Scrap benefits and pay basic income to end poverty, charity says

The Scottish Government should scrap benefits and pay every adult a basic income to eliminate poverty, a report has said.

Paying an initial basic income of £2,400 a year, before eventually raising it to £4,800, would eradicate destitution in Scotland, the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA) claimed.

The charity has called for Holyrood to pilot a basic income scheme by scrapping sanction-led employment benefits and the personal allowance in favour of a regular, unconditional payment of £2,400 per adult, or £1,500 per child, per year.

Its report found “child destitution would vanish almost immediately'' if an initial basic income was introduced, and if it reached the full £4,800 it could “completely eliminate destitution in Scotland''.

Speaking at an RSA event this week, shadow chancellor John McDonnell said the UK Labour Party would explore the idea of paying a basic income, with the charity hoping to convince the Scottish Government to trial the idea in parts of Scotland.

Jamie Cooke, head of RSA Scotland, said: “Basic income is increasingly of global interest and Scotland is at the brink of doing something very different and bringing the first basic income pilots to the UK.

“Our research shows how an initial basic income could be introduced in Scotland in a way that is progressive, affordable and would halve destitution, while paving the way for a full basic income in the future.

“But the idea must be tested - and our engagement with Scottish citizens found support for experimenting against today's discredited Universal Credit system - which is why we suggest a robust stepping stone before a 'full' basic income is introduced.

“The idea has supporters from the SNP, Scottish Labour and the Greens, as well as others. We need to see a cross-party agreement to introduce pilots in Scotland.

“Obviously having the support of the UK Government of the day will be key, and John McDonnell's support this week makes this more likely.

“But failing this, the Scottish Government should pursue all options to delivering this - including invoking Exception 10 of the Scotland Act 2016 and developing a civil-society led UBI.''

Three scenarios were modelled in the RSA's report - the status quo; a £2,400 per adult basic income; and the full basic income of £4,800.

It found the full basic income would be the most fiscally progressive but cost the most at 3.5% of Scotland's GDP, while the partial basic income is proportionately easier to fund due to the removal of the tax allowance, costing 1.2% of GDP.

Anthony Painter, director of action and research at the RSA, added: “Under austerity, we have seen the state stepping back in terms of the cash support it offers people, while increasingly stepping in to police the behaviour of the people needing cash support.

“Basic income has been tested and shown to have a positive impact on wellbeing and trust without reducing participation in the labour market overall.

“Meanwhile Universal Credit - relying on sanctions to control individuals - has been shown to have damaging effects on health, wellbeing and trust, and creates greater economic insecurity.

“This means we must consider a basic income to promote economic security and freedom, as an alternative to today's unpopular, threadbare and hostile welfare state."