Sat, 18th July Cardiff 22°
Nation.Cymru wordmark
Advertisement

Opinion

Westminster won't implement a basic income to get us through this crisis - but Wales should

By NationCymru
Money

Helen Mary Jones, Plaid Cymru Assembly Member for Mid and West

Later today I will be taking part in the first virtual Senedd. One of the issues I want to raise with the Welsh Government is the importance of introducing an emergency Universal Basic Income to help people during this public health crisis.

The help that has already been made available to businesses and to individuals by the UK and Welsh Governments is of course welcome.  But there are still too many falling through the cracks. The people losing livelihoods because they are being laid off, employers either can’t or won’t make use of government support, the people who have recently become self-employed and have no tax records to show.

This includes self-employed people who can’t wait until June when they’ll get paid the support on offer from the UK Government.

People who have to walk away from jobs because their employers are pushing them to work when they know they need to self-isolate. We need some support that works for them.  Plaid Cymru’s call for an emergency Universal Basic Income would ensure everyone has guaranteed financial security for the duration of the Coronavirus crisis.

Basic income is an idea that has been advocated across the political spectrum for many years. It can go far in addressing the current uncertainty.

Key elements of a Basic Income are that it is:

  • Basic: A minimum payment, sufficient to meet basic needs
  • Universal: Paid to everyone, based on rights of residency
  • Unconditional: Without conditions, and non-withdrawable, irrespective of other sources of income
  • Individual: Assessed and paid individually (including to children) rather than by household

And, of course, it’s taxable, so if anyone claims it now, in this time of crisis and their circumstances improve later they will, effectively, pay it back.

[mid-content-banner]

 

Desperate

We know Westminster is not willing to do this, another example of why Westminster doesn’t work for Wales.

This is an opportunity for Welsh Government to do something really innovative and imaginative to help Welsh citizens most in need. Surely they are not going to rely on a Johnson-led government in London to solve all our problems even at such a time of acute need.

My email inbox is full of people contacting me because the current support just doesn’t work for them. Some of them are desperate.

We estimate that a Universal Basic Income at median income would cost £247m for a whole month for the Welsh Government (with backdated payments to the 1st of March 2020). This could be paid for by drawing down Welsh Government fiscal reserves as well as borrow the funds.

In times such as this, what we need now more than ever is an ambitious and innovative plan that gets to the heart of the issue. The patchwork of plans we have now is just not working.

As an earlier article by Tegid Roberts for Nation.Cymru has pointed out paying a Universal Basic Income could prevent a future collapse of the Welsh economy. It is right that we act now, rather than wait for an economic crisis.

A temporary basic income will ensure that individuals can pay their bills, put food on the table and feel secure in what is an unprecedented time.

You can follow me on Twitter here, like my Facebook page here or email me here.

For the price of a cup of coffee a month you can help us create an independent, not-for-profit, national news service for the people of Wales, by the people of Wales.

Get more trusted Welsh news

Choose Nation.Cymru as a preferred source in Google News to see more of our journalism.

Choose Nation.Cymru as a preferred source in Google News

19 comments

vicky moller

wow thats a bold proposal. Incredibly valuable to people I know, BUT is there any way to ensure this money circulates within the Welsh economy rather than leaching out? With the wonders of IT and the need to reduce cash, it should be within our capability? Or this aspect could be phased in

Reply
Neil Anderson

Helen Mary Jones AM is quite right. There are too many holes in the UK Government's net (as always) to prevent unnecessary suffering and deprivation. So typical that they would prefer something complex to administer which doesn’t reach everyone. Always a good idea, the time has certainly come for a UBI. And yes, Vicky, there is a way that we could stop it leaching out of Cymru. With public approval and support from the business sector (who would have a similar incentive to welcome the additional revenue), the Welsh Government could create a digital currency that would be legal tender only within Cymru. It would require only a bank sub-account (like a Euro account) and a debit card. This could be done within weeks. Shops would accept payment to the extent (proportion) that their inputs (including local labour) originate in Cymru. The value of the currency would be supported by the WG allowing taxes and other revenue collected by them to be at least part-paid in the supplementary currency (in a previous article, I called it the Ari). Inflation should be a minor or non-existent concern, but if higher prices for goods produced in Cymru flow through to our wages, that would be surely be a good thing. It should start at a low rate to test systems and ensure that potential fraud was detected and eliminated. The equivalent of £10 (10 Ari) would be paid to all residents of Cymru every week, then increase regularly. For a permanent supplementary currency, I favour this being paid to children as a form of savings they could only access from age 16. Such accumulated capital would allow them a major contribution towards their future education, business start-up or other investment utilised wholly within Cymru. Suppliers within Cymru could be at least part-paid by retailers who would have an incentive to source their inputs within Cymru. The Ari would be good news for Penderyn, not so good for Glenfiddich! Difficult times require imaginative solutions. This would be one thing we could do for ourselves without the heavy hand of Westminster. For the sake of all in Cymru, I hope that the Senedd responds positively to HMJ's initiative.

