Universal basic income (UBI) is often dismissed as unaffordable, unrealistic, or politically impossible. But the conversation I had recently with Howard Reed and Elliott Johnson of the Common Sense Policy Group at Northumbria University left me less sure of that.
The Group's research challenges the Treasury orthodoxy in two important ways:
-
Public investment multipliers are far bigger than assumed, and
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Even current spending has a strong multiplier effect, meaning it can pay for itself
And if the economic case for investment is stronger than we've been told, then the political question changes too: why aren't we investing in that case?
We also discussed the Group's three-tier UBI transition proposal, how it interacts with Universal Credit, and why the security it could supply might be the missing foundation of a functioning economy.
This is the audio version:
There is no transcript of this discussion as it would be too long, but this is a summary of the conversation:
I recently hosted Howard Reed and Elliott Johnson on my YouTube channel. Both are members of the Common Sense Policy Group based at Northumbria University, and they're doing some genuinely innovative work that challenges the economic orthodoxy that has dominated UK policy for far too long.
Howard and I go back a long way. We've collaborated on various projects over the years, and have co-authored, and he's now a Senior Research Fellow in Public Policy at Northumbria.
Elliott is the Vice Chancellor's Fellow in Public Policy at the same institution.
Together with colleagues Kate Pickett, Matthew Johnson, Dan Nettle, and Ian Robson, they've established the Common Sense Policy Group, which is producing some of the most interesting policy work I've seen in recent years.
What follows is a summary of our discussion, based on the transcript of our 45-minute conversation.
The Origins and Mission
The Common Sense Policy Group emerged from a growing concern in the run-up to the 2024 general election. As Elliott explained, the Group watched Labour's leadership become increasingly complacent about what would be needed after winning power. The so-called "Ming vase strategy", which term was used to suggest Labour must not knock anything over, or say anything that might lose votes, dominated Labour's approach. But this avoided confronting the reality that everyone sees: a country in decline, rampant inequality, and poverty levels not seen since the Second World War.
The group produced "Act Now", a comprehensive domestic policy agenda with universal basic income at its core. The title wasn't metaphorical; the Group genuinely believe that without immediate action, Labour will be out on its ear by 2029, potentially being replaced by something far more dangerous.
Interestingly, their work focuses particularly on the Northeast, where their University is based, which Elliott described as "a microcosm of a larger problem". It is an area that produced enormous wealth during its industrial history, but has been systematically let down for 40 years. Yet their analysis applies across the red wall constituencies and beyond.
The Multiplier Effect Revolution
One of the most significant contributions from their research concerns investment multipliers, and this is where things get really interesting. Howard has been working on this since 2023, examining what happens when the government invests in infrastructure, the NHS, or transport.
The conventional Treasury approach has always underestimated these effects. But the Group's analysis, extending work done at UCL's Institute for Innovation and Public Policy, found something remarkable. Using data from multiple countries, including the UK, New Zealand, and Canada, up to the pre-COVID period, they've found multipliers of around three pounds for every pound invested, measured about nine years after the initial spending.
Even more striking: a sustained 1% increase in investment leads to the economy being approximately 3.5% bigger after ten years. This is a permanent effect, generating extra tax revenue every single year. As Howard put it, "that pays for a lot of the investment."
The reverse is equally important: when George Osborne cut public investment in the early 2010s, tax revenues fell, making austerity self-defeating. This is, of course, exactly what I've been arguing for years, but now we have specific numbers to reinforce that point.
The Current Spending Revelation
What particularly caught my attention was their work on current spending multipliers. There's a widespread belief, and one that Labour has bought into, that capital investment is acceptable but current spending isn't. This is nonsense, and their research shows why.
Current spending includes paying teachers for new schools, doctors for new hospitals, and construction workers for transport infrastructure. When they estimated a model including both capital and current spending, they found that current spending also has multiplier effects. They're not as large as the impacts of capital spending, but they're there and significant.
In year two, the peak multiplier effect of current spending was about 1.35, meaning that spending essentially pays for itself even before accounting for longer-term tax returns. This completely undermines the government's fiscal rules and their justification for cuts to day-to-day spending.
As I noted in our conversation, what they're really demonstrating is that if you can do something, you can afford it. This echoes Keynes's fundamental insight about real resources versus money. The logic here is entirely consistent with modern monetary theory: spend first, and the tax revenue follows. In that case, we should be talking about real physical constraints and resource availability when we discuss economic policy, not arbitrary financial limits.
Universal Basic Income: A New Approach
The major focus of our conversation was Universal Basic Income (UBI), a topic I'll admit I've walked around somewhat cautiously over the years. Previous concerns about tax implications and practical implementation have made me hesitant. But the Group's work on transitioning to UBI is genuinely innovative and is helping shift my thinking.
