Is Wales moving further towards a Universal Basic Income?

Watch the video report by ITV Work and Economy Correspondent Carole Green

A group of organisations and campaigners have written to the First Minister calling for the pilot scheme looking at providing a Universal Basic Income to be expanded, but questions remain over the affordability of any such project.

A universal basic income (UBI) is where a government pays every individual a set salary, regardless of their means. 

Earlier this year, The Welsh Government said it was interested in developing a small pilot, potentially involving people leaving care. 

However, signatories of the open letter including the Future Generations Commissioner Sophie Howe, UBI Lab Cymru and Chwarae Teg say that while care leavers need more support, they are concerned that confining the pilot to a particular group will not provide the evidence needed to understand the impacts of a basic income for all.

How would a Universal Basic Income work in Wales?

Sophie Howe said furlough ending this September along with an end to the Universal Credit pandemic top-up of £20 a week were yet more signs that the current systems of welfare and work are not fit for purpose. 

She said: “It's time to accept the system is broken and without a stronger safety net, generations to come will be left with a legacy of deprivation.  

“UBI could protect not just those hit hard by Covid but every one of us from other shocks to come – like the climate emergency that’s going to cause more devastation via extreme weather like heatwaves and floods. 

“Keeping people well means doing new things to tackle poverty, and Welsh Government has to take this chance now to use the Well-being of Future Generations Act to properly test how a UBI can change lives.” 

The open letter calls for the Welsh Government to run a wide-ranging ‘Care Leavers Plus’ pilot, to include children, the employed, the unemployed and pensioners, as well as care leavers.  

A wider pilot could collect evidence on how the policy would impact Wales as a whole, by testing the effect on educational attainment, for example. Wales has the highest rate of child poverty in the UK. 

A Welsh Government spokesperson said: “We have closely followed the progress of pilots around the world with interest and believe there is an opportunity to test a version in Wales.

"We understand the excitement and the interest around this policy however it is important that we get it right - there is more work to be done in this area but we are interested in developing a version, potentially first involving people leaving care.

 “We will be listening to key stakeholders as we build the model and we are already working alongside the Future Generation Commissioner’s office.”

Critics argue that a Universal Basic Income would encourage people not to work, lead to a slowing down of the economy on top of the cost of funding such a scheme.

In June, the Conservative MS Janet Finch Saunders said the scheme would not alleviate poverty.

“Means-testing is of fundamental importance to the integrity of our welfare state, unlike UBI", she said, "which would incidentally reward the wealthiest in society instead of targeting those who need it most.

“The Welsh Government must focus on the problems facing large swathes of the public by creating more jobs and levelling-up the whole of Wales.”

However, Phillip Easton from Penrhiwceiber in Rhondda Cynon Taf said UBI would be ‘life-changing’ for people in his area. 

During lockdowns, the 41-year-old's business, Pip’s Real Hot Chocolate, could no longer supply to events or cafés and Phillip, who didn’t qualify for Universal Credit, struggled to pay his mortgage and for food, using the last of his savings, and grants.

Phillip suffered a stroke six years ago which left him with brain damage meaning he finds paperwork difficult and says an automatic, guaranteed payment would make a huge difference during economic uncertainty.

Phillip said: “If my area was chosen for the pilot, then those children who live in the worst poverty in Wales would have money in their families that they never dreamed of.  

 “We have pride. We don’t want charity. But some things that can be taken for granted aren’t a priority. We can give our houses and shops a fresh coat of paint, and the hidden broken things can be repaired - all by other local businesses, keeping the local economy moving. 

“Money isn’t meant to be stored in banks - it’s meant to move.  

“UBI isn't about giving people money, it’s about giving them opportunities. Opportunities for a better home life, better mental health, more time to do the things that make somewhere a place people want to live in.”  

According to the World Health Organisation, poverty is the single largest determinant of health, and ill health is an obstacle to social and economic development. This means poorer people tend to live shorter lives and have poorer health than affluent people.