simplified single payment that is made available through a monthly payment to qualifying citizens.
Roll out of Universal Credits has had many negative impacts; in East Lothian alone the local foodbank has seen a sharp increase in referrals due to “benefit-related issues and benefit delays“. It has been reported that hard-pressed tenants are being forced to “eat or heat”.
SNP MP for Glasgow Central, Alison Thewliss has blamed the Department for Works and Pension for creating homelessness over it’s “incompetent” processing of Universal Credit claims. Claimants who have been placed on Universal Credit in error have so far cost Glasgow Council £144,000.
Fife Pilot Scheme
Currently in Fife there is cross-party support for the UBI pilot, although no information has been made available to the public as to where the project will be trialled.
Lochgelly, despite having a slightly larger population than current stipulations, could be an ideal location to trial the scheme. Since UBI is a non-discriminatory payment for everyone regardless of financial background, Lochgelly has the advantage of offering mixed levels of high and low deprivation and affluence.
According to the Scottish Index of Multiple Deprivation data for 2016, areas within Lochgelly are still in the top 10% of most deprived areas in Scotland. By contrast, the development at New Farm Vales and the expanding developments at the north of the town have seen these areas listed in the top 30% of least deprived areas in Scotland.
Trialling the pilot in Lochgelly would allow the collection of valuably contrasting data with regards to financial impacts, spending habits and lifestyle choices on low-income households and more affluent households. Since UBI is a non-discriminatory payment for rich and poor alike, Lochgelly would provide the ideal microcosm for a pilot project.
Of course this would be unfair to neighbouring communities, especially to Benarty and Cardenden, which will be in the same political ward as Lochgelly at the May council elections.
The Benarty area has seen the area decline with the majority of the area within the top 10% of multiple deprived areas in Scotland. With areas split for the SIMD data, Ballingry is between the top 10-30% of most deprived areas in Scotland. Lochore and Crosshill do not fair any better, being in the top 10-20% of most deprived areas in Scotland.
In the Cardenden area, Auchterderran is in the top 30% of most deprived communities, Dundonald is in the top 30-40% of most deprived communities, and Cardenden is in the top 20-40% of most deprived communities in Scotland.
In addition to this, a map produced in 2012 by the Child Poverty Action Group showed that in the current Lochs Ward it was estimated that 30% of children (914) are living in poverty, while in the current Lochgelly and Cardenden Ward 29% of children are living in poverty (788).
Lochgelly east is the 3rd highest fuel poor area with 38.60% estimated in fuel poverty. Ballingry is the 46th most fuel poor in Fife with an estimate of 33.17%. Lochgelly West and Lumphinnans (datazone: S01002777) 48th highest fuel poor area with an estimate of 29.47%, and Lochgelly West and Lumphinnans (datazone: S01002762) 50th highest fuel poor area with an estimate of 35.08%.
There is a case to be made that a trial should be conducted in the most deprived communities of Fife, which would centre a pilot scheme in the one of the political wards of either Ward 7 (Cowdenbeath), Ward 22 (Buckhaven, Methil and Wemyss Villages), or Ward 8 (Lochgelly, Cardenden & Benarty).
Introducing the pilot scheme across the entire political ward of Lochgelly, Cardenden and Benarty would instantly alleviate child poverty and fuel poverty, and there would no longer be any need for residents within our communities to go to the foodbank at Benarty!
By limiting the pilot to a small geographical area, only limited data will be produced, and although all data is valuable, it may not be enough to identify larger positive trends.
Focussing on only one geographical area in a political ward may create tensions between the lucky and unlucky communities. It would grow the inequalities between the areas and has the potential to weaken the collective will of the communities to work together.
With the continued onslaught of austerity measures attacking the poorest and most vulnerable in society, we need our communities to come together at the grass roots level, to find strength through mutual support and to create the unity to oppose austerity and the deep poverty it creates.
The ambitious and courageous course would be to test UBI across the whole of Fife. In the absence of that, it should focus on a single political ward to ensure harmony across the communities within the selected area. In for a penny in for a pound, test UBI in the most deprived communities of Fife! Test Unconditional Basic Income in Lochgelly, Cardenden and Benarty!