A human and a humanoid robot standing side by side at sunrise overlooking a futuristic city skyline, symbolising balance between technology and humanity in the age of automation.
Economics, Future of Work, Politics & Governance, Society & Ethics

Universal Basic Income and the Fourth Industrial Revolution: A Call to Act Before It’s Too Late

Opening Insight

The Fourth Industrial Revolution is not coming. It is already here. Artificial intelligence, robotics, and automation are changing industries faster than policy or ethics can keep up. Yet many political leaders still cling to the idea that workers will simply “find new jobs,” as they did in earlier industrial eras. This time, the scale and speed are different. Machines are no longer limited to repetitive tasks. They can now learn, adapt, and even create. The real question is not whether AI and robots will transform work. It is whether our societies can adapt quickly enough to protect human dignity, democracy, and freedom.

This is not the first time I have written about this subject, but it remains one I feel deeply passionate about. We need greater honesty from political and business leaders about where this industrial revolution could take us, and what it means for ordinary people.

The Shifting Nature of Work

Across OECD countries, around 27% of jobs are in occupations at high risk of automation McKinsey predicts that by 2030, between 400 million and 800 million people worldwide may need to change occupations due to automation. Looking further ahead, robotics is expected to handle more skilled trades, such as plumbing, electrical work, and construction, possibly as early as 2035. Some forecasts place this change closer to 2040 or 2050. Time will tell, but what matters is that we prepare.

While predictions vary, the direction is clear. Automation and AI are steadily reducing the share of human labour in production. The consequences are structural, not temporary. Fewer wages mean more capital accumulation at the top unless we redesign how value is shared.

Why Universal Basic Income Matters Now

Universal Basic Income (UBI) is often dismissed as utopian. In truth, it is a practical response to an economy where traditional full employment can no longer be taken for granted. The idea dates back to Thomas Paine’s 1797 plan for redistributing land value and re-emerged through economists such as Milton Friedman and Juliet Rhys-Williams. Today, it has new relevance as work itself changes.

A real UBI, set at a livable income for every adult, would simplify tax and welfare systems, eliminate stigma, and help people live with dignity. It would not remove ambition or purpose. It would make them possible again.

Funding the Future: Robot, AI, and Finite Resource Taxes

The challenge is funding. Critics say a true UBI is too expensive. They are right if we expect a 20th-century tax system to fund a 21st-century society. It will not work.

Robot and AI Tax: As automation grows, companies will save billions by reducing wage costs. A moderate levy on this automation dividend, similar in scale to payroll taxes once paid for human workers, could return part of that value to society. Even a small 1 to 3 percent automation levy, scaled internationally, could provide significant revenue once robots become widespread. Whether such a levy must be international to work remains open to debate, as national or regional versions might avoid concerns about sovereignty and global governance that some would find contentious.

Finite Resource Tax: Consumerism and industrial growth continue to drain the planet’s finite natural resources. A finite resource tax would capture economic rent from extraction and direct it toward sustainability and social programs. The World Bank and the International Institute for Sustainable Development both argue that resource-rent taxation is a fair and efficient way to share the wealth of the planet. This approach links environmental responsibility with economic fairness.

Together, these taxes create a stable foundation for a UBI that reflects the realities of automation, resource depletion, and climate change.

Lessons from Around the World

  • Finland’s 2017–2018 UBI trial gave 2,000 unemployed citizens €560 per month. Results showed better wellbeing, lower stress, and a small rise in employment.
  • Canada’s Guaranteed Livable Basic Income (GLBI) bill proposes a national framework for guaranteed income, though the details and funding remain under discussion.
  • The UK’s Liberal Democrats endorsed UBI in 2020, but the 2023 explainer leaned toward a household-based Guaranteed Basic Income through Universal Credit. As a Liberal Democrat myself, I want the party to return to its original promise: a universal, individual payment at a livable level. Anything less risks leaving people behind.

The Changing Shape of Government Revenue

As automation expands, governments face a structural decline in tax receipts from work. Fewer employees mean less income tax and lower national insurance contributions, while corporate profits rise through productivity gains. Unless the tax base evolves, treasuries will shrink at the very moment social spending must rise to support displaced workers.

Trying to fill that gap by increasing taxes on low and middle earners would deepen social division and fuel resentment. It would punish the very people automation is leaving behind. The solution lies in redesigning the tax architecture, not simply raising existing rates.

A fair system must move the weight of taxation away from labour and consumption and toward capital, automation profits, and finite-resource rents. Governments need to start that transition now, before the fiscal erosion becomes irreversible. Otherwise, nations risk the worst of both worlds: collapsing revenues and rising inequality.

A Realistic UK Cost and Funding Framework

Determining a fair and sustainable Universal Basic Income is complex, but it begins with honesty about what counts as a livable income. According to the UK Living Wage Foundation (2024), the real living wage is £12.00 per hour across the UK and £13.15 in London. For a 37.5-hour work week, this equates to roughly £23,000 to £25,000 per year. Any genuine UBI must therefore aim for a baseline near £24,000 per adult per year, not the often-quoted £12,000 figure.

With an adult population of around 53 million (ONS, 2023), this would amount to an annual gross cost of approximately £1.27 trillion. Savings from ending most means-tested benefits and personal tax allowances could free up about £150 billion, leaving a funding requirement of around £1.12 trillion per year.

That sounds enormous because it is, yet it is not impossible. The key is to redesign the tax base to match a post-labour economy. UBI should not be taxed because it represents the social floor, the income that guarantees survival and dignity. Instead, taxation should apply to income and profits above that threshold, focusing on capital gains, automation dividends, finite resource rents, and pollution fees.