Elliott provided crucial context from his research on disability and welfare. The current system, he argued, has fundamentally failed by any measure. It disincentivises work, creates cliff edges and poverty traps, and leaves people, including those in supposedly secure employment, vulnerable to economic shocks. The pandemic demonstrated how quickly middle-class security can evaporate.
What struck me most was how they've turned the right-wing argument about UBI on its head. Rather than disincentivising work, as critics claim, the Group shows that UBI actually removes perverse disincentives in the current system. It eliminates the fear of losing benefits if you earn over a threshold, removes concerns about marginal tax rates, and provides genuine security that allows people to take productive risks.
This is the key insight: most people live in precarious situations. UBI provides the element of security that enables people to invest in themselves, retrain, start businesses, or take on productive work without fear of losing everything. I have to reconsider this issue as a result.
The Three-Tier Proposal
The Group's UBI proposal comes in three tiers of increasing generosity. The "starter scheme" (using 2023 figures) would provide £75 per week for working-age adults, £50 per week per child, and £205 per week for pensioners. Crucially, they maintain universal credit alongside this but with a disregard, ensuring everyone gets at least £20 extra per week compared to current means-tested support.
This starter scheme has a gross cost of £183 billion but becomes fiscally balanced when you account for reduced means-tested benefit spending and tax increases.
The highest tier, scheme three, pays everyone at the minimum income standard of £295 per week for adults and £100 per child. The gross cost is £670 billion, which sounds enormous, but when you account for health impacts, multiplier effects from associated public investment, and progressive tax reforms, scheme two (the midpoint at £394 billion gross) becomes affordable, and the highest tier is reachable.
Public Support and Political Feasibility
One fascinating aspect of their research is the public opinion work the Group undertakes. Using conjoint analysis, which is a market research technique, they presented people with different policy bundles combining tax changes and spending commitments. The results showed that basic income and progressive tax reforms are much more popular than commentators assume, even before any public campaign to make the case.
They've also developed something called "adversarial co-production," where they work with opponents of these policies to understand how they would argue for them to friends and family. This reveals surprisingly persuasive arguments around security, freedom, and autonomy that proponents might not consider.
The Path Forward
In anticipation of this interview, I read the Group's book "Basic Income: The Policy That Changes Everything" as well as downloadable reports from their website. What Howard and Elliott stressed, though, was that their forthcoming book, "National Renewal," will build on this work and is expected in summer or autumn 2026. The message in it will be clear: politicians need to understand that what's popular in their bubble isn't necessarily what the nation thinks. People need security, predictability, and the ability to achieve their goals.
What impressed me most about this conversation was the pragmatism underlying their radical proposals. They test policies for feasibility, affordability, and popularity. They recognise that introducing UBI in stages makes it familiar and non-threatening. They're willing to work with any party that takes up these ideas.
Their work represents a fundamental challenge to the centrist mush that dominates policy debate. Whether it's Zack Polanski and the Greens, or potential allies in Labour, there's a growing recognition that continuing down the current path means losing to those who promise either regression or false solutions.
The northeast may be their case study, but this Group is talking about national renewal, or national decline. The choice, as they argue, is ours to make. I agree.
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Worth making the point that back at the end of the 19th Century it was far from certain that the USA would be the dominant power in the American Continent the other contender was Argentina
We know what happened there!
I can certainly see that the way we are going will not end well and without the sort of Government action that brought the Industrial Revolution to Europe, the USA & Japan we are condemned to decline.
This makes sense to me given what you have been talking about in terms of entropy and thermo-dynamics.
The universe exists it seems to me on the creation and expending of energy, which is a basis of nearly all life.
UBI provides energy in the terms of money and contributes to the creation of a healthy spend and tax cycle that helps to keep the economy alive, which is the multiplier return. Money is the lifeblood of the economy.
Austerity really is the withdrawal of money as energy, and is the equivalent of bringing darkness and economic necrosis. It’s like turning off the sun. Necrosis is the end. I am pleased that you feel more secure about UBI, the evidence seems compelling and heartening – well done Howard & Co.
The only thing is that in my view and what I have been thinking for some time, is that there has been a battle over who controls the money supply between central banks and markets. Markets have convinced many of us that money should be awarded to the rich – many of whom are essentially thieves moving money around especially to themselves. They have also captured the political system and the Treasury. We can see the effects of this in dying high streets and the growth of Fascism.
The denials are going to be vociferous – led by rentiers who feed off the lack of money liking to create money with interest applied instead and they will be threatened by UBI. That is what will drive the opposition as well as the usual bullshit about moral risk, can’t afford it, the politics of the undeserving poor, TINA etc. Hopefully this excellent research will help break the mould.
I like the motivation in this group.
I find the analysis of UK politics convincing.
However:
In the absence of housing reform I predict that any universal income payment will inflate house prices and rent by exactly the amount of that universal income. Just a question of how long it would take, not if it would happen….. I fear a huge wealth transfer to the asset owning class…
How long did it take for Thatcher’s alleged ‘gift’ of UK council housing to the working class to make the rich richer? 15 years or so?
