Wales to trial basic income for everyone regardless of age or job - how it works

Mirror logo Mirror 17/05/2021 11:40:24 Emma Munbodh

Wales is to trial a new Universal Basic Income, paying members of the public a regular salary, regardless of their age, occupation or wealth status.

The new scheme is expected to be trialled this year and would pay a fixed sum which it believes would cover the basic of living.

First Minister Mark Drakeford said the pilot would "see whether the promises that basic income holds out are genuinely delivered" when put into practice.

Drakeford 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."

a person holding a cell phone: It is hoped that the policy would give every member of the public enough support to cover the basic cost of living © Getty Images/iStockphotoIt is hoped that the policy would give every member of the public enough support to cover the basic cost of living

Wales' future generations commissioner, who has previously called for a pilot, said she was "delighted" with the plan.

Sophie Howe said: "Signalling basic income as a priority for the new government is an incredibly significant commitment by the first minister to tackling Wales' poverty and health inequalities - which cause lasting damage to the health and prospects of individuals, families and communities.

"It's a huge moment for the campaign, which I've been proud to be a part of, and the growing support for a fairer way of allowing people to meet their basic needs.

"The current system isn't working - Wales' commitment to exploring a basic income once again proves it's often the small countries that can be world leading and make the biggest changes."

In its manifesto, Plaid Cymru supported a UBO trial in order "to prepare for a future where work may have a different role in the economy as a result of automation and the application of AI and related technologies".

The Welsh Liberal Democrats also previously said "UBI not only reduces inequalities and increases wellbeing, but that it strengthens local economies".

What is a Universal Basic Income?

a sign on a pole: Universal Credit claimants often have to wait five weeks for their first payment - which can leave many families falling into debt © Getty Images EuropeUniversal Credit claimants often have to wait five weeks for their first payment - which can leave many families falling into debt

The idea behind a Universal Basic Income system is to give every citizen a fixed, untaxed sum to live on, whether they are rich or poor, in work or unemployed.

In theory, it would give everyone in designated areas a certain amount of cash every week - ­regardless of their income.

This money can then be spent how they like, ie on rent or to start a new business venture.

The underlying idea is that it will be used to study, to become an entrepreneur or to leave work to care for a loved one.

What are your thoughts on a Universal Basic Income? Let us know in the comments below

Some high profile celebrities, including billionaire businessman Elon Musk, have backed the idea, while the UK Labour Party said it would explore a pilot of UBI in its 2019 general election manifesto.

Various versions of the scheme have been trialled around the world, including in Finland, where 2,000 unemployed people were paid ?560 (£480) per month for two years.

Meanwhile, in western Kenya, a 12-year trial is taking place, where every adult is being paid £16 per month to see if it can help lift people out of poverty.

Could it be introduced in England?

In 2019, a Labour MP pledged to scrap Universal Credit and replace it with a new one-for-all payments system if his party regained power in the general election.

Shadow Chancellor John McDonnell said Labour would trial a monthly, untaxed 'Universal Basic Income' in Liverpool and Sheffield to give Brits the "freedom" to work, study, create new businesses and care for relatives, alongside "economic security".

While Labour did not win the election, it is still calling for a pilot of the project to help the public cover the basic cost of living.

However, it would not replace the state pension - in many ways it would be a state pension for all, regardless of your National Insurance contributions or age.

It would mean an end to fit-for-work tests, an end to assessment periods, an end to means testing and more - benefit sanctions would become impossible.

During the pandemic, a petition added to these calls, urging the government to consider a Universal Basic Income to support UK families at risk of poverty due to Covid-19.

The activists behind it said an emergency package should be introduced to ensure all UK residents have access to shelter and food during the coronavirus crisis.

"Doing this will reduce pressures caused by acts of desperation," the petition said.

On March 19, a cross-party group of 170 MPs and peers wrote to the government, urging it to introduce the initiative.

They said it "would give everyone the financial support they need to provide for themselves and their families during this crisis".

They expressed particular concern for the self-employed and those in precarious roles.

However, instead, the Chancellor introduced a series of self-employed grants, small business loans and increased universal credit payments for all but those on legacy benefits by £1,000 until September.

More recently, Lib Dems and Greens on the London Assembly have also been pushing for a trial of the radical scheme.

However, one Conservative minister has suggested the money would be wasted.

Shaun Bailey, the Tory candidate in the London Mayoral election, this month claimed people would blow a Universal Basic Income on "lots of drugs" if given the handouts.

He said the idea needed to take "the human condition" into account: "I've been a youth worker for over 20 years. I know some people would absolutely fly if you gave them a lump sum to deal with every week.

"I know some people who would buy lots of drugs," he added.

a person holding a baby: It could also help tackle a rising poverty problem © Getty ImagesIt could also help tackle a rising poverty problem

Bailey also questioned whether it could "drive prices up for basic goods when we know people could just buy them because the money's there".

Where has it been trialled before?

The scheme has previously been trialled in Finland, however its 24-month model was slightly different - focusing on those out of work only.

The Finnish Government paid 2,000 unemployed people £490 (?560) a month for two years, instead of unemployment benefit.

The basic income was paid with no strings attached. Recipients weren't required to seek or accept jobs but still received the payment if they found a job. However, it said the findings of the experiment weren't fully convincing.

Overall, however, it said people were more likely to find work when enrolled on the scheme.

The largest pilot launched to date, however, ran in Kenya and was funded and implemented by the non-profit ­organisation GiveDirectly.

It provides a basic income for 21,000 villagers and will be monitored for the next 12 years.

How much is it?

Different Universal Basic Income models pay differently - it would all depend on how it would be funded.

Under a scheme in the UK, it could be tested in low-income areas, including one in which a whole community gets basic incomes.

All the means-tested benefits - apart from housing benefit - would be taken away and every adult would pocket, for example, £100 per week.

They would also get an additional £50 for each child they have.

However, it could be more than this.

The Royal Society for the encouragement of Arts, Manufacturers and Commerce (RSA) is one of the biggest advocates of the scheme.

It has previously suggested a £3,692 a year payment for all qualifying citizens between the ages of 25 and 65, while pensioners would be paid £7,420 over the age of 65.

It's essentially a pension for everyone - at £71 a week - without having to make the National Insurance contributions first.

Then there would be a basic income for children aged 0-4 of £4,290 for the first child and £3,387 for other children aged 0-4.

There would be a reduction for a third child or more, potentially to zero.

This, it said, would be comparable to the benefits available to low-income households before their child begins school.

Once in education, the payments would then fall, as parents would be able to work more hours.

lundi 17 mai 2021 14:40:24 Categories: Mirror

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