TOO many people in Scotland are being failed by the UK government’s social-security and employment-support systems and we have seen rising poverty levels in recent years.

In addition—at least for some—finding employment is sadly no longer the protection against poverty it once was. In-work poverty is now at an all-time high and the majority of adults and children in relative poverty live in households where someone is in paid work.

That is why we are using new devolved powers in social security and employability to take decisive action to change things for the better. We want to deliver a system with dignity, fairness and respect at its centre.

It is important to debate and test innovative ideas. New ideas shouldn’t be dismissed out of hand

It is at times like this—when we have the opportunity to decide the best policies to serve the people of Scotland—that it is important to debate and test innovative ideas. New ideas shouldn’t be dismissed out of hand, but should be looked at closely to consider the risks and benefits, costs and savings, and in the case of any changes to the welfare system whether it will enhance people’s well-being. 

In many areas of public policy what was once radical or unimaginable is now normal—for example the smoking ban, where Scotland led the way in the UK, is now a widely accepted policy across all four nations.

One such radical approach to social security which has gained attention recently is the idea of providing a universal basic income (UBI). Now I am both interested in UBI and sceptical of some of the claims made around its impact—but because of that I believe it’s right to test those claims and to properly explore whether there could be a role for UBI in our social-security system.

The Scottish government remains open-minded about UBI and we are currently looking into the policy further to get a better understanding of how it would work and the effects it would have in Scotland.

UBI is a simple concept—a universal, non-taxable, non-means-tested payment made to all citizens from cradle to grave. It is paid regardless of past national-insurance contributions, income, wealth or marital status. However, its implementation is highly complex and has been piloted in only a small number of countries.

Hillary Clinton considered including UBI as a policy ahead of her presidential campaign. One of the most advanced pilots in recent years has been in Finland, which will conclude at the end of 2018. Their findings, likely to be reported early in 2020, will help to build the evidence base, as will other international pilots such as those launched in Ontario. 

These pilots vary in their approach, some providing the UBI just to unemployed people, others supporting a wider range of citizens to fully test the impact.

The Scottish government remains open-minded about UBI

One of the main complexities of UBI is determining the level at which it is set. It can range from a minimum payment to prevent destitution to a higher level which on its own gives individuals an adequate but basic standard of living.

It is usually assumed that UBI replaces all other social-security payments. This is reflected in one of the most profound concerns around UBI—the impact it could have on people in poverty and people facing additional costs in their day-to-day life.

There are also concerns about whether governments will be able to afford both UBI and a generous welfare state. As Dr Luke Martinelli noted quite succinctly in Bath University’s report for the Institute for Policy Research, “an affordable basic income would be inadequate, and an adequate basic income would be unaffordable.” 

A balance needs to be struck and it is an issue that Scotland would need to think very carefully about. We already provide many universal benefits in Scotland, such as free school meals, personal care, prescriptions, eye tests and university tuition.   

However, as a universal benefit, it removes the stigma of “being on benefits” and all the issues around assessment and conditionality which are so badly handled in the current system. And that can only be good for society.

Supporters suggest it provides a greater incentive for those out of work to take up employment as they do not risk losing any of their current benefits and are no longer constrained by seemingly arbitrary conditions. They say it could also encourage people to be more entrepreneurial as they would already have a basic income to support them.

It is also suggested that UBI is essential in the future labour market which is increasingly affected by the automation of services. This has been a driver for some of the pilots funded by large Silicon Valley companies who see job losses and consequent loss of income as a loss of consumers.

Most models of UBI suggest that anything over the UBI value is taxed at a single rate. This does not align with our progressive approach to income tax in Scotland where those who can afford to pay more will make a higher contribution to support better public services. The combined impact of tax and benefits should of course be an important part of any feasibility work.

As a universal benefit, UBI removes the stigma of “being on benefits”

These unanswered questions about UBI are why the Scottish Government is supporting further scoping of the idea in Scotland. Four local authorities—Fife, North Ayrshire, City of Glasgow and City of Edinburgh—have expressed a desire to pilot basic income. 

To assist this process, the Scottish Government has made £250,000 available over two years to help them develop their planning and models. These pilots will help inform our thinking around the future of UBI in Scotland and I look forward to seeing the results.

As with many significant policy proposals, there would be winners and losers and much greater clarity on who they would be must inform our future thinking about this concept. If evidence emerges that leads us to believe the policy does indeed provide dignified financial security for all households, while increasing overall work incentives, maintaining tax revenues and increasing health and well-being in the population, then it could be an idea worth pursuing.