Universal basic income in Wales ‘would cut poverty in half’, major study claims

Poverty in Wales would be halved if the Welsh Government established a universal basic income (UBI) system in the country, a major study has found.

The research, carried out by leading think tank Autonomy, found UBI would decrease overall poverty rates in Wales by 50%, and child poverty would decrease by 64%, bringing it to a rate of under 10% in Wales.

It is currently at 28% – the worst in the UK.

It also found nearly three-quarters of people in Wales, 69%, support piloting UBI.

UBI is a government programme in which every citizen receives a set amount of money on a regular basis, regardless of their employment status.

It is a minimum payment, designed to meet basic needs, paid to everyone individually, unconditionally.

Earlier this year the Welsh Government announced its ambition to pilot a form of UBI in Wales, but suggested the scheme would focus on specific groups of people, like care leavers.

However campaigners including UBI Lab Wales, the future generations commissioner Sophie Howe (pictured) and more than 1,000 petitioners have since called on the First Minister to ensure the pilot includes children, the employed, the unemployed and pensioners, as well as care leavers.

Ms Howe, whose role was created under Wales’ Well-being of Future Generations Act, will on Monday give evidence to the Welsh Parliament’s Petitions Committee, alongside director of research at Autonomy Will Stronge, calling for a geographically-based universal basic income (UBI) scheme.

She said UBI could deliver “a more equal, prosperous Wales”.

“Piloting a UBI trial here in Wales gives us a chance to increase the prosperity of every single person, giving more people a life jacket when they need to keep their head above the water – which has the potential to create a healthier, more equal population,” she said.

“The findings in this report should excite leaders who say they want a true green and just recovery that makes life fairer for everyone.”

Mr Stronge said: “The Covid-19 pandemic necessitates radical and bold changes to support people through future economic shocks.

“As the economy and labour market struggles to find its feet, it’s clear that guaranteeing an income floor for all is the most progressive way of securing livelihoods.”

Ewan Hilton and James Radcliffe, chief executive and head of policy at Platfform, a mental health and social change charity, will also be giving evidence at the session, as well as Lydia Godden, of Women’s Equality Network Wales (WEN Cymru).

A trial in Wales of 2,500 people, the report finds, could cost about £50m, with adults being paid from £60 per week.

Those who were already living in poor health, poverty or in marginalised communities are said to have been the hardest hit by the pandemic.

Rising living costs, combined with the end of the coronavirus job retention scheme, also known as furlough, on top of cuts to welfare benefits such as universal credit, is amounting to a “perfect storm” or “tsunami”, according to respondents to a Senedd Committee inquiry into debt and the pandemic held this month.

A review into a UBI pilot in Finland, which ran from 2017 to 2018, found people who took part were generally more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness.

They also worked slightly more than those on unemployment benefits and reported better cognitive functioning.

While Finland was the first European country to pilot such a scheme, it was in the end considered a failure. However, many experts have since said the scheme was flawed because it was underfunded and rushed.

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.”

The Welsh Conservatives called UBI in Wales a “fantasy idea”, adding: “What Wales desperately needs is an ambitious plan to level-up opportunity and deliver economic prosperity across the country, not a blank cheque that buys nothing but popularity with the far-left.”

Copyright (c) PA Media Ltd. 2021, All Rights Reserved. Picture (c) The Future Generations Commissioner.