What is Universal Basic Income?

Universal basic income (UBI) is also known as unconditional basic income. It is a form of social security which provides regular and uniform cash payment to people, without means testing or the requirement to work.

UBI has gained worldwide support in recent years, although its origins date back to the 19th Century. It has been endorsed by economists including Joseph Stiglitz and Thomas Piketty, and has supporters from across the political spectrum.

Opponents of UBI say it encourages idleness, and the system is unaffordable. This depends on the level of guaranteed income, whether it is received by citizens or all residents, and which benefits it replaces.

So how does UBI differ from the national living wage (NLW)?

National living wage

For adults over 25 years-old, the national living wage in the UK is currently £8.21 per hour. For those aged 16 to 24 years it can range from £4.35 to £7.70 per hour.

According to Linda Yueh, adjunct professor of economics at London Business School: "For an hour’s work you should be getting something which is decent, but that doesn’t necessarily guarantee that everyone would have a minimum level of income to live on.

Creating a minimum wage is trying to raise a basic level of income in conjunction with a welfare system and tax credits system. UBI and NLW are similar ideas but the basic income goes farther in that you’re trying to make sure everyone has a minimum level of earnings they can live on. I would say that national living wage is probably something slightly closer, something that Britain has been debating,” she says.