Want £10,000 for free? Here’s how, and it’ll only cost you the UK’s welfare budget
Would you like £10,000 for doing absolutely nothing? Well, you may be in luck, provided you’re under 55. The cash boon could pave the way for everyone in the UK to receive a basic state income, according to a recent report.
A paper by the Royal Society for the encouragement of the Arts, Manufactures and Commerce (RSA) said the £10,000 ($14,000) payment, which would be split into two payments of £5,000 paid over two years, would mean that certain welfare benefits and tax reliefs would be removed.
According to the RSA report, the fiscal freebie would compensate workers for the way jobs are changing and progressing through the 2020s, “as automation replaces many jobs, climate change hits and more people face balancing employment with social care.”
The Universal Basic Income (UBI) scheme would not be means tested, but applicants would have to prove how they would use the money.
The RSA’s Action and Research Centre director, Anthony Painter, said that Britons are at risk financially with the looming threat of Brexit and other economic factors throughout the next decade.
“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,” he said.
“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.”
Anyone receiving the payments would not be able to claim any tax allowances. The RSA said this would act as a deterrent to prevent the wealthy from wanting to apply for the handout.
The RSA estimates the cost of the scheme at £14.5 billion a year for the whole of the UK. Over 13 years, the scheme would cost a total of £462 billion, over half of which would be paid for by government savings.
As the payment would replace government benefits such as the Child Benefit, Tax Credits and Jobseeker’s Allowance, by not spending money on the aforementioned allowances, the government could use the savings to pay into the universal fund.
A report by the Organisation for Economic Co-operation and Development (OECD) into UBI said it may also be financially ruinously for the government while providing little benefit for the poor.
The report also said the UBI would lead to higher levels of poverty if the UK were to fund the financial payments using only with money saved by abolishing the current welfare benefits system.
“However, even in the case where taxes are raised significantly to pay for (the UBI) it does not significantly reduce poverty,” the OECD report said.
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