I will keep this brief – I am trying to write something comprehensive on a continual fractional transfer of ownership contract for all buildings and land to eliminate rent while keeping all of the mobility benefits of a rental market – in order to address exactly the benefit trap and the individual precariousness of low paid workers that is discussed in this video. Apologies Richard, that’s all I will say here.
I’d love to hear other contributors thoughts on how to reform the UK housing system.
I’m not an economist but I have trust in you and the people in your video so I’m happy to believe we can spend the money.
But why is UBI better than a work guarantee?
I’d feel much more enthusiastic about a work guarantee for those who want it – working on infrastructure construction or learning trades or working in care homes or learning professions doing things we really need. All of the nature restoration, local food growing projects, proper recycling, collection of unwanted furniture and repair of all goods currently going to landfill and incineration. There is so much that needs done…. why can’t the government just pay everyone who wants to work and can’t find the kind of work they want?
UBI seems to rely on the ‘stimulus’ idea that then the the ‘market’ should allocate the work and material resources.
Why should the government not directly employ people to do work that meets our democratically agreed social and material goals?
Could the multiplier effect be gained this way with government spending on things we actually want done?
Noted
I hope the Common Sense team might respond.
Thanks Anja
To minimise the risk that UBI inflates rents, I’d recommend a combination of rent controls (to stop predatory rent increases) and an expansion of social housing provision (local authorities and housing associations).
best
Howard
All things that I would happily endorse, Howard, and which have be discussed here on many occasions.
What about those who can’t work? Or would you envisage the job guarantee acting as an extra layer over UBI? (which I think would be my preference)
UBI provides choice.
A policy of full employment assists it.
No one, with the greatest will in the world, can guarantee jobs in the right place at the right time. Thatr is my probnlem with the JG: there can be no G in it.
@ Johan G
Thanks for your question…
I would prefer a job guarantee over an income guarantee as it seems to spend money for democratically agreed objectives rather than operating on a ‘stimulus’ and ‘let the market allocate resources’ model.
I don’t instinctively have a strong opinion about a job guarantee… It’s not like I think we need to somehow completely get rid of the benefits system…. I believe government should just be spending money paying wages for meaningful things that we have democratically decided we need done in our community.
I am much more preoccupied (probably somewhat pathalogically obsessed!) with the need to ensure universal property ownership and eliminate rent (on a flexible model that allows for moving house a lot that I am trying to write out thoroughly). I hope this would provide freedom for all of us to work only when we need to to pay for real products and services that we need and want … to work only at things that we regard as non-harmful to the environment and meaningful or necessary. I am admittedly obsessed with the potential for resisting rentier/financier control and ecological catastrophe that I feel this change would give all of us…… but I’m an not an economist… so I will write out my idea clearly as soon as I can and find somewhere other than here, (I have already taken up too much of Richard’s time talking about this) to expose it to scrutiny. Perhaps I will discover that it really wouldn’t work or really wouldn’t achieve the ends I hope for….. and then I can finally let it go and stop annoying everyone with it and I suppose wasting my own time thinking about it.
🙂
I think that one fundamental to consider is that UBI may be more conducive to individuals identifying a vocation whereas a job guarantee, whilst it has its merits, could become more of what we currently have which is ‘take this work or else’. There will always be people that need, and are happy to do, stop-gap work but if the support system we apply is helping people to find and secure the type of work that ‘gets people out of bed in the morning’ then that can surely only be a win for society.
Another way of coming at the issue of optimising the economy for all has been with us now for 90 years this year 2026. In 1936 John Maynard Keynes had his book “The General Theory of Employment, Interest and Money” published. A central theme of this book was the role played by “uncertainty” yet this has not been thoroughly understood mainly because it’s been drowned out by simplistic conventional economic thinking that the market always optimises an economy with minimal downside for all. In reality “uncertainty” is continuously generated in ways we barely acknowledge or think and this continuously undermines demand.
Examples, are the imposition of a Fiscal Credibility Rule, monopoly supply situations like large supermarket chains, on-line trading, privatised public utilities like water and sewage treatment and railways, suppression of trade union rights, removal of capital controls and mortgage loan under-writing standards accompanied by under-investment in affordable home provision. Uncertainty is also being generated outside the national economy by global trading manipulation in different ways including the big one of suppressing home consumption in order to maximise exports. I’m sure with a little effort you can all think of more practices that generate an uncertainty ripple effect on demand in an economy.
Of course, if a country decides to tackle the causes of uncertainty we’re back to understanding the Rule of Law the point of which is to maximise accountability to all citizens not just an elite few. As I’ve pointed out previously such accountability needs at the least a coherent understanding of money creation by the electorate. Now I’m strongly suggesting we need to better understand the role played by uncertainty!
I agree with you.
This is a massive issue.
Write a blog post for me on it – please. Send it via my email.
