My first response to the notion of a universal basic income (UBI) was: “Well, really. That is never going to happen! I mean, it’s completely unaffordable. I mean, it would be political suicide for any progressive party suggesting it.” And then I may have started to froth at the mouth slightly and ask if it would be paid to refugees.

Yet this year will see a UBI paid to residents of Utrecht and 19 other Dutch municipalities. Everyone will get about £150 a week, whether working or not. The unemployed won’t find themselves penalised for finding work, and the hope is that the state will spend less money snooping on benefit claimants, moving on the homeless or locking up those driven to crime. Advocates of this radical idea are keen to quash any notion that recipients of free money will just use it to lie around all day getting stoned. This is why it is being piloted in Holland.

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The idea is so refreshingly contrary to the petty conditionality that is killing the welfare state that it began to fill me with optimism that there may be a few people lying in this political gutter still looking at the stars. Once upon a time, universality was the underpinning principle of welfare. Every mother got child benefit; every child got free school milk, until that was snatched away by … Oh, I can’t remember – I’m not one to bear grudges.

In Britain we’ve already experimented with a system in which one group of people receive a guaranteed income with no obligation to work for it. But what if this was extended beyond the royal family? Imagine now if everyone in the UK started out with a guaranteed minimal amount of money each week. All other benefits would be done away with, along with the stigma and entrapment that came with the old system of welfare (and the expense of policing and administering it).

The idea of the UBI is so contrary to everything that has been drummed into us about preventing the “something for nothing society”, it’s worth advocating it just to see the Daily Mail and Iain Duncan Smith implode with outrage. The predictable argument that will be rolled out is that it will turn the masses from “strivers into skivers”; it will lead to welfare dependency, a lack of initiative and lots of programmes on Channel 5 called Fat Ugly People Spending Your Money on Crisps and Big Tellies.

But in fact it is the current situation that prevents initiative and holds back entrepreneurs. Anyone who ever invented or created anything did so with a modicum of financial security behind them. That’s why so many of our statues are to upper-class white men; that’s why Virginia Woolf needed “a room of her own and £500 a year” (slashed to £27.85 after that spare room fell under the bedroom tax). For centuries we have tapped the potential of only a small proportion of the British people; the rest have been powerless to initiate or discover where their true talents lay. With the UBI, innovators would be given the room to experiment knowing they would still have something to fall back on; it would see more small businesses and less grovelling on Dragons’ Den.

Vitally, it would begin to redress the chronic imbalance in today’s labour market. There’s a reason why call centre workers sound so miserable when they claim to be sharing really exciting news about your phone tariff. Since the decline of the unions, workers have been increasingly powerless to refuse longer hours and less money, with only the food bank to fall back on if they walk away from an exploitative job. With a guaranteed state income to keep the wolf (or Wonga) from the door, employees would regain the bargaining power to demand civilised working conditions and reasonable rates of pay. In a flexible labour market with millions of short-term contracts, this might be a more effective lever than attempting to unionise Uber drivers (whose membership subs would only be undercut by a new union startup operating online).

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Meanwhile the rest of us could feel confident that beggars had no reason to approach us on public transport. We wouldn’t have to do that thing where we shake our heads and pretend we haven’t see them at the same time. Overnight, our labyrinthine system of benefits and tax credits would disappear along with an army of benefits snoopers and all the stigma of signing on, with its degrading culture of blame and humiliation for those at the bottom of the pile.

For all the apparent expense of the UBI, we would save the small fortune that the state currently spends mopping up the mess of social problems caused overwhelmingly by chronic poverty.

Of course, there are complex reasons for increasing homelessness, for bulging prisons, for growing mental health problems – but desperate financial pressure is a major factor in all of them. Every decade sees us spending increasing billions trying to tighten the lid of the boiling cauldron. It might be so much cheaper just to turn down the temperature a bit.