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Finance Minister Orpo: UK's universal credit could be prime solution for Finland

Petteri Orpo says Finland's next experiment with alternative state benefit systems should try Britain's new universal credit on for size. The OECD recently made the same recommendation.

Petteri Orpo on March 23 Image: Jussi Nukari / Lehtikuva

Finland's Finance Minister Petteri Orpo wants the government to schedule a new trial that would experiment with replacing the current sprawling system of Finnish state benefits with the UK's universal credit.

The idea of universal credit was introduced in Britain in 2013 as a single benefit payment to replace six separate means-tested benefits such as jobseekers allowances, housing benefits and child tax credits.

Orpo referred to a February report from the Organisation for Economic Cooperation and Development (OECD), a club of 35 high-income countries, which says that the universal credit would be a more sensible solution for Finland than a universal basic income, another alternative that is currently being tried out on a small scale in Finland.

This week a working group studying rising inequality in Finland, led by professor Juho Saari, also determined that legislation should take steps to provide for a common minimal benefit level in Finland.

Proposes 2019 start

Orpo proposes that Finland launch a universal credit trial as soon as the universal basic income trial expires at the end of 2018. The centre-right National Coalition Party that he chairs has no interest in continuing the basic income experiment.

He says he would prefer to see the new trial start as soon as possible, so the next government will be able to arrive at some conclusions.

"Renewal of Finland's system of state benefits is the biggest task the next government will be entrusted with. A reform is absolutely necessary if we want to get rid of incentive traps and get people back into working life," the minister said.

Finland's Christian Democrat party had also previously suggested that Finland adopt the universal credit model.

MPs coming together

NCP MP Juhana Vartiainen said on Saturday that the parliamentary parties are starting to reach "a consensus of sorts" on reforms to state benefits, whereby the current "worn out and haphazard" system of state benefits would be consolidated into one payment.

"The Christian Democrats share this kind of thinking and the Social Democrats would prefer to go this route rather than in the direction of a gratuitous basic income," Vartiainen said.

In May 2016, the UK think-tank Resolution Foundation published a report showing that cuts to the universal credit meant the reform was ultimately unsuccessful in giving people an incentive to work.