The general theory behind Keynes’s understanding of the role played by “uncertainty” can be found by readers asking the following Google AI question:-
“Why did Keynes emphasise the role played by uncertainty in an economy?”
What he didn’t do was to delve deeper and categorise a list of behaviours in an economy, or global economy, which generate uncertainty. I’ll see if there’s much research done in this direction. I suspect not because market competition, the so-called “Invisible Hand” is over-rated as being “fair” despite Adam Smith’s warning about there being conspiring to be “unfair.” As far as consumers are concerned they will generally simply seek the lowest price consistent with the level of qualities they desire. They will not seek to research whether that lowest price is “rigged” in any way.
Much to agree with
The suppression of domestic demand is indeed a sore issue – Michael Hudson writes about it in ‘Trade, Development & Foreign Debt: How trade & development concentrate economic power in the hands of dominant nations’ (2009 Ed).
It is one of his more dense books but Hudson has always seen trade as warfare – waged domestically and abroad. So much for there being anything ‘natural’ about domination in trade – it is designed to be like that.
Most if not all markets are just shop windows for rich capital to come and pick off what they want, when they want. ‘Free market’? No.
In any situation where additional cash is being put into the economy such as it would be with UBI, you have to somehow destroy the money to help prevent inflation? How is that done? Tax. Most millionaires would say of that – ‘Well, don’t destroy the money, I want that’.
As for housing, an expansion of social housing might help, but not when it requires 80% market rents (tracking private rents) because government refuses to adequately support capital investment and management and maintenance costs and Right to Buy has not been withdrawn (allowing social housing numbers to catch up).
Or, price controls, through rent control and even house prices in the private sector. Rent law could be written that increases tenant security and protection from exploitation instead of encouraging exploitation as when Thatcher got rid of rent controls.
But on top of that, you would also need sensible polices to deal with the cost inputs into housing with good interventions concerning inflation in the building industry, supply chains, good, reasonably easy trade relations and processes, trained labour capacity (flexible immigration policy), peace in our time etc. And we simply do not have that at the moment. Do we?
In housing, the biggest issue is its use orientation. Its financial/asset value – exploited by owners and lender a like – is more important than its basic use value – as shelter. Housing is over-financialised, a chattel of capital only, not a ‘public good’ apparently – which it is in my view.
Thanks
“… Hudson has always seen trade as warfare – waged domestically and abroad. So much for there being anything ‘natural’ about domination in trade – it is designed to be like that.”
Hudson is right in my view there are always threats to the eveness of demand both within a national economy and outside one globally. Elites operating within these markets will always seek means to maximise their money intake (profit) even though it will have the effect of reducing demand for other needed goods and services. Indeed a government as a servant of a rich elite may also have a malign influence in “unequalising” demand as we see in the housing market where an increasing amount of income in the UK has to be spent in “putting a roof over your head or that of your family” relative to expenditure on other things.
The point to be concluded from this is that whilst it might make sense to have schemes like Universal Income and Job Guarantee it also makes sense to tackle threats to the income from such schemes that result in unbalanced spending of it. Put another way we need to tackle pressures that result in unbalanced demand. Such pressures can be extremely dangerous to the functioning of economies. An obvious fairly recent one was the ballooning unsecured house mortgage debt which lead to the 2007/2008 GFC.
“Elites operating within these markets will always seek means to maximise their money intake (profit) even though it will have the effect of reducing demand for other needed goods and services.”
I did not do that when I ran businesses.
This generalisation is not something I recognise from tbhe business community I served.
We have to do better than argue on the basis of generalisations some cannot recognise. It is simply not true that all trade is harmful.
This is exciting!
But, (puts up hand from back class) it contains the phrase “that (tax) pays for a lot of things”.
But tax doesn’t pay for things!!
So when we see the social multiplier at work, looking strictly at the tax raised (money destroyed) how can that be rephrased to fit with MMT language?
IOW – in addition to the obvious benefits of increased current or capital spending on quality of life, what is “good” about the extra tax raised?
Is it just that it creates much more legroom for a Chancellor in terms of using tax to control inflation/redistribute wealth/nudge behaviour? (an MMT explanation)
Or is this “pays for a lot of things” language aimed at those who don’t buy into MMT, ie. most politicians – and want to be able to “balance spending and taxation” according to “orthodox” (but wrong) economic theory?
This a genuine question, prompted because the research is obviously significant and positive. I want to be clear.
OK, I admit I struggled here to work out what you are saying, because I could not find the words you used as I do not think they are in the post, or the podcast, which acknowledges MMT, although I am not sure it is wholly embraced by the Common Sense Group, at least explicitly.
I think you are referring to this:
This is a permanent effect, generating extra tax revenue every single year. As Howard put it, “that pays for a lot of the investment.”
The reference was, in effect, to the return on investment, not tax per se, which was a proxy for the fact that the investment is worthwhile in financial terms, and if we are going to win arguments there is no doubt that this is one argument we will have to win, amongst others.