Why UBI Should Not Be Taxed

Treating UBI as taxable income defeats its purpose. It is designed to secure a minimum standard of living, not to be clawed back through the same outdated tax system that created inequality in the first place. In a post-labour economy, the state should collect revenue from surplus value, not subsistence. This means taxing profits, automation, and capital accumulation while leaving the basic income intact.

If governments continue to rely on the 20th-century model that taxes labour, they will struggle to maintain revenue as automation accelerates. Over time, fewer people will be in full-time employment, and those who are will shoulder an unsustainable fiscal burden unless the tax structure evolves.

Transitional Funding Before Automation Scales

In the early years, before automation and resource taxes produce substantial revenue, governments can balance the system through a combination of established and new fiscal tools. These include:

  • Phasing out inefficient tax reliefs and allowances
  • Introducing a carbon fee and dividend system
  • Modest capital and excess-profit taxes
  • Limited bridging finance, such as a temporary high-income surtax or social dividend bond

These steps create breathing room for governments while the new revenue structures mature. Transparency and sunset clauses ensure that temporary measures do not become permanent burdens.

The Changing Shape of Government Revenue

As automation expands, governments face a structural decline in tax receipts from work. Fewer employees mean less income tax and lower national insurance contributions, while corporate profits rise through productivity gains. Unless the tax base evolves, treasuries will shrink at the very moment social spending must rise to support displaced workers.

Trying to fill that gap by increasing taxes on low and middle earners would deepen social division and fuel resentment. It would punish the very people automation is leaving behind. The solution lies in redesigning the tax architecture, not simply raising existing rates.

A fair system must move the weight of taxation away from labour and consumption and toward capital, automation profits, and finite-resource rents. Governments need to start that transition now, before the fiscal erosion becomes irreversible. Otherwise, nations risk the worst of both worlds: collapsing revenues and rising inequality.

The Role of Automation and AI Levies

As automation expands, companies will see significant long-term savings in labour costs. Those savings form the foundation for a fair contribution back to society. The automation and AI levy described earlier would begin at a modest level and grow gradually as adoption increases.

By linking this levy to measurable productivity gains and labour displacement, governments can ensure that it remains proportionate and evidence-based. It should evolve into a major funding source over time, helping to sustain Universal Basic Income once automation becomes the dominant form of production.

Governments must act now because job losses are already eroding tax receipts from income and national insurance. Trying to compensate by raising taxes on low and middle earners would only deepen inequality and weaken democracy. Redirecting taxation toward capital, automation, and resource rents is the only sustainable path to preserving both prosperity and social stability.

Preparing for the Nimble-Machine Era

By 2035, robots could begin performing tasks that today still require human hands. By 2050, they may repair homes, maintain infrastructure, and manage logistics almost independently. This does not mean the end of human value. It means a shift in focus. People can devote more energy to creativity, learning, care, and innovation, but only if they have capital to live on. UBI ensures that opportunity is not a privilege.

Democracy, Capitalism, and Corporate Power

If wealth from automation continues to flow only upward, democracy will suffer. Global inequality is already at levels unseen since the early industrial age. When citizens cannot afford to participate, democracy loses its base. Disengagement breeds instability, and instability invites authoritarianism.

The growing power of corporations, strengthened by decades of deregulation and political neglect, must be checked. Democratically elected governments must lead this transition, not multinational companies. A well-designed UBI and resource tax system would help restore that balance.

Bias and Evidence

Every study and dataset on UBI carries bias. Some focus on wellbeing and fairness, others on cost and incentives. Both perspectives are useful. This article draws on sources across the spectrum, from Third Way’s cost analysis to Stanford’s review of benefits. The goal is transparency, not partisanship.

My own position is clear. As a Liberal Democrat, I believe freedom and fairness are inseparable. Freedom means having enough to live and grow. Fairness means ensuring that automation and resource wealth benefit everyone, not just shareholders.

A Finite Planet and an Expanding Horizon

A finite resource tax recognises that our planet’s limits are real. Yet humanity’s story does not stop here. Investment in space exploration is not escapism. It is foresight. As resources become scarcer, space will offer access to new materials and energy sources. Private enterprise, working in partnership with national and international space agencies, should lead this next chapter of progress.

The Call to Act Now

This is not a pessimistic vision. It is a practical one. We can create a society where technology empowers rather than excludes. Where automation liberates rather than impoverishes. But we must act before the divide between the wealthy and everyone else becomes irreversible.

The conversation must begin now, not in 2030 or 2040. Governments, businesses, and citizens need to work together to design the post-work economy while democracy still has time to adapt. Waiting risks a world governed not by elected representatives but by algorithms and profit motives.

What Needs to Happen

  1. Governments should commission automation and resource-tax studies and launch transparent UBI pilots.
  2. Corporations should recognise their long-term interest in stable societies and fair redistribution.
  3. Political parties must commit to a real, livable UBI.
  4. Citizens should demand honesty about automation’s impact and participate in shaping this future.

Reclaiming the Future

The Fourth Industrial Revolution offers a choice: technology that frees humanity or divides it. Universal Basic Income, supported by robot and resource taxes, is not charity. It is a new form of balance between human and machine, labour and capital, consumption and sustainability.

If we start preparing now, we can protect the principles that define the West, democracy, freedom, and compassion within capitalism, before they are lost to complacency and unchecked corporate power.

The time for waiting has passed. The time for action and courage is now.

References

Disclaimer

The views expressed in this article are my own and do not represent the opinions or policies of any organization, company, or entity with which I am affiliated.

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