Quick Action Needed!! Is it time for a Green or Graded Basic Income (GBI)?
Graded Basic Income is Green
The Graduated Basic Income (GBI) is a new idea which builds on proposals for a Universal Basic Income (UBI). However, unlike the UBI, the GBI is quick to implement, avoids some of the objections against UBI, and is especially fit for these troubled times of extreme price rises. The GBI is also Green, because it does not incentivise the increased use of energy. In this is differs from proposals such as tax cuts, fuel rebates and special social tariffs which are designed to bring down fuel prices and thereby incentivise their use and over-use.
UBI has been slow coming
The idea of a UBI has been around for many years. There have been many detailed plans, none of which have come to fruition. However, the GBI can be implemented quickly in response to the current emergency while public opinion is open to radical ideas. It will leave a physical and social infrastructure which can make the implementation of UBI easier in due course.
To recap, the UBI is a payment from the government to individuals which is
* regular – weekly or monthly
* unconditional – it requires no regular ‘signing on’ or useless job applications
* basic – £100 per week could be sufficient to cover an individual’s basic needs
* universal – it applies to everybody, possibly on a graded basic so that children get less while senior citizens or disabled people get more.
UBI simplifies decisions
If such a system existed it would have immensely simplified decisions regarding Covid relief: regular UBI payments could have been increased with one-off payments as and when required. There would then have been less need for furlough payments and everybody would have been treated equally, unlike the system actually introduced by the Tories which benefited the better-off.
It is generally agreed that UBI should be taxable and would replace many existing benefits, thus simplifying today’s over-complicated benefits system. UBIs would also provide comfort to the poor and would add an incentive for unemployed people to get a job as they need not worry about the precariousness and complications that might result if the job proved to be temporary.
The perfect has become the enemy of the good
Unfortunately, discussions about UBI get bogged down in searches for an ‘ideal’ UBI system. The perfect has become the enemy of the good. There are also some who object to the UBI concept either because they disagree with the principal of unconditionality or because of practical ‘teething’ problems of implementation.
A unique opportunity
Today’s crises provide a unique opportunity. Old assumptions are being thrown to the wind: the notion that benefits (‘household handouts’) are needed is becoming universal, even among Trussite Tories. There is therefore an opportunity to introduce a Quick-Fix GBI.
The Graded Basic Income (GBI) would go to a far wider group than those who currently receive benefits – possibly to 50% of the population. There would be an element of self-certification for those who are not already on benefits. The GBI would differ from a UBI in being a sequence of one-off payments which vary over time; payments could drop to zero or a very low figure once the present crisis is over. Eligibility for GBI would depend upon having less than a certain income and/or having less than a certain amount of wealth
A Quick-Fix Proposal
One proposal for a GBI would leave all existing taxes and benefits unchanged. It would be additional but taxable. (Or for simplicity, it could be made tax-free.)
A GBI Register would be established with appropriate data privacy safeguards. Everybody on the register would receive GBI. Initially the Register would include the following:
- Everybody who receives state benefits or a pension
- Every child up to age 18
- Others who self-certify as having a weekly income of under £200 and/or wealth of under £20,000.
The Register could be established very quickly, and self-certification could be relatively easily monitored.
At a later stage, additional categories may be added e.g. house-owners who are property-rich but cash-poor: this group could be asked to repay the UBI amounts received at a later date, such as when the property is sold.
A Quick-Fix GBI for the current surge in energy bills could pay £100 monthly for six months to every adult on the Register, with different amounts special groups such as children, pensioners, or one-parent families. After the first six months, lower sums could be paid.
However, the GBI Register should be retained as a functioning entity so it is ready for the next emergency which may be just round the corner.
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