So my problem is, what is wrong with being able to demonstrate that a return is made? The point being made was that state spending created a return. Is that really a problem? And why? And how can that be rephrased, if necessary?
That’s exactly the clarification I needed – my mistake/concern was that “pays for” could be thought to refer to taxes financing spending. Your clarification satisfies me 100%, but, but, if I wanted to OPPOSE the idea, and oppose MMT (and plenty do), I would definitely try to criticise it (unfairly) on the basis of inconsistency regarding how public spending is financed. The words “extra tax revenue” are only one sentence behind the phrase “pays for”. Some will seize on that.
It would be one of many below the belt attacks that will come during 2026. I want to be ready for them, so my very evil mind tries to predict how many desperate ways neoliberals will attack as part of a soundbite exchange in a 2 minute video clip extracted from a GB News bulletin or BBCQT.
But if “things” are widespread social and economic benefits making the world a better place, including a (sustainably) growing real economy, then I am quite happy.
But I think others may well try and attack on that issue, and best to have the riposte prepared and rehearsed.
Thanks
Noted
I appreciate comments like this – it is so easy to make a mistake
I share RobertJ’s concerns. If we have MMT, then technically it is economic capacity that is the finite problem, not money. So why look for a return?
But maybe, we are ourselves are over-financialising the concept of returns here too much? Maybe – in a world where we are promoting care – the returns don’t have to be depicted as financial? How about that? They could be more qualitative – happiness, less depression, fewer potholes. A better NHS budgets means that people will not go abroad for treatment that is costing as much as £19K per person for NHS to put right!
We spend, then tax and the tax is gone from the economy (destroyed) because it is now with HMG, who, when they choose to spend it, means that it is no longer tax – it is just now Government money. Does that help?
The first thing that comes to my mind with UBI is the ‘spend to save’ principle – that through continuous re-investing, you keep the cost of things down. Austerity does the opposite. Tax collected can be reprocessed back into the economy as a budget resource should a government WISH to do that, rather than write it off (destroy it). Because what matters is what is was spent on, and what it will be spent on next time around. In fact what we are doing is just ensuring the continuous throughput of base money (not interest bearing money) through the economy as spend and tax. OK, so tax rates might have to vary when recycled tax goes back into the economy alongside new fiat money. Or, the recycled tax goes to another sector of the economy? Whatever happens some sort of intervention will be needed.
But the story to the public is investment outcomes – stops potholes; treatment in NHS corridors etc. And let us not forget what is said in ‘The Joy of Tax’ – the benefits of keeping the pound in circulation (a stronger currency in demand), avoiding pools of money growing that will just encourage inflation and speculation, the democratic benefit etc. There’s lots we can work with here.
I am clearly not arguing for a financial measure alone on anything – but there is no doubt that shwoing a return helps win some argumemnts – and we have a long way to go before we get the system we want – so having tools for the transition is vital – and I can live with that.
I too also feel the reference to certain phases being “fiscally neutral” as being confusing in terms of tax not paying for spending but maybe the Mmt point is we can set up the phases before we have tax, IF it won’t impact on inflation (STABS). But as suggested in the podcast it also needs to go with a radical change of tax system.Would that be fair?
I have two other questions:
1) is there a risk of inflation from UBI?
2) Where does the money in the multiplier effect come from if the only sources of new money are the government and banking loans? Is it just that money circulates more? Would an increase in bank loans good? Or have I got something fundamentally wrong about the theory?
1) No, unless giving those on lower incomes more increases demand and the economy cannot expand to meet it – so calibration is required, hence the gradual introduction.
2) The velocity of circulation increases. Effectively, that is it.
UBI has always intrigued me. About a decade ago I spent a day at LSE listening to various speakers on UBI… and forgotten most or what was said. One nugget has remained – an experiment in Manitoba, Canada showed that young men worked less… it was seized upon by opponents saying “told you so – young men will just sit in their underpants and play video games (or the 70s equivalent)”. However, in reality it was young men staying in education longer because the pressure to earn was less. The evidence is clear – give people a safety net and they will do better….. and that is good for us all.
Whether it “pays for itself” through multiplier effects is moot – the evidence is interesting but, in the end, we won’t know unless we do it.
One area that will be contentious – particularly so in today’s environment – is “who is eligible?” I fear the anti-immigrant sections of society will have a field day. How do we deal with this??
A good question.
I hope Howard is noting questions needing answers here.
It looks like the Manitoba was a universal credit type minimum income guarantee rather than a universal basic income.
https://www.bbc.co.uk/worklife/article/20200624-canadas-forgotten-universal-basic-income-experiment
This is the argument I have with my friends who support this UBI.
We already have a minimum income guarantee for people working at least 16 hours a week. We can argue very legitimately that the minimum level might be set too low.
