Ross Clark Ross Clark

Finland’s Universal Basic Income experiment falls flat

Should governments abolish their welfare states and replace them with a Universal Basic Income (UBI), paid to everyone, even billionaires, regardless of means? Such payments would be designed to cover essential living costs, leaving individuals free to make the choice of whether they wished to work in order to gain themselves a better lifestyle.

It is an idea which until yesterday seemed to be in the ascendant. Bernie Sanders has advocated it. John McDonnell has launched a study to determine whether it should become Labour policy. It hasn’t just attracted the Left – Elon Musk and Mark Zuckerberg have declared themselves in favour, seeing a UBI as a means of softening the mass job losses they expect as a result of technological advance. It has attracted some British Conservatives, too – Alan Duncan wrote a book advocating it as long ago as the 1990s.

One country even put the idea into practice – Finland. In 2016, 2000 unemployed Finns were put onto a trial of UBI in which they were paid 560 Euros (£490) a month, with no strings attached. They didn’t have to prove they were looking for work, and if they did find work they were allowed to carry on receiving the money.

Yesterday, however, the experiment came to a shuddering halt. The Finnish government announced that it is not going to extend the scheme. In a blow which will be felt especially by the British Labour party, it announced that it was instead looking at a welfare system based on Britain’s Universal Credit – which to McDonnell and others has become a byword for social injustice.

So what went wrong with the dream? The Finns have abandoned the experiment simply out of cost.

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