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Wales Is Set to Pilot Universal Basic Income. But Could It Help End Poverty?

Why Global Citizens Should Care
With the coronavirus pandemic leading to widespread unemployment and poverty, a universal basic income could help alleviate these problems and combat extreme poverty. Ending extreme poverty is the first of the UN's 17 Global Goals to end extreme poverty and its systemic causes. You can join us in taking action on this and related issues here.

Universal basic income (UBI) is an idea that has captured the imagination of anti-poverty campaigners around the world for decades.

It’s a simple concept: every citizen receives a regular minimum income, regardless of their economic background. Such payments would cover the basic cost of living, provide financial security for all, and theoretically eliminate poverty. 

Tests have taken place across the world, from Finland to Kenya. But the UK has yet to test any practical, substantial UBI experiment with its own citizens, until now — as on May 14, political leaders confirmed that Wales would press ahead with a pilot scheme.

Mark Drakeford, first minister of Wales, confirmed that his government would pursue the pilot in an interview with Greatest Hits Radio last week.

“A basic income pilot is one of the specific responsibilities of our new social justice minister,” Drakeford said. “It will have to be carefully designed, it will draw on the experience of attempted pilots in Scotland, but I have a very longstanding interest in basic income.” 

“I hope we will be able to mount an experiment here that will test whether the claims that are made for a basic income approach are actually delivered,” he continued. “We’ll do it on a cross-party basis. There are 25 members of the Senedd in different parties who have expressed an interest in it. I want to do it on that broad basis and design the best possible pilot.”

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UBI is not a new idea.

In 1967, Martin Luther-King Jr. laid out his vision for the “immediate abolition of poverty,” in the last book he would publish before he was assassinated the following year. He argued that previous intervention efforts had not been direct enough — and the only answer was to ensure every American had a guaranteed income provided by the state.

Since then, activists around the world have been calling on their governments to consider the scheme, and numerous tests have been conducted to understand whether UBI is an effective tool for alleviating poverty and improving well-being. Often, different versions of UBI would be tested, for example in Brazil, where it was represented by cash transfers to its poorest citizens.

Back in Wales, Drakeford's government has acknowledged the potential hurdle the nation might face, given it's devolved power. Previous work done by the Scottish Government exploring the idea cited “significant challenges” for devolved nations hoping to roll it out and concluded that any pilot would "require considerable commitment from the UK government to make the necessary legislative, technical, and procedural changes required.”

Without that centralised support from Westminster, Scotland suggested a pilot would prove extremely difficult. According to Wales Online, the Welsh government is conscious of the study, and is reportedly still working through the specific details of their own attempt, and have mooted that the small pilot could be focused on care leavers.

Previous experiments testing UBI within a country’s welfare system have produced positive results — so much so, that some activists have suggested that the time for testing is over. Now, they argue, is the moment to start rolling out the schemes properly, especially given the dramatic global increases in poverty and job insecurity as a result of the fallout from the COVID-19 pandemic.

One pilot in Finland, carried out between 2017 and 2018, found that $600 a month in UBI payments improved recipients' "mental well-being, confidence, and life satisfaction," without affecting people’s desires to seek employment. Then in June 2020, Spain kicked off the largest trial to date, testing a variable of the model called guaranteed minimum income to support 850,000 of the country’s poorest households with monthly payments of $1,145.

And in Kenya, a UBI experiment has been underway since 2017. It pays 5,000 people $0.75 a day for 12 years, offering the same amount to 9,000 adults over two years, and giving a lump sum of $500 to another group of 9,000. It discovered that those who received both types of payments experienced less hunger, sickness, and depression, and, especially, it has supported people during the pandemic.

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As more countries conduct their own tests, and more evidence accumulates, the stature of UBI continues to rise — and the power of the movement continues to grow. The trial in Wales is especially important in that context, as part of that wider struggle to give credibility to the idea.

“This is a huge moment for the basic income movement in the UK and around the world,” said Jonathan Rhys Williams, from campaign group UBI Lab Wales. “To see the first minister firmly commit to a trial is incredibly satisfying.”