And there are other problems with this system in that, for example, it penalises low paid workers in the gig economy who cannot demonstrate regular income flows. Additionally I also fear that in the absence of housing reform, a large chunk of any improvement in benefit levels will go to landlords and contribute to ongoing asset price inflation.
I would be happy to see substantial improvements in benefit payments and glad to be proved wrong on my fear that most of the money will end up with the asset owning class….
Hi Richard, I admire the way you are open to changing your mind when pertinent new information becomes available! Your UBI journey to date has been an ongoing case study in thoughtful consideration and evaluation, from your previous work with Howard Reed that seemed enthusiastic to more recent occasions when you have not just walked around but poured cold water on the idea, for example: https://www.taxresearch.org.uk/Blog/2020/03/22/how-to-help-the-self-employed-through-this-crisis-without-a-universal-basic-income-which-we-cannot-deliver-right-now/
Thanks for revisiting this subject today. There are many potential benefits to be had with UBI, as comprehensively set out by the likes of Guy Standen (e.g. in ‘Basic Income and How We Can Make It Happen’) and Malcolm Torry (‘101 Reasons for a Citizen’s Income’) – but what about potential downsides that you and others have previously drawn attention to and how to actually get there? It seems the Common Sense Policy Group are doing fantastic work in this regard and it is exciting to realise that this is still an idea whose time may well come.
I am pleased to see you taking more interest in UBI. I have been a fan of the idea of UBI since I read a privately published book which described an approach to economics based on a scientist’s way of thinking. It was written in the early 1980s by Keith Roberts (one of the designers of the first British hydrogen bomb), and was prompted by thoughts about inequality, and the unjustified obsession with growth above all. Among other things, he proposed unifying UBI, welfare allowances, and income tax into a single item, so that the amount you paid or received varied on a continuously sliding scale, algorithmically calculated from your income and agreed allowances in a way that had no step changes, but just a smooth transition between a basic income and steadily increasing tax as required.
To another scientist like me, this was a very attractive approach to personal tax and allowances, but I can see that explaining it to the general population might be a huge challenge.
Paul
**********************
PS: Richard – if you are interested, you can access the text at https://cassland.org/words/KVRBook.pdf
Thanks
I am afraid my reading list is already far too long….
A UBI for creative artists in Ireland has been trialled and is now formally instituted. It is awarded by application so obviously a degree of qualification goes on but the results of the trial must support it. It pays €325/week/individual.
https://www.rte.ie/culture/2025/1007/1537249-budget-2026-basic-income-for-artists-scheme-to-become-permanent/
I support the idea.
Rob is right about the benefits of the Republic of Ireland’s UBI. It enables creative people of all sorts to concentrate on their skills. Musicians there whom I know are able to spend their time composing and experimenting, where in the past they’d have to work in a dead-end job to get by, the result of which was their creative output was minimal. Among them are enormously talented composers and performers who have a compulsion to create and who suffer from mental health problems if that need is denied or restricted. Adoption of UBI for creatives has inevitably resulted in a blossoming of cultures. The same would happen here if UBI were to be adopted, but the real pay-off is across the whole population where the multiplier effect is a boost to the whole economy
Noted, Ken.
I was reading Rutger Bregman’s book, “Utopia For Realists” a few weeks ago in which he mentions Richard Nixon’s attempts to introduce a basic income bill in the US in the late 60’s. The bill was defeated in the Senate (in 1972) for various reasons, not least because of a lack of Democrat support. How US politics have changed since those days when a Republican President would consider such a progressive policy! According to Rutger a key factor in defeating the bill was the highlighting of a failed similar system in England from the late 18th century called the Speenhamland system. The failure was documented in a Royal Commission survey, which concluded that it was a disaster as it removed the incentive to work and encouraged immoral behaviour. Recent reviews of the Royal Commission report however suggest that it was essentially fabricated and the truth was the complete opposite. Rutger is an historian and encourages us to learn from the past…. that any attempts to introduce a UBI will be strongly resisted by those who believe that a life without poverty is a privilege you have to work for, rather than a right we all deserve.
And the world has moved on somewhat, even from the 70s
On reflection…..
Have I misunderstood what people mean by UBI?
from the article:
“It wasn’t a case of getting money to live and do nothing,” says Sharon Wallace-Storm, who grew up in Dauphin and was 15 when the experiment began. “They set a level for how much a family of three or four needed to get by. You applied showing how much you were making, and if you didn’t meet that threshold they would give you a top up.”
Perhaps I am wrong in thinking that is what people mean by BMI… a minimum amount paid to everyone and earnings are always on top of that.
I will go back and listen to the video again…….
That is not what is being propsoed.
Go to the Common Sense Group for details.
Very interesting.
The most cogent argument against UBI that I’ve encountered is that it allows markets full rein. Whereas Universal SERVICES help to diminish markets.
One has only to see how Farage – already in favour of an insurance based NHS – would find it much easier to argue that that presented no problem if everyone had UBI.
