Basic Income Conversation have teamed up with London Solidarity Fund Federation to launch the pilot which will give 150 people one-off payments of £50 to as a starting point to test out the impact of distributing cash unconditionally.
Both the Scottish and Welsh governments have signalled their intention to develop basic income pilots in recent months but support for the idea has been cooler in Westminster.
Basic Income Conversation co-founder Cleo Goodman told The Big Issue the grassroots project is intended to show the benefits a basic income could bring at a larger scale.
“This is the first project of its kind that we are aware of in the UK. This pilot is about demonstrating the impact a basic income could have,” said Goodman.
“We are sending a message that without the security of a basic income, many people are unable to work, unable to feed their families.
“It is tied to the universal credit cut quite specifically because the people that are currently claiming from the solidarity fund are often also claiming universal credit and they’re going to be hit by £20 pound per week out of their pocket so that’s why we want to work with the funds now.”
The London Solidarity Fund Federation is a coalition of mutual aid groups as well as community and solidarity funds that launched to redistribute wealth as the pandemic kicked in last year.
Basic Income Conversation has targeted the group, which operates in different London boroughs including Brent, Newham and Lambeth, as the perfect testing ground for a basic income to create a minimum income floor.
People who apply to the solidarity fund will be eligible for the payments and will not be required to prove how they will spend the cash
Crowdfunding is due to start this week ahead of the £20 cut to universal credit at the beginning of October as well as the national insurance tax hike. The New Economics Foundation estimates that 2.5 million households could be hit by both and lose up to £1,290 a year.
The pressure on household finances will also intensify due to rising energy costs with the energy price cap increasing by £139 in October while wholesale gas prices are pushing smaller energy firms out of business. The ongoing crisis could see energy costs rise further in future.
The backdrop of a difficult winter means now is the perfect time to distribute cash through a basic income, according to Goodman.
“While the universal credit uplift is stripping people of £20 a week from the end of September, we’re proud to be working with communities to put a bit of extra cash in people’s pockets,” she said.
“We hope this pilot will demonstrate the impact a basic income could have on people’s lives – and encourage others to take action so we can guarantee financial security for all citizens.”
Welsh first minister Mark Drakeford recently outlined his plans to focus on care leavers for the country’s basic income pilot. Speaking at August’s Basic Income Earth Network Congress, Drakeford said a basic income will allow care leavers to make decisions on their future without worrying about food or a place to stay.
“That [income] will undoubtedly have the impact of raising the incomes available to those young people and in the way that our Wellbeing of Future Generations Act tells us we must on the journey to a more equal Wales,” said Drakeford in his address.
Shona Robison, co-chair and social justice secretary for Scotland, said: “We are committed to progressing the delivery of a minimum income guarantee, which could be revolutionary in our fight against poverty.”