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Imagining a Universal Basic Income for Wales

August 7th 2017

Interest in a universal basic income has been gaining traction in recent months, but what could it mean for Wales? Nisreen Mansour takes a look.

I recently took part in a discussion about what a universal basic income (UBI) for Wales may look like, an idea that has been gathering a loyal following in Wales. The seminar raised some interesting issues with a universal payment model, as well as highlighting the potential benefits it could bring. This blog post is not a “yes” or “no” to a UBI for Wales; it is a reflection on some of the points raised in that discussion.

A UBI could be a radical revision of the way in which social security is provided. Contribution-based benefits and conditionality could both be abandoned, arguably providing a smoother experience for both the recipient and the provider – potentially resulting in significant administration savings. Advocates also put forward that a UBI will be needed because of labour market changes resulting from automation, providing a constant safety net for the much higher numbers of people only able to find temporary or part-time work.

But it’s not that simple…

A UBI is typically talked about as a flat rate payment to individuals. But if it were introduced so crudely, it would be a step back in terms of recognising variation in regions and people’s circumstances.  For example, the UK’s social security system acknowledges regional differences through the Local Housing Allowance – the amount of Housing Benefit you may be eligible for differs depending on where you live. Similarly, as council tax varies by local authority area, so does the benefit. And our social security system recognises people’s different needs too. The Personal Independence Payment is received in addition to any other income someone receives – whether from employment or social security – to assist with the cost of living with an illness, disability or mental health condition.

Even if a UBI were introduced in Wales as an additional payment to our current social security system, there would still be a case for it to differ depending on the recipients location or other circumstances, such as their age.

Truly universal

While plenty of policy discussions conflate the ideas of a universal basic income and something closer to a minimum income payment, a true universal basic income must be paid to everyone – which many of the trials do not do.  The EU-funded trials running in Utrecht, Barcelona and Helsinki, for example, do not offer a universal payment – they are trialing payments to a select group of people who would otherwise receive social security benefits. While they are an important experiment in how social security could be delivered differently, they give little indication of the cost or effects of paying a UBI to the whole population. Nor do they capture the possible changes to how employers may view their responsibilities to their employees, or potential changes to our other rights such as the minimum wage.

What difference could it make?

While the difference between a true UBI and what is being trialed may seem like a technicality, I would argue that it is very important in terms of the outcomes we would be looking for from a UBI. After all, what difference would it make to someone who gets £317.82 in their bank account every month through Universal Credit, or £317.82 every month as a UBI? And if Wales were to introduce a basic income in addition to the social security system, would it make the most difference if it were paid universally or to a particular group?

Before we consider if a basic income (universal or not) is the right option for Wales we first need to explore what the principles of a Welsh social security system should be to find some of the answers to these questions. And perhaps we shouldn’t be too dogmatic about whether it is truly universal or not.

Nisreen Mansour is Senior Policy & Research Officer at the Bevan Foundation.

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