A Labour minister has indicated that the government may need to introduce a universal basic income system to help society cope with the disruptive impact of artificial intelligence on employment, despite previous international trials showing mixed results.
Finnish Experiment Shows Limited Employment Impact
Lord Stockwood, a former technology entrepreneur and Labour minister, has revealed that discussions are taking place within Whitehall about implementing measures to cushion the blow for workers most affected by what he described as the "bumpy" introduction of AI technology. He warned that artificial intelligence could potentially rock the foundations of society through widespread job displacement.
Universal basic income, where individuals receive regular payments regardless of employment status without means testing, is not currently government policy. However, Lord Stockwood suggested there would need to be "some sort of concessionary arrangement with jobs that go immediately" as AI transforms the workplace.
Historical Evidence from Finland
The concept of universal basic income was tested in a landmark Finnish experiment between January 2017 and December 2018, where 2,000 randomly selected unemployed individuals received a monthly payment of €560 (approximately £490). This payment came with no obligation to seek employment and no reduction if participants accepted work.
The comprehensive study ultimately found that this no-strings-attached approach did not significantly improve employment levels. Participants worked only six more days on average over a one-year period compared to a control group of 5,000 people who continued receiving traditional benefits.
Kari Hämäläinen of Finland's VATT Institute of Economic Research noted that the basic income had only a "small" effect on employment levels, suggesting that for many people, "the problems related to finding employment are not related to bureaucracy or to financial incentives."
Wellbeing Benefits Despite Employment Results
Despite the limited impact on employment, researchers discovered significant wellbeing benefits among participants in the Finnish trial. Those receiving the guaranteed income reported being "more satisfied with their lives" and experienced "less mental strain, depression, sadness and loneliness" than the control group.
Lead researcher Minna Ylikanno from Finland's welfare authority Kela concluded after the first year that "the recipients of a basic income had less stress symptoms as well as less difficulties to concentrate and less health problems than the control group." Participants also demonstrated increased trust in others and social institutions, along with greater confidence in their future prospects.
Growing AI Concerns Prompt Policy Rethink
The renewed interest in universal basic income comes amid growing concerns about artificial intelligence's potential to disrupt employment markets. Dario Amodei, co-founder and chief executive of Anthropic, the company behind the Claude chatbot, recently warned that "humanity is about to be handed almost unimaginable power, and it is deeply unclear whether our social, political, and technological systems possess the maturity to wield it."
Amodei has previously suggested that AI could displace approximately half of all entry-level white collar jobs by the end of this decade, adding urgency to discussions about social safety nets.
Government's AI Strategy and Training Initiatives
The British government has ambitious plans to position the UK as the fastest adopter of AI technology among G7 nations. Ministers recently unveiled proposals for free AI training to be offered to every adult across the country, backed by a panel of experts from business and trade unions.
Technology Secretary Liz Kendall emphasised the government's approach, stating: "We want AI to work for Britain, and that means ensuring Britons can work with AI. Change is inevitable, but the consequences of change are not. We will protect people from the risks of AI while ensuring everyone can share in its benefits."
Lord Stockwood expanded on the necessary policy response, telling the Financial Times: "Undoubtedly we're going to have to think really carefully about how we soft-land those industries that go away, so some sort of UBI, some sort of life-long learning mechanism as well so people can retrain."
International Precedents and Challenges
Similar basic income schemes have been trialled in various countries including Kenya, Canada, India, and parts of the United States. However, implementing such systems presents significant financial challenges. The Helsinki government allocated €20 million (approximately £17 million) to its two-year trial, and researchers have questioned the sustainability of nationwide implementation.
In 2016, Swiss voters overwhelmingly rejected a proposal to introduce a guaranteed basic income for all citizens, with 77 percent opposing the plan in a national referendum. Campaigners had argued that such a system would recognise and value unpaid work in care, domestic, and community settings.
Advocates of universal basic income continue to argue that the system reduces bureaucratic complexity and enables greater flexibility in the labour market, as people feel more secure taking temporary or part-time positions without risking benefit reductions.
