Universal basic income to be tested in Wales

Welsh government considering trial of unconditional payments to people leaving care

First minister Mark Drakeford said the pilot would ‘need to be carefully designed’ to ensire it has the desired impact (Getty Images/iStockphoto)

The Welsh government is to trial a universal basic income (UBI) scheme that would pay adults a set amount, regardless of their income.

People leaving care could be the first to go onto a pilot UBI scheme, a spokesperson for the Welsh government told the BBC.

First Minister Mark Drakeford first floated the idea of UBI in Wales on Saturday. He said a pilot would "need to be carefully designed to make sure that it is genuinely adding income for the group of people we are able to work with".

He added: "It'll have to be a pilot because we don't have all the powers in our own hands to do it on our own.

"It'll have to be carefully crafted to make sure that it is affordable and that it does it within the powers available to the Senedd.

"We need to make an early start on designing the pilot to make sure that we have the best chance of operating a pilot that allows us to draw the conclusions from it that we would all want to see."

UBI has attracted increasing interest around the world as governments look for ways to alleviate poverty and reduce inequality.

But the Welsh Conservatives dismissed the idea, citing research fro the Jospeph Rowntree Foundation which suggested UBI can increase poverty "unless modified beyond recognition”.

A spokesperson for the party said: "The first minister needs to get on with kickstarting the Welsh economy, creating long-term, well-paid jobs for people rather than using Wales as a petri dish for failed left-wing policies."

What is universal basic income and how would it work in practice?

The idea is simple: all adults receive a no-strings-attached sum from the state to cover the basic cost of living.

Unlike most benefits, which are means-tested, the amount is paid to everyone, regardless of their employment status, wealth, marital status, or any other circumstances.

This unconditional safety net will, it is argued, ensure nobody lives in poverty which will, in turn, free the creative, entrepreneurial instincts of the population.

Interest in basic income as a genuine policy option has increased rapidly in recent times, from both sides of the political spectrum, particularly in response to a much-hyped “rise of the robots” that could see millions of jobs automated in coming decades.

Trials of UBI are not a new idea. Some have shown positive results on a small scale but none of which have yet been demonstrated on a national level.

A successful trial that took place in Manitoba from 1974 to 1979 resulted, according to one study, in an 8.5 per cent drop in hospital visits, fewer incidents of work-related injuries, and fewer emergency room visits from accidents and injuries.

Less people were admitted to psychiatric hospitals, and doctors recorded fewer appointments for mental illness.

The research found that while some groups worked less, only new mothers and teenagers did so to a substantial degree; new mothers so that they could care for their babies, and teenagers because they were under less pressure to support their families financially.

More recently, in Finland, 2,000 unemployed people were given €560 (£516) a month for two years, paid directly into their bank accounts. The payments did not stop when they got back into work.

Giving people a universal income did not help them get into jobs, but they did feel somewhat happier than those in the control group.