If housing’s your problem, Universal Basic Income isn’t the answer A lot of young people support a universal basic income. At the same time, many – especially those who live […]

A lot of young people support a universal basic income. At the same time, many – especially those who live in London – see housing as the main obstacle to their own pursuit of happiness. For a moment, the two positions appear to sit well together. With everyone in the country provided with a “basic” sum of money by the Government, each of us would be better able to afford rents, or save up for a mortgage deposit.

If the level was set at about £10,000 annually – close to what was proposed in the recent (soundly rejected) Swiss referendum – that would cover the average yearly rent outside the capital, and a good deal of it within London. Hey presto, we would all be baby boomers, or close to it, able to think about housing without the attendant nervous-system gymnastics.

Certainly, many advocates have thought much harder about this. They argue that a universal basic income (UBI) would simplify the benefits system, protect against a wave of unemployment that may follow the rise of smarter robots, and free humans to choose the kind of work they do rather than live a life of drudgery. Nobody would object to those goals; still, no one has made a convincing case that the UBI would achieve them.

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The more grounded projections of a UBI tend to retain some administrative kinks (and even cutting the entirety of the Department for Work and Pensions’ budget for administration would save only £6bn a year, or £100 per citizen); it is still far from clear that automation will bring on mass unemployment (economies have survived seismic changes in the nature of work before); and, examined in a cold light, removing the financial incentive for some people to work as cleaners or binmen would not simultaneously take the rubbish from your front door.

What is more, perhaps the most practical indication thus far of what the UBI would look like in the UK sets the annual level at £3,692. This projection by the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA) would allow young, healthy people to raise a deposit faster.

But it is not a tremendous sum, and without a boost in housing supply the extra cash might serve only to raise prices. Meanwhile, disabled people and those who most rely most on the welfare state would lose out (someone on the higher level of PIP disability support receives around £7,000 per year directly, and that’s without taking into account the housing allowance, carer’s allowance and support to work, which push the total package up a great deal). The more exceptions to universality you grant to avoid making “losers” of, say, the chronically ill, the more the new system looks like the old, messy one.

Problem of rent

On housing, the principle of a universal, non-means-tested benefit comes under most strain. In fact, the complexities are such that the Citizens Income Trust leaves housing benefit out of its calculations. It’s the old “problem of rent”.

A flat in Bethnal Green costs much more than one in Bognor Regis: set the basic income at a rate sufficient for Bethnal Green and those in Bognor Regis have a lot of additional money to play with. Set it at the Bognor Regis rate, and anyone living in Bethnal Green will have to get the movers in.

If you are a single parent, the problems multiply. Universality provides couples with twice as much money – so the children who lack a mother or father are penalised financially, too.

All of these issues might be worked out. But the lure of simplicity is a false one.

Housing is a great driver of inequality. And yet the most radical welfare reform in a century would do little to resolve it. If you like your solutions bitesized, a better one would be to massively subsidise social housing. Labour plans to investigate UBI. Its energies would be better spent pursuing reforms that would make the current, dull system better.