We Need A Temporary Universal Basic Income

I awoke this morning to news that the Bank of England is going to pump 100 Billion pounds into the British economy. This is known as quantitative easing. It is a tool used when economic times are tough and it helps stimulate spending. The banks make this money available to people as loans and this can help make the economy grow. However, the system leads the people to be riddled with debt that they may struggle to afford to pay back. Furthermore, there are serious consequences to QE: it increases the prices of bonds, shares and properties. This only benefits the people who already have purchased these things so it makes it harder for the average earner to become a homeowner or a shareholder.

If the government wants quantitative easing to help ordinary people who are low and middle income earners then they should use QE to provide a universal basic income for every adult in the UK. Instead of the banks and the wealthy profiting from quantitative easing a universal basic income would mean that everyone adult in the UK could afford to buy food and heat their homes during these worrying times of the Coronavirus pandemic

If every adult in the UK was given £1000 pound a month on top of their existing income for six months with no strings attached then people would have more money to help boost the economy when businesses reopen. Everyone could make a collective effort to stimulate and grow the economy which would create jobs and make life return back to normal as quickly as possible.

During this current crisis Universal Basic Income would protect the vulnerable and help grow the economy. The size of British economy has shrunk 20% since the pandemic. Therefore we need to do something drastic to help give it the boost it desperately needs.

It would cost £300 billion to provide 50 million adults in the UK with a universal basic income of £1000 a month for six months. Whilst this figure does seem high and unrealistic we need to take into account that the UK has spent £645 billion on quantitative easing since 2009. If the people were given the money directly instead of it being given to the banks then everyone in society would prosper not just those who would be eligible for the QE loans.

To help pay for this the government could increase vat from 20% to 30%. This would ensure that those spending the money on essential items like food would not be subject to the tax, while those spending it on luxury items would pay the higher rate of vat therefore generating more money for the British government. We already print billions of pounds to give to the banks. Why not give the money to the people of Britain instead?