Radix has set out proposals to address Britain’s increasingly unequal society, including twice yearly ‘helicopter money’ for all adults, carbon tax dividends for young people and a regular payment based on a share of a ‘sustainable GDP’.
Our report, Money for Nothing?, by policy analyst Kevin Langford, argues that programmes to address inequality need to deal with issues of esteem and trust in government as well as of income and wealth to gain political and public support.
The report looks at existing radical proposals to redistribute wealth, such as a universal basic income (UBI) or a job guarantee scheme, both of which have been gaining favour since the pandemic, but rejects them as neither financially nor politically viable.
The report is sceptical about a Job Guarantee scheme as proposed by Modern Monetary Theorists, which it suggests is “most usefully seen as a thought experiment highlighting some matches in the economy between unmet needs and available labour, rather than a proposal to be taken literally.”
The paper says UBI schemes of around £60 per week per working adult are financially feasible, but would cost £15-20bn more than delivering a similar financial benefit to lower income households through the existing benefits system. Gven that schemes at this level come nowhere near providing enough to live on and only reduce means-testing by 10-20%, The report concludes that they are neither worthwhile or politically marketable.
On the upside, the paper identifies three alternative unconditional payments schemes:
- A payment of £150 twice a year to individual bank accounts whenever inflation falls below the Bank of England’s target, which would have a positive re-distributional impact while helping to reinflate the economy
- A Carbon Dividend, which would be distributed to all young adults aged 16-30 as compensation for the impact of climate change – funded from carbon taxes
- A modest payment of about £1,000 to working age adults linked to the country’s success in achieving a redefined sustainable GDP, compatible with the UK’s net zero commitment
Explaining his recommendations, Langford says:
“Unconditional universal payments – which don’t need to be ‘claimed’ and don’t come with any stigma – are a good idea in a world where there is long term uncertainty about the availability of ‘good’ jobs – but such schemes need a narrative which is credible and commensurate with the scale of the payment promised. Our proposals seek to hit the sweet point of balancing a compelling narrative and affordability.”
Ben Rich, Chief Executive of Radix, adds:
“The impact of Covid and long term developments in the economy demand some unconventional approaches to tackle inequality. As a result, we are seeing increased enthusiasm for job guarantee schemes and universal basic income. Our concern is that – as these are shown to be unworkable – politicians will default to the status quo or even round two of austerity, which would be deeply damaging.
“Instead, we should be examining more modest but deliverable ideas involving unconditional pay-outs, which combine a level of redistribution, with new narratives of entitlement and political deliverability. This paper is an important contribution to this thinking.”
Read the full report here