The RSA’s report “A Basic Income for Scotland” – What you need to know

The RSA’s report “A Basic Income for Scotland” – What you need to know

The Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) recently conducted research in Fife, to come up with an effective model for a Basic Income experiment – a possibility already being explored by Fife Council. The outcomes of the research, carried out in close collaboration with Fife residents, were used to produce the RSA’s fourth report about Basic Income, and their most in-depth yet. Maurizio Colomba attended two presentations of the report and here gives us a breakdown of its findings and proposals.

Maurizio Colomba, Citizen’s Basic Income Network Scotland Volunteer

In May this year, a preview of the RSA’s report, “A Basic Income for Scotland” was held at Cowdenbeath’s Maxwell centre, with a detailed presentation of the report delivered at the Scottish parliament the following day.

The Maxwell Centre is a leisure centre, popular with the local community, so provided a friendly environment for the RSA to present its report on the future implementation of a Basic Income trial, as well as an opportunity to meet Fife residents – around whom the research was based. One of the key aims of the report was to put at the centre of its policy design the people who will be affected most by it.

The first of three parts of the report focus on data collected directly from the population through interviews, surveys and focus groups. This section addresses the needs, desires and concerns of the community – who engaged with the team with overwhelming interest. Their personal stories, which were shared with such generosity, help to build a bigger picture of the struggles and issues that exist – and the ways in which Basic Income would have a positive impact – and the ways in which Basic Income would have a positive impact – in the community, on its future, and on its relationship with the past :

  • Past
    Where poverty figures in someone’s past it seems to never fully disappear; people who had experienced poverty reported feelings of anxiety, with poverty always present in the background of their lives. As one respondent said, “It’s not called a poverty trap for nothing, it’s hard to get out of – impossible!”
  • Present
    A common struggle is the fight with the current benefits system; harsh sanctions and terms that are ever more difficult to meet and create stagnant feelings of anxiety and hopelessness as well as reinforcing stigma about benefits claimants rather than helping people out of poverty.
  • Future
    Once the idea of unconditional Basic Income was established with respondents, what the team recorded expressed ambitions and desires for a life alleviated from poverty, a life in which people feel confident about the future, in which stability allows for choice and investment in education, training, volunteering and quality time with family and the community, a life in which people feel empowered and involved rather than marginalised.

This section, in which people were able to share stories, needs and desires, was foundational to all subsequent research – and necessary, in order to build a policy designed around the actual problems it aims to solve. With the direction it provided, the team came up with blueprints for a successful implementation of Basic Income. The principles they identified are as follows:

  • Progressiveness: The implementation of a Basic Income should be gradual and incremental
  • Affordability: A Basic Income should be founded by redesigning the existing tax system as well as the creation of a “people’s fund” that would guarantee future sustainability
  • Unconditionality: In order to analyse effects and dynamics of Basic Income, it should be trialled on a whole geographic area rather than selectively or on a certain demographic.

The whole process brought to life the idea of Basic Income as a foundation for a new social contract, in which all members of society have a stake, replacing selective help for those in need.

The second part of the report outlines a plan for the progressive implementation of Basic Income in Scotland. It’s a plan that is more than just theoretical; it meticulously proposes a policy that could be an initial solid foundation upon which a future Basic Income would be shaped. With all the necessary technical detail, this project has the potential to be used by policy makers for the development of a Basic Income trial applicable in Fife, Scotland or the UK. The RSA put forward a 20-year plan divided in three stages:

  • The first stage represents the current system and where we are now – in which proposals and research for change are planned;
  • The second, which the report terms ‘Horizon 2’, is a transition period that sees the first real implementation of Basic income. In theory, this could be started in 5 year’s time,(depending on government/political support,) and consists of a £2400 per year payment for adults, (£1500 for children,) to go side by side with the current benefit system;
  • The final step, ‘Horizon 3’, which the RSA believe could be reached in 15-20 years, represents a further implementation of Basic Income, with yearly payment for adults rising to £4800 and the elimination of Universal Credit.

This vision as a whole, is intended to engender social change that aims at the reduction of poverty, but more importantly, in which no one is left behind. Although the complete eradication of poverty is a long way ahead, an effective alleviation of poverty can be foreseen for the report’s phases Horizons 2 and 3. The calculation offered in this report defines the reduction of relative poverty in Horizon 2 at 8.5%, and in Horizon 3 at 28% (33% in child poverty). Definitions are hugely important here; the numbers reported refer to relative poverty, which is defined as the “the minimum amount of income needed in order to maintain the average standard of living in a specific society”, therefore it is likely that the effects on extreme poverty (defined as “having an income lower than $1.9/day) and on destitution (lacking the means to provide for oneself) will be exponentially higher. In fact, if we consider just these two definitions of poverty, both extreme poverty and destitution would be totally eradicated – something that Universal Credit is not designed to achieve.

This section also proposes some ways to collect the necessary funds to finance Horizons 2 and 3. The proposals vary from a rise in income tax for all income brackets above middle earners, a rise in corporate taxation (which was recently lowered), a new land value tax based on the Australian model, to new wealth tax. All these proposals aim to reinforce the concept of wealth redistribution. In these terms, Basic Income is intended to generate a “new social contract” in which the whole population works towards reducing inequality and redefining the extent to which inequality can be considered acceptable, whilst rejecting the concept of poverty as an inevitable consequence of progress.

In the last part of this report, three possible policy scenarios are presented in which Basic Income could be piloted. Since Scotland’s decision making powers over unemployment benefits are limited, and full control over the devolution agreement will only take place in 2021, an assumption is made that further powers would need to be devolved to Scotland in order to proceed with the process. Each scenario considers the difficulties that Scotland could face in this process, as political support will not be enough – the active collaboration of agencies such as the Department for Work and Pensions will be fundamental to the success of the trial.

Scenario 1: DWP cooperation would be crucial to the delivery of Basic Income and fundamental to a smooth passage between Horizons 2 and 3. The main positive factor here would be that the data collected could then be used to implement Basic Income in different areas (or even the whole of the UK). However, a change in governing party could undermine the long term goals set at the beginning.

Scenario 2: This scenario represents the realistic possibility of an opposition from the UK government and consequent obstruction to the process. Political bodies and agencies could be hostile – especially to the delivery of the Horizon 2 phase, in which the current system should coexist with Basic Income.

Scenario 3: This scenario explores the hypothesis of a privately-led trial, based on the example of Kenya and the US where large philanthropic donations and smaller crowd funds are covering trial costs. This would allow for the experiment to be free from problems caused by governmental change and to be delivered quickly and effectively, however, if the government was unsupportive of the trial it could still negatively affect the results through the management of the benefit system and income tax.

The report concludes by noting that although Basic Income is by no means a silver bullet, it offers a chance to rebuild the social contract. It recommends establishing a government Commission and citizens’ assemblies to take their plans further in a collaborative environment, befitting the social principles of Basic Income.

At CBINS we’re really excited to see such in-depth research into the implementation of Basic Income being carried out. Projects like this bring the potential of Basic Income closer to being realised, supporting the work we do to raise public awareness of Basic Income and the ideas behind it. You can read the full report on the RSA’s website and more about getting involved with CBINS here.

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