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by Hefin Gwilym David Beck and Sara Closs-Davies
9th May 2022

The Welsh Universal Basic Income (UBI) pilot is an opportunity to give a real contribution to the international debate on UBI which has been raging ever more so because of the COVID-19 pandemic.

The pilot, which starts in a few months, has been spearheaded by the Welsh First Minister Mark Drakeford and builds upon a Senedd pledge made by a cross-party group of 25 MSs following work encouraged by the UBILab Network. This pledge has also been supported by the Welsh Future Generations Commissioner Sophie Howe, charged with ensuring that every public decision taken in Wales considers the future impact on society. A UBI is a regular cash payment given without conditions and is not means-tested. In this article we assess how a UBI can guarantee the prosperity of future generations in Wales, and why this is socially and economically important for the UK and the rest of the world. It is written while we prepare our new book on Universal Basic Income, to be published next year.

The COVID-19 pandemic forced a rethink about what ‘social security’ means and its effectiveness, initiated by discussions about furlough and unemployment, and initiatives in countries like Spain where a limited form of UBI was introduced. But UBI is not a new approach to social security – it has been discussed for centuries. Its roots reach back at least to the 18th century, when it was supported by commentators including Thomas Paine (1797) who advocated for an ‘agrarian justice’, and later by Bertrand Russell in his essay In Praise of Idleness. Before this, ideas of how society could flourish were discussed by Sir Thomas More in his 1551 book Utopia, a place where wealth, prosperity and the fruits of life were shared. More recently an UBI was discussed by Nobel laureates such as Muhammad Yunus, Desmond Tutu, Amartya Sen and Milton Friedman. The idea also captivated Martin Luther King in arguing for economic justice through a guaranteed income and, currently, academics such as Guy Standing, Malcolm Torry and Rutger Bregman.

For different reasons, UBI is of interest across the political spectrum too. UBI unites divergent political ideologies since it creates freedom and equality, reduces bureaucracy and associated costs, and keeps the wheels of capitalism turning. It addresses the issues of the precarious nature of job insecurity and the gig economy which is of concern to the left, and the advancement of digitalisation which is of concern to the right. Each new pilot of UBI adds to the discussion as each works in its own unique way. But what might the Welsh pilot tell us and what lessons might be learned for the UK and other countries?

The Welsh UBI pilot involves 18-year-old care leavers which is an extremely narrow section of the Welsh population. Up to 500 care leavers are to be given £1,600 monthly for 24 months. The proposal set out by the Welsh government reflects the most generous UBI payments to date of all pilots across the world. There is also a delicate balance to maintain between the UBI payment and other means-tested benefits, as one may affect the other. These conditions seem at odds with the principle of a genuine UBI as ‘non-taxable income’. The pilot will cost the Welsh government £20 million over two years. If the pilot was adopted for the whole of Wales and paid to every adult and child, as many advocates of UBI believe it should, the cost would be much higher.

We believe the Welsh UBI pilot will likely confirm existing positive findings about the UBI, including that it makes people healthier and happier, as data from other pilots have shown that people spend UBI cash wisely on food, education, paying off debts or increasing their employment opportunities. A guaranteed income has been proven to reduce income volatility and increase mental and physical stability.

However, as the Welsh UBI pilot is highly concentrated on one single cohort of care leavers, what we already know is that the wider economic impacts of a UBI will not be evidenced. Unfortunately, this pilot will say considerably less about how a UBI might generate prosperity within a community such as a village, town or city if all the people living there were given the UBI opportunity. So, there is scope for micro-piloting as has been proposed by the UBILab Network. Thus, although a serious and positive first step, the findings from this Welsh pilot should bear fruit for another stage of piloting and opening the door to further research in this area.

Similar to the work underway in Wales, reflective efforts have now begun on a Northern Ireland UBI pledge, encouraging Assembly Members to commit to supporting a UBI pilot. This has so far attracted signatures of 50 AM candidates. In 2021, 108 MSP candidates from Scotland also pledged their support for a UBI pilot to support the people of Scotland. With recent promises of more pilots across Europe, momentum for a UBI is clearly building, and our hope is that the combined evidence from these varied pilots will eventually lead to a large-scale national implementation of UBI.

Hefin Gwilym has been lecturer in social policy in the school of history, law and social sciences at Bangor University since 2012. He has published numerous peer-reviewed articles in academic journals and was joint editor of Social Policy for Welfare Practice in Wales (BASW 2021). He teaches on social policy modules at undergraduate and postgraduate levels at Bangor and supervises PhD students in social policy in areas including food banking, carers’ resilience and the link between social welfare and public transport in Wales.

Dave Beck is a lecturer in social policy at the University of Salford. Dave’s primary focus is concerned with examining how (food) poverty, food banks and other emergency food aid organisations shape our society. Dave’s research work addresses the sociopolitical influence of neoliberalism and how changing welfare policies create and influence interaction between people and their communities, and what this means for people’s ability to provide food for themselves and their families.

Sara Closs-Davies is a Fellow member of the Association of Chartered and Certified Accountants (ACCA) and member of the Chartered Institute of Taxation (CIOT). She is a lecturer in accounting and taxation at Bangor Business School, Bangor University, and an active researcher focusing on the real-life implications of tax and welfare policy on citizens, civil servants, society and social inequality, and on the effectiveness of social policy administration in achieving its intended aims.

 

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