RSA Suggests Giving Everyone Under 55 £10,000



RSA Suggests Giving Everyone Under 55 £10,000

The Royal Society for the encouragement of Arts, Manufacture and Commerce (RSA), has proposed offering everyone in the country £10,000.

They argue that the payment, which would come in two separate instalments of £5000 over the course of two years, would help promote self-improvement and training as well as assisting those on low incomes.

The payment wouldn’t be means tested but would only be given once recipients could show they intended to use it constructively.

The RSA has said that money woud act as a “stepping stone” towards a universal basic income. Matthew Taylor, who leads the RSA, believes that the extra boost from the government would help people under the ages of 55 to better manage themselves financially in the 2020s.

“Individuals claiming the £10,000 would be required to demonstrate how they intend to put the fund to good use but would need to ‘claim’ via a local authority, accredited employer, union, university, college or other public body,” the report says.

Anthony Painter, director of the RSA's Action and Research Centre, said: "The simple fact is that too many households are highly vulnerable to a shock in a decade of disruption, with storm clouds on the horizon if automation, Brexit and an ageing population are mismanaged.

"Without a real change in our thinking, neither tweaks to the welfare state nor getting people into work alone, when the link between hard work and fair pay has broken, will help working people meet the challenges ahead."

The idea of a universal basic income (UBI) has been around for a long time and exists in many forms but essentially would result in a complete overhaul of the current welfare system in favor of a flat amount given to all citizens. The current proposal for two installments of £5000 would not eclipse the present welfare system and would be used in conjunction with current benefits. The concept of UBI has been slowly gathering momentum in recent years with shadow chancellor John McDonnell planning on setting up an office with the express purpose of working out the feasibility of UBI.

The UK isn’t the first nation to toy with the idea of issuing all citizens with a base income, Finland is currently half way through a two-year pilot which aims to give unemployed Fins a monthly allowance of £497. The US state of Alaska has had a scheme in place since 1982 which gives all inhabitants an annual allowance from the Alaska Permanent Fund.

There are those however who don’t believe that the idea of a UBI is feasible. Brexit campaigner Patrick Minford from Cardiff Universities Business School discredited the idea and said it is "not a workable scheme because it's far too expensive".

"It creates a tremendous tax, a disincentive for the average person further up the income scale who's paying for it all." He added

The RSA believe that the introduction of a UBI would help get people back into work as well as giving more security and a better quality of life. One report, carried out by the National Bureau of Economic Research found that universal income in Alaska “does not significantly decrease aggregate employment".

Another study by the Organization for Economic Co-operation and Development (OECD) found that the effect of UBI would vary greatly depending on each country, its inhabitants and its current tax and welfare systems. It was also found that a universal income could also be financially crippling for certain nations as well as providing limited boost in quality of life for its most vulnerable citizens.