That is why – if UBI were introduced, I think introducing it in stages would be key – partly to guard against inflation in general but particularly all pervasive ‘markets’…
Noted
And how would his argument work if UBI was insufficient to let people pay the premiums?
Thanks, everyone, for this really thought-provoking discussion. We have developed a huge amount of detailed work on the feasibility, affordability, popularity and effects of Basic Income since 2018 as we began to form what would later become the Common Sense Policy Group (https://commonsensepolicygroup.com/). Summarising some of the key points on the podcast was a somewhat daunting task, but I think the need to understand why people have often intuitive opposition to Basic Income and how that can be overcome is absolutely fundamental to moving it forward as a policy. Our focus on narrative development, in particular adversarial co-production with opponents of policies, attempts to address this and we have found good (and growing) evidence of its ability to persuade (e.g. https://doi.org/10.1332/17442648Y2023D000000005). The household fallacy was just that, but it was also extremely effective in that it appealed to people’s intuitions. We believe that Basic Income has the ability to help address the fundamental issues identified by proponents of a range of economic schools of thought, but we absolutely must make a clear and intuitive case to policymakers and the voters on whose support they rely.
In terms of all the specific questions, Richard, it’s looking like we might need to do a follow-up!
Agreed, Elliott. You are welcome to come back.
https://www.taxresearch.org.uk/Blog/2026/01/14/podcast-ubi-and-the-common-sense-policy-group/comment-page-1/#comment-1063058
?typo?
“hardly endorse”?
or
“happily endorse”?
It ought to be possible for a local authority to hoover up privately rented domestic accomodation of whatever type, when it comes onto the market, to add to its social housing stock, and prevent it going to another private landlord, the sale could be with or without sitting tenants. Central govt would need to support the purchase, and would be collecting CGT on the sale from the landlord vendor, and could exempt the sale into public hands from stamp duty.
Some councils do this already but its expensive for them as they can’t create money.
And I can edit my answers…
The payments could simply be made with new bonds – issued by a state owned social housing compamy.
@ Richard
“We have to do better than argue on the basis of generalisations some cannot recognise. It is simply not true that all trade is harmful.”
Yes it is true that some business people will try to ensure that their workforce receives adequate remuneration and working conditions but the real question is whether this activity is a dominate activity and the answer is that isn’t. Why? Because if it was so we wouldn’t, for example, have seen the de-industrialisation of the United Kingdom and the United States with the latter trying to reverse this by raising tariff barriers.
It’s possible I think to trace this back to the 19th century and the clash between the theory of Say and Marx.
Say’s Law (named after Jean-Baptiste Say) posits that the act of producing goods and services generates an equal amount of income among those involved in the production (wages, profit, etc.), which can then be used to buy the goods produced. This creates a self-sustaining cycle of production and consumption, making general overproduction impossible in the aggregate. This can be formulated as C-M-C where C = Commodity and M = Money. Say’s Law assumes that money earned will always be spent, either on consumption goods or invested in capital goods, meaning there is never an aggregate lack of demand.
Along came Marx who basically said that because of the existence of money this formula needs to be changed to M-C-M and John Maynard Keynes agreed with Marx’s formulation because with money the possibility exists that people may hoard money as a form of wealth, breaking the circuit and leading to a potential crisis of overproduction and a general lack of effective demand. This is where Keynes’s emphasis on investment uncertainty came from. Today we have the additional factor that the means of global trade can be manipulated and as such continue to generate uncertainty. In the de-industrialised countries of the United Kingdom and United States this has tended to result in a growth of “rent extraction” or “rentierism” to make money.
Noted
But I will never accept the generalisations is right, and using its undermines the arguments we have for change. Wehave to do better than “all trade is bad” when plainly not in the eyes of most people. The word nuance exists for a reason.
@ Richard
Sorry I don’t believe that human beings can develop a “politics of care” unless they’re completely open to understanding three essential things – both market and state capitalism together with monetary system misunderstanding can all contribute to investment uncertainty.
I watched the podcast and really enjoyed it. The idea of a Common Sense think tank is long overdue, and I’ve ordered their book because it’s clear they’re bringing real intellectual discipline to questions that have been left to drift for far too long. I love the idealism — but I also found myself wishing that intellects of this calibre would turn their attention to the one issue that remains almost completely unaddressed: deprivation.
We have an enormous amount of statistical evidence on deprivation in the UK, and it all points in the same direction. The long‑term cost of deprivation — in lost productivity, poor health, early mortality, educational failure, criminal justice expenditure, and regional decline — is routinely estimated at well over £500 billion a year. That’s not a marginal problem. It’s the single biggest drag on the country’s economic and social potential.
Yet deprivation barely features in mainstream policy debate. It’s treated as background noise rather than the central structural failure it really is. If anything, it is the thread that runs through every crisis we face: stagnant growth, collapsing public services, labour shortages, regional inequality, and political disillusionment.
