The government has announced several measures aimed at providing financial support to citizens, including:
- A £650 Cost of Living payment for those on benefits, which will be given to over 8 million households who receive means-tested benefits, such as Universal Credit, Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit, and Pension Credit.
- A £150 Disability Cost of Living Payment for people with disabilities, who will receive an extra £150 to help with the extra costs they face, such as 6 million people who receive Disability Living Allowance, Personal Independence Payment, Attendance Allowance, Scottish Disability Benefits, Armed Forces Independence Payment, Constant Attendance Allowance and War Pension Mobility Supplement.
- A £1 billion Household Support Fund to help households who are not eligible for other forms of help or need further support with the cost of essentials such as food, clothing and utilities.
- A rise in National Insurance Contribution thresholds, which will increase to £12,570 from July 2022, helping 30 million working people across the UK keep more of what they earn before paying taxes.
- A reduction in National Insurance Contributions for lower-earning self-employed people, starting from April, which will mean that self-employed individuals will not pay Class 2 NICs on profits between the Small Profits Threshold and Lower Profits Limit, representing a tax cut worth up to £165 per year for around 500,000 self-employed people.
- A reduction in the Universal Credit taper rate from 63% to 55% and increasing work allowances by £500 per year from late 2021.
- A 12-month cut in the main rates of fuel duty for petrol and diesel of 5 pence per liter, which represents savings for consumers worth almost £2.4 billion over the next year.
- Freezing alcohol duty for the third year in a row, saving £3 billion over the next 5 years.
- Increasing the National Living Wage by 6.6% to £9.50 per hour for workers aged 23 and over from April 1st
- Launching the ‘Way to Work’ campaign to get 500,000 jobseekers into jobs by the end of June 2022.
- Increasing skills funding by £3.8 billion over the parliament, as announced at Spending Review 2021.
All of these measures are on top of the existing efforts made by the government to help people get into work and make sure work pays.
The government should give £10,000 to every citizen under 55, a report from the Royal Society for the encouragement of the Arts, Manufactures and Commerce (RSA) suggests. The report states that the payments, which would come in the form of two £5,000 dividends paid over two years, would be aimed at helping UK citizens navigate the challenges of the 2020s, including job loss due to automation, the effects of climate change and balancing employment with social care.
The proposal, which would be funded by a British sovereign wealth fund, would also see certain state benefits and tax reliefs removed at the same time. This is to compensate workers for changes in the job market.
The RSA suggests that the fund would be built from public debt, levies on untaxed corporate assets, and investments in long-term infrastructure projects, similar to Norway’s $1 trillion sovereign wealth fund.
The savings for the government could also be invested into the fund.
A Government spokesperson said that providing a universal basic income would not allow for the same targeted support that is tailored to meet individual needs, however, Labour Party stated they are looking into similar arguments for a Universal Basic Income (UBI).
The RSA report also suggests options for funding a full UBI, such as a tax on wealth, levies on companies’ assets, and a tax on tech firms – such as Amazon, Facebook and Apple – using or transferring people’s data.
It is worth noting that the RSA’s proposal would come with a cost, estimated at £14.5bn per year if fully subscribed and a total of £462bn over 13 years, more than half of which would be paid for by government savings.
Additionally, 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.
It is also worth mentioning that universal basic income is not a new concept and has been explored in other countries. For example, Alaska has been providing all residents with a yearly cash dividend from the Alaska Permanent Fund since 1982, and Finland is currently half way through a two year nationwide pilot scheme, giving 2,000 unemployed Finns a monthly unconditional payment. Scotland is also considering piloting UBI schemes in Glasgow, Edinburgh, Fife and North Ayrshire.
All in all, RSA’s report raises important questions about the future of work and the long-term challenges the country might face, including how to ensure automation and the changing nature of work deliver a fairer, more prosperous society.
It’s important to note that universal basic income is a complex topic with many potential implications and trade-offs, including the cost of such a program, the economic effects on the labor market, and the way the program would be financed. Some of the criticisms include, it could be inflationary, and it could discourage work and decrease productivity. Furthermore, the RSA report raises several questions and considerations that would need to be addressed before implementing such a program in the UK, such as how it would be financed and how it would interact with other existing social safety net programs.
It’s also worth mentioning that Universal basic income is not a panacea for all the economic and social issues, it could provide a cushion for those affected by changes in the labor market, but it wouldn’t solve issues such as poverty, wealth inequality, lack of affordable housing and healthcare and so on.
As it is still a proposal and a report, it is up to the government and the society to discuss, debate and consider the pros and cons of Universal Basic Income and its feasibility before any actions are taken.
Our overall support package includes:
Help with energy bills
The Government has announced a £15 billion energy bill rebate package, which will provide financial assistance to around 28 million households in Great Britain. The Energy Bill Support Scheme will provide all domestic energy customers with a £400 grant to help cover the cost of their energy bills. This grant will not have to be paid back. In addition, households that are liable for Council Tax in Bands A-D in England will receive a £150 Council Tax Rebate to help with the rising cost of bills, which has already begun to be paid. This support will be available to households in England, Scotland, and Wales and equivalent support will be provided to households in Northern Ireland.
£650 Cost of Living payment for those on benefits
The Government will provide a £650 Cost of Living payment to more than 8 million households that receive means-tested benefits, including all households who receive Universal Credit, Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit, and Pension Credit. These payments will be made in two lump sums, with the first one being issued in July, and the second one in the autumn. The payments for those who only receive Tax Credits will be made shortly after, to ensure that there are no duplicate payments. The government will make these payments directly to households across the UK.