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Dr Craig Dalzell says the Tories’ argument relies on basic income replacing housing benefit

A CHIEF RESEARCHER at a Scottish think-tank has hit back at claims a Scottish Universal Basic Income could cost £12.3bn a year.

Following a war of words between Scottish Tory MSP and Shadow Security Secretary Adam Tompkins and Social Security Secretary Angela Constance, Dr Craig Dalzell, head of research at Common Weal, warned that criticisms about the cost a Basic Income in Scotland may be based on invalid calculations.

The Scottish Tories this week obtained documents via Freedom of Information, which were prepared for the Scottish Government by civil servants and warned that a Basic Income policy could cost £12.3bn a year.

Dr Dalzell – who wrote Common Weal’s policy paper on a possible social security system for an independent Scotland in August, which included provisions for a basic income – said: “The cost of a Basic Income scheme is dependent on the level of Basic Income paid out, on how much tax is adjusted and how many social security payments are displaced. Many schemes are therefore possible and open for discussion.

“The £12.3bn being talked about by the Conservatives appears to rely on UBI replacing housing benefit, which may not be an ideal solution.

“Common Weal’s own proposal for a Universal Basic Income would cost Scotland £7.8bn per year after benefits have been displaced and would be fully paid for via a comparatively modest rise in income taxes which would see more than 80 per cent of Scottish households better off than they are now.”

In his paper for Common Weal, ‘Social security for all of us – an independent Scotland as a modern welfare state’, Dr Dalzell detailed a “revenue neutral” UBI scheme in which three age-based tiers would be created: for children (£3,484.50 per year), working age adults (£3,801.20 per year) and pensioners (£8,091.20 per year).

Dr Dalzell wrote: “The gross cost of granting such a UBI to all Scottish residents would be approximately £24,547m per year but approximately £16,600m of this cost would be met by the displacement of relevant existing benefits leaving £7,780m to be found from additional sources.

“To meet this amount, a change to income tax and national insurance contributions which takes into account the automatic increase in income for everyone results in a society in which income is more equally redistributed compared to present but also one in which a majority of Scottish households are better off.”

A Basic Income is a sum of money that all citizens are entitled to receive, regardless of employment status. Supporters of the scheme believe it could tackle poverty, and offer a solution to the potential problem of mass unemployment as a result of increased automation in the workplace rendering workers redundant.

Tory MSP Tompkins told said earlier this week: “Nicola Sturgeon and her finance team were told in no uncertain terms that a scheme for CBI [Citizens’ Basic Income] would be utterly unaffordable and not remotely sustainable.

“The £12.3 billion being talked about by the Conservatives today appears to rely on UBI replacing housing benefit which may not be an ideal solution.” Common Weal Head of Research Dr Craig Dalzell

“Despite these stark warnings, she continued to create an impression that she was going to introduce it. This suggests she is pandering to the extreme left of the Yes movement.”

A spokesperson for Angela Constance responded to Tompkins’ remarks, saying: “The Tories are making inequalities in our society ever deeper – so their hysterical reaction to even considering a proposal such as a basic income is no surprise.

“Clearly a nationwide CBI would be a significant financial investment – and the document does not suggest that this could be £12.3bn as the Tories wrongly claim – but the whole point is that it could potentially lead to significant savings elsewhere in the social security system and in the wider public sector.”

READ MORE: Common Weal outlines a new social security system for an independent Scotland

Dalzell will be speaking at ‘A Social Security For Us All In Scotland’, a Common Weal-hosted event at Glasgow University on 23 October, alongside Minister for Social Security Jeane Freeman. Tickets are available here.

Note: CommonSpace is funded by the Common Weal think-tank, which is funded entirely by public donation. CommonSpace is editorially independent and staffed by a dedicated team. Our funders’ support comes with a guarantee of total independence for CommonSpace.

Picture courtesy of Paula Vengeance