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Could London introduce Universal Basic Income in 2021?

The London Assembly’s Economic Committee heard £75-a-week income could slash child poverty by 40 per cent in debate

London councillors are looking at introducing a Universal Basic Income to take on poverty and inequality in the English capital’s Covid-19 recovery.

Green London Mayor candidate Sian Berry and Liberal Democrat assembly member Caroline Pidgeon brought the idea of a welfare shake-up to the London Assembly’s economic committee on Wednesday in a two-hour debate.

Experts told the committee that modelling showed child poverty could be reduced by 40 per cent if everyone received between £60 and £75 per week regardless of income.

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But the committee opted to delay a vote on whether to take the matter further until March citing the need for more information.

Berry told The Big Issue that she hoped to trial a Universal Basic Income in different areas of London, citing the possibility of a 10,000 people-strong trial across boroughs to assess its impact.

“A Universal Basic Income is one of the reasons I joined the Greens in 2001. It’s the way it puts trust in people. It’s an investment directly in people, which makes total sense when you think about it,” said Berry.

“I think the coronavirus has exposed the gaps in our current welfare system in a way that it’s never done before. And the horrible thing about the coronavirus crisis is that it’s really laid bare this idea that loss of income, loss of your home genuinely can happen to everybody.

“What we need to have is a system that leaves no gaps. And Universal Basic Income is the simplest system that does that and doesn’t make anyone beg for welfare support.”

Trust for London’s annual Poverty Profile reports that  2.5 million people are living in poverty in the English capital – amounting to 28 per cent of residents and higher than the UK-wide figure of 22 per cent overall. 

Wealth inequality is an issue too, Trust for London found that London’s richest 10 per cent earn ten times more than the poorest 10 per cent.

And these figures, from the last report in April 2020, are likely to rise with the impact of the Covid-19 pandemic.

A Universal Basic Income could reduce inequality, according to UBI Lab London’s Daniel Mermelstein, who shared the modelling figures. He, too, called for a trial, warning that “modelling can only take us so far” and criticising the limitations of the current welfare system.

He said: “A Universal Basic Income is not a disincentive to work but our current welfare system is a massive disincentive to work because when you get benefits anything you do to change your circumstances affects your benefits.”

But Conservative London Mayor candidate Shaun Bailey retained concerns over UBI’s effect on work. He said: “I came from a very poor community and our guiding light was the ambition that we would pursue work. Would this rob us of some of that ambition?”

Disabled People Against Cuts’ Ellen Clifford also warned that the “great danger is that the most disadvantaged will miss out” while committee member Dr Alison Moore cited fears over the cost of implementing UBI without government support.

The committee declined to vote on the motion which would have formally recommended that the Mayor of London contacted the Government to set out a UBI pilot programme with the help of local authorities.

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The committee will return to the debate in March but a past trial in Finland suggest that the impact on work is minimal.

The two-year experiment between 2017 and 2018 found that the 2,000 people in the trial worked on average six days more than they did before receiving £490 a month through the experiment. However, survey data showed people were happier, had greater trust of other people and institutions and were more confident in their ability to take control of their own future.

Meanwhile, a study carried out in Canada last year found that giving 50 rough sleepers £4,336 each – as well as setting them up with a free bank account and a mobile phone – saved the Vancouver shelter system a total of £4,739 per person.