That’s why I’d love to see the Common Sense Policy Group turn their analytical firepower onto this. They’re already challenging orthodoxies on multipliers, investment and UBI. Applying the same rigour to deprivation — its causes, its costs, and the institutional reforms needed to dismantle it — would fill a gaping hole in UK policy thinking.
If we’re serious about national renewal, then confronting deprivation head‑on isn’t optional. It’s the missing piece in almost every conversation we’re having. PS I reckon deprivation could be fixed with an out lay of £100bn pa the vast majority of which would be recouped.
100% agree Paul, but the good (bad) news is that “deprivation” is upwardly mobile, and also globalising.
What I mean by that, is that locally, austerity is affecting the income, lifestyle, transport and healthcare of the middle classes. Even Guardian journalists.
By global, I mean that the actions of the USA, Israel, Russia, and big corporates and fossil fuel interests are causing so much havoc and instability in the Middle East, the whole of Africa, the Far East, the North Atlantic, Eastern Europe, Central Asia etc. that it impacts all of us – those wars and crises are no longer “far away” and people are getting nervous. Even Guardian leader writers.
So the middle class are affected and their representatives know that and are beginning to talk and write about it. Tardy hypocrites they may be, but even so, its an opportunity to feed their panic with practical solutions, mixed in with some moral challenge, and some restrained “I told you so!” lectures, but to play hardball at the same time, because these self-interested latecomers to the party, can’t be trusted.
I think UBI is an excellent idea if it can be made to work. The orthodox “raise taxes to enable spending” model seems politically impossible under that framework, making Modern Monetary Theory (MMT) a natural fit. However, I’ve noticed that UBI could paradoxically accelerate authoritarianism. This concern doesn’t stem from MMT or the principle of UBI itself.
A significant gap in the UBI conversation is the lack of private sector representation – see for example the “common sense group” constituents. Interestingly, one sector unusually supportive of UBI is the AI industry. According to them, AI will revolutionize the workplace, displacing millions of workers. The “good news,” they claim, is that these workers will have more time for leisure and self-fulfilment, thanks to a reasonable standard of living provided by UBI and Job Guarantee (JG).
Leaving aside debates on whether AI will deliver these outcomes, let’s assume it’s correct. AI is the first tool capable of “thinking” for itself, and it will likely replace many jobs, much like automation did in manufacturing. Already, entry-level roles in fields like computing, translation, and finance are being replaced by AI.
As AI displaces workers, particularly in white-collar jobs, traditional paths to economic mobility may close off. Unlike past technologies, AI can replace humans in complex cognitive tasks, N.B. “replacing” not “assisting”, meaning new opportunities will arise but they won’t be labour-intensive or accessible to the same broad workforce.
As more people are pushed onto UBI and JG due to a lack of job opportunities, a two-tier society will emerge: those on UBI/JG and those working in AI-driven sectors. The latter will have higher status and living standards. This divide will likely breed resentment and political tension, especially as the UBI/JG sector grows electorally significant. When they reach critical mass, they could vote for a government that radically reverses the technological paradigm.
AI regulation is essential to prevent this dystopian scenario. However, many AI tech giants align with right-wing politics, which opposes regulation. Long before the UBI/JG sector gains political power, or even realises it, the tech oligarchs and right-wing forces will work to suppress it potentially using authoritarian measures. This could lead to a scenario where democracy is undermined and authoritarianism takes hold.
Therefore, any discussion of UBI or JG must include serious conversations about AI regulation to ensure society doesn’t slide toward authoritarianism.
What is better. UBI/ JG or neither?
The question is real. UBI could accelerate authoritarianism if it is introduced into an economy where AI is controlled by monopolies and where labour has been structurally weakened. That is obvious.
The only answer is that UBI cannot happen in isolatiuon: regulation is not optional if UBI is to be safe. But I would go further. UBI without structural reforms becomes a subsidy to the owners of capital.
The necessary package is: anti-monopoly breakups, public control of key AI infrastructure (data/compute/cloud), strong labour rights, taxation of AI rents, and democratic constraints on surveillance. Without those, UBI can become the income policy of a managed, two-tier society — and that is an authoritarian trajectory.
Agreed, and it’s a worrying prospect, not so much for us in our later years, but definitely for our children and grandchildren if we fail to address this now.
By way of further addition to my post, I want to add that taxing automation in all its forms is essential. Bill Gates famously proposed this in 2017, though he wasn’t the first to do so, he was simply the most widely recognised figure to bring it to the forefront. Despite his immense wealth and influence, Gates has yet to take concrete action on the issue.
This tax on automation of course is not just about controlling inflation, but to address the economic displacement caused by automation: by replacing the permanent spending power lost when a human job is replaced by a machine.
Taxing automation appropriately might help stem the rush to replace people with machines. That said, a major challenge is global competition: firms may move operations abroad to countries without such restrictions, which makes international coordination crucial if automation taxes are to be effective.
There are a lot of moving parts to stopping this dystopian future.