By Richard Gurner
Universal Basic Income (UBI). It’s a topic that has generated many headlines in Wales in recent months.
The concept of UBI is simple. Everyone, regardless of their own particular circumstances, gets paid a set amount of money by the state on a regular basis.
According to the Senedd’s research and information service, the arguments for and against are broadly as follows:
The arguments for Universal Basic Income
- It is every citizen’s right – providing security from poverty and improving health and well-being.
- National income is distributed more equitably.
- Non-paid labour such as caring is rewarded.
- Workers get the freedom to choose what they do.
- Easier to understand than the current benefits system.
The arguments against Universal Basic Income
- It’s expensive – a full UBI in Wales could cost anywhere between £35 and 40 billion. The NHS budget in Wales is currently £8.3bn a year.
- It’s not targeted, so money goes to those who don’t need it.
- A huge shift from the current benefits system and one that could lead to a disincentive to work.
There is also the threat (or opportunity?) of automation in the workplace. In the future, increasingly more jobs will be replaced by automation technology. According to analysis firm Oxford Economics, up to 20 million manufacturing jobs could be lost by 2030. And other industries are just as vulnerable – think about when you last used a self-service checkout at the supermarket.
Technology obviously brings a benefit of increased production – just look at the Industrial Revolution – but can we as a society reap those benefits by supporting those whose jobs have been replaced by automation? That’s where UBI could help.
Valuing the individual
But proponents of UBI argue that it is something more fundamental than pure economics.
The UBI Lab Network is an organisation of local groups putting forward the argument of a universal income.
Helena Hyatt helped establish UBI Lab Caerphilly.
The New Tredegar resident said: “This is not just for people with low incomes. The aim of work is to survive – if you are lucky then you do something you enjoy – but people don’t work their best when they are at the other end of the whip.
“UBI could flip that. People could work 100 hours a week – but doing something they love to do. It is about changing the relationship with work so you can do what you want. So much work is already unpaid – from the caring to the arts.
“For me, that’s what UBI is about – breaking the link between the need to survive and human activity. It values each individual in a society, giving them back their agency.”
What’s happening about UBI in Wales?
First Minister Mark Drakeford quickly committed the Welsh Government to a UBI trial immediately after May’s Senedd election. So far, not many details have been released, but what we do know is that any trial could involve people leaving care. However, the Welsh Government is limited in its powers as the benefits system is not devolved in Wales. Any trial would have to work within the current devolution areas.
The think tank Autonomy published a briefing paper on UBI earlier this year and laid out plans on how a pilot could look.
It estimated that it would cost £99m over two years with 5,000 people taking part – half in a rural area and half in an urban setting. This would amount to 0.6% of the Welsh Government’s 2021/22 budget.
Helena, from UBI Lab Caerphilly, said the county borough would be suited for such a trial.
She said: “It is varied. It has areas of wealth and it has areas of deprivation. We think it is a good area to trial UBI for everybody.
“At the moment, all that is being proposed, or being considered, are care leavers. We are pushing for a whole trial because we want to test this out. When the results come in, we want them to be conclusive.”
What’s happened with UBI trials in other parts of the world?
The largest and longest term study of UBI is in Kenya. It began in 2016 and involves 20,000 people split into three groups: a short term group (two years), a long term (12 years), and a lump sum group.
In March 2021 the study reported that the recipients of UBI experienced “better food security and were less likely to report experiencing hunger”. However, it also found that UBI in Kenya “was not effective at completely protecting recipients from economic hardship”.
A Basic Income Experiment was undertaken in Finland between 2017-2018. 2,000 unemployed people aged 25-58 received a monthly payment of €560. The experiment found that employment effects were small, “but recipients were “more satisfied with their lives and experienced less mental strain” and had “a more positive perception of their economic welfare”.
In February 2019 a two year study began in Stockton, California. A report of the first year’s findings said recipients of the guaranteed income were “healthier, showing less depression and anxiety and enhanced wellbeing”, and were able to find full-time employment.