I WAS encouraged – a little – to read in The National on Friday that UBI is being seriously considered (£20bn universal basic income recovery scheme is workable and affordable, says LSE report, May 1) because it signals a step change from worn-out, discredited ideology. If Scotland (and indeed the rUK) is to break its dismal record of poor productivity and under-achievement it is time to consider new approaches rather than slavishly following ideological purity.

Simply continuing along the well-trodden path of tinkering with the economy does not address the fundamental weakness of Scotland’s and the rUK’s economy, nor does it improve productivity. This is because government subsidies and incentives to business – the traditional policy mechanism – have been focused on increasing supply while productive business investment actually depends primarily on increasing demand.

READ MORE: £20 billion universal basic income recovery scheme workable, says report

Without increasing demand, extra revenues from a corporation tax cut will go to shareholders through buybacks and dividends, not to improving the wealth and wellbeing of the majority of the population.

For example, in the first six weeks after Trump’s massive tax cuts in the USA, US companies announced a record $171 billion of share buybacks – more than twice the already high level in the whole of the prior year. It was basically a wasted opportunity that just drove the US deeper into debt.

What needs to be understood and accepted is that the historic underperformance of the economy and the poor productivity is not because of a lack of supply but a lack of demand – driven by inequality of incomes and no or low wage growth.

READ MORE: Mhairi Black: We need a universal basic income to solve this crisis

Both the OECD and the IMF have concluded that increasing income inequality is bad for economic growth. The IMF found that if the income share of the top 20% increases by one percentage point, GDP growth is 0.8 percentage points lower in the following five years – ie the benefits do NOT trickle down. Conversely, a similar increase in the bottom 20% produces a 0.38 percentage point higher growth.

The OECD likewise found that rising inequality over the last two decades dragged growth down by 0.35 percentage points – producing a cumulative loss of 8.5% over 25 years.

The key to increasing business investment is increasing household incomes – and increasing business investment is crucial to economic growth. A universal basic income would provide an underpinning to an increase in demand.

And productivity? Technological change has driven the increase in productivity since the Industrial Revolution. Investing in the ability of people to create and use new technology represents the best way to increase aggregate demand. It is also the best way to increase productivity. So programmes to support life-long learning and upskilling are an essential ingredient of economic growth.

While I have no doubt that there is no chance of UBI in Scotland while it is controlled by Westminster, a more agile and innovative independent Scotland could and should implement this policy and join the club of the 10 wealthiest nations in the world per capita (who, incidentally, are all smaller than or of a similar size to Scotland).

David Cairns
Finavon

WE really need to stop this current fixation with UBI (Mhairi Black: We need UBI to tackle crisis, May 2). UBI is often presented in overly simplistic terms and partially justified, as it is in Mhairi’s column, with the job-destroying technology myth “artificial intelligence has grown in ability and threatens many jobs in the future”.

We need to accept that UBI is complex and will not be introduced in the near future; it will NOT allow everyone to “ensure they can house, heat and feed themselves”. Scotland cannot introduce UBI unilaterally, as Nicola Sturgeon has already made clear. It is not and never will be a panacea and if we allow this Tory government to hijack it and introduce their form of UBI, it will simply be another Universal Credit/Minimum Wage/Living Wage debacle.

This crisis has a long way to go, but we have already had Andrea Leadsom stating we need to “incentivise the wealth-creators” (she didn’t mean workers) to drive the Great British economy to new heights. Other Tory MPs and profiteering business people have made similar allusions. It is clear who the Tories will protect and who they will tax.

So, I’m afraid it’s time for SNP members to put UBI on the back burner and instead prove our competence by concentrating on, and succeeding in dealing with, the crisis at hand. In the near future we need to get political by exposing the incompetence and lies of the UK Government and again making the case for an independent Scotland.

Eddie McKinney
Edinburgh

MY thanks to David Mundell for providing us with a much-needed laugh in these difficult times. All credit to Fluffy for serving up a bit of top-notch entertainment and helping to further the cause of independence at the same time.

Mo Maclean
Glasgow