Report proposes £10,000 for everyone under 55

Report proposes £10,000 for everyone under 55
From BBC - February 15, 2018

A new report suggests the government should give 10,000 per year to every citizen under 55.

The Royal Society for the encouragement of the Arts, Manufactures and Commerce (RSA) says it could pave the way to everyone getting a basic state wage.

The Labour party has also said it is looking into similar arguments for a Universal Basic Income (UBI).

And Scotland is already piloting UBI schemes in Glasgow, Edinburgh, Fife and North Ayrshire.

The RSA report says the payments would come from a British sovereign wealth fund in the form of two annual 5,000 dividends.

The payments would not be means tested, and applicants would only have to demonstrate how they intended to use the money.

Most state benefits would be cut under the scheme.

The RSA said the dividends would help steer people through the challenges of the 2020s.

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."

Attaining skills

The report explains how the fund could help people: "A low-skilled worker might reduce their working hours to attain skills enabling career progression.

"The fund could provide the impetus to turn an entrepreneurial idea into a reality. It could be the support that enables a carer to be there for a loved one."

The fund would be built from public debt, levies on untaxed corporate assets and investments in long term infrastructure projects, and be similar to Norway's $1trn sovereign wealth fund.

Because the dividends would replace payments such as Child Benefit, Tax Credits, and the Jobseeker's Allowance, the savings for the government could also be ploughed into the fund.

The right questions

Anyone receiving the "dividends" would not be able to claim any tax allowances, which the RSA says would act as a disincentive to wealthier earners wanting to apply for the handout.

In all the RSA puts the cost of the scheme at 14.5bn a year if it is fully subscribed to, and a total of 462bn over 13 years, more than half of which would be paid for by government savings.

Jonathan Reynolds MP, Labour's Shadow Treasury Minister, said "Labour is looking into proposals for Universal Basic Income and Universal Basic Services, to help create a 21st century economy that works for the many, not the few."

"This new report from the RSA raises the right questions about the future of work and the long-term challenges we face, including making sure automation and the changing nature of work deliver a fairer, more prosperous society."

Universal Basic Income - a work in progress


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