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What is universal basic income and why is it being trialled in the UK?

A handful of English households will get paid £1,600 in Government cash every month for doing nothing, if a universal basic income trial goes ahead.

Universal basic income is the idea that automatically giving all citizens the same amount of cash could cut poverty, as well as reducing the cost to the taxpayers of running a complicated means-tested benefits system.

But it has also faced fierce backlash from critics who believe the plan is expensive and could backfire.

This week the think tank Autonomy launched in-depth plans for how an English universal basic income trial might work.

The plans would see 30 people get paid £1,600 per month each, for two years. The scheme is not yet live, as Autonomy is looking for funding.

But the idea of 'money for nothing' has captured the nation's imagination and led to fierce public debate about the pros and cons of such a scheme.

Care-leavers in Wales are some of the first people in Britain to receive universal basic income (UBI), with the announcement of plans for further pilots in England and Scotland suggesting the idea is gathering pace across the UK.

A universal basic income (UBI) is a model that has attracted plenty of attention in recent years – not least as the impact of the Covid-19 pandemic has shone a light on poverty, inequality.

Poverty and health are intrinsically linked, with supporters of UBI arguing that a basic income floor would ultimately save taxpayer money by preventing many of the mental and physical illnesses associated with very low-incomes.

Campaigners in England have drawn up plans for the first basic income pilots in the country with 30 people receiving £1,600 a month for two years in Central Jarrow in the North East and in Grange in East Finchley, London.

What is a universal basic income?

A universal basic income is a regular payment that is given to everyone in society to create a minimum income floor. That means that everyone earns the same amount of money through the payment and, therefore, cannot earn less than that in income.

The money is unconditional with no strings attached to dictate how it should be spent and no guidance on how to act to earn it.

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The idea is meant to alleviate poverty and reduce inequality and the stigma associated with benefits as everyone is receiving the same.

However, there are many forms of basic income and not all are universal – some are more targeted at certain sections of society. Rough sleepers have been included in past trials in London and Canada.

How much is a universal basic income?

There is no set amount to a universal basic income trial. Instead it is based on the needs of the people it is designed to support and the budget available.

A universal basic income experiment in Finland gave 2,000 people €560 (£490) every month for two years, targeting people who received unemployment benefits.

Writing for The Big Issue, UBI Lab Network’s Sam Gregory said: “Most proposals in the UK range between £50 and £150 a week for adults, and £30 to £80 a week for children. The highest earners would receive a universal basic income, but would also pay more in tax to fund a basic income for everybody.”

The figure changes depending on the model, its size, the people it is required to support and how much money is available to invest in the universal basic income.

What plans are in place for universal basic income pilots in England?

Campaigners from Basic Income Conversation have unveiled plans for the first universal basic income pilots in England.

Working with researchers at Northumbria University and think tank Autonomy, the campaigners want to raise £1.6 million to fund two trials in Central Jarrow in the north-east of England and Grange in East Finchley, London.

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A total of 30 people would receive £1,600 a month for two years as part of the pilot.

Cleo Goodman, co-founder of Basic Income Conversation, said: “No one should ever be facing poverty, having to choose between heating and eating, in one of the wealthiest countries in the world.

“Basic income has the potential to simplify the welfare system and tackle poverty in Britain.”

How does the Welsh trial of universal basic income work?

Care leavers in Wales received their first monthly basic income payment of £1,600 on July 1 as part of the Welsh government’s pilot.

The no-strings-attached money was put into the bank accounts of about 500 18-year-olds who have been in the care system to offer a “safety blanket” as they enter adulthood.

Launching the pilot, Jane Hutt, Welsh minister for social justice, said the Welsh government had chosen care leavers to be the subjects of the trial “because of the unique set of challenges they face”.

“By supporting this group with the security of a regular, guaranteed and unconditional monthly income as they leave care, we hope we will allow them to consider their lives beyond day-to-day concerns and look to their future,” she continued.

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