Reply
Cymro

The voting in at the last election of Tory MP's by the Welsh electorate was dismaying however I hope they all regret their decision all the Torys have ever done is (to quote Cordell) is "Rape the fair Country" they have always taken and given very little Cymru has more poverty than any other UK country look at the last budget £10/head to Scotland £1/head to Wales? This tells it all or are they bribing the Scots So the decision by the Torys not to support the people of Wales as equals does not come as a surprise I hope you who voted in a party that has always treated us as subservient reconsider when you cast your next vote at election time.

Reply
Richard LONGUES

To exceptional problems, exceptional solutions. Make it linked to a «Buy Welsh» programme, show that you're capable to rule yourselves. Remember the potato bligh in lreland. You dont't count your money, when you count your deads. Save your lives, save your economy, and save your Liberty. Rhyddyd ! Cymru am byth !!

Reply
Griffith John Davies

Ardderchog Helen Mary Jones! This is what is needed! No dramas, no ifs or buts, the way to get it sorted. Thanks. Diolch o galon.

Reply
Huw Davies

Elsewhere headline reads : "Push to end low pay may have to be scrapped, UK government warned …….Low Pay Commission says cost of fighting coronavirus pandemic endangers flagship pledge to raise national living wage to £10.50 an hour" So here we go again. Bunter's brigade will be in no rush to raise the tax take from the rich and super rich so the cost of Covid-19 "handouts" will be recovered from those that can least afford it. Wales won't do much on any kind of UBI until it breaks free. Until then we have to team up with any one who can see sense and fight for an equitable tax structure with far fewer loopholes, allowances etc, indeed any and all euphemisms for tax evasion on an industrial scale. To date both the major UK Unionist parties have failed abysmally to address this lingering issue and the LibDems were Cameron's little helpers for 5 years so they stink too.

Reply
Dr John Ball

If only it were that simple. There IS a very strong case for a Universal Basic Income for two very basic reasons. First of course is disposable income - you don't have to know anything about economics to understand the economy ultimately relies on people spending. This is the fundamental weakness of the Welsh economy; low wages and thus low spending power. The second is its simplicity. Available to all without the need for endless form filling and, for those currently in receipt of Universal Credit and other social schemes, the ability to go to work without losing benefit or indeed, breaking the law. However, there are issues to be addressed. The first and obvious is exactly how much is paid to the individual, and then what logically follows is the question of who exactly qualifies. In the article by Tegid Roberts reference is made to payment for those working, but such a scheme would apply to everyone, working or not -and would it apply to pensioners? The recovery rate is the tricky issue; a marginal income tax rate of 40% is likely to apply, although obviously after a set threshold. The cost of such a scheme needs to be carefully examined. Helen Mary Jones' scheme (she does not say to whom it would apply) would cost £3bn per year; Tegid Roberts' fully £11bn per year. Before hands are raised in horror, the cost would be offset though its simplicity; the need for an army of civil servants pouring over claim forms would disappear, together with their colleagues in taxation - a simple ubi and a simple tax rate would be very efficient! Increases in spending would also assist in recovering the cost of the scheme. However, three things bother me. The first is the knee jerk reaction to the current problem, for it to work such a scheme needs to be carefully constructed and not be just a convenient political stunt. Secondly, and following on, I doubt if the Assembly has the power to establish such a scheme, and in any event could not - under the present devolution settlement - afford it. My main worry is the economy. A ubi injection, leading to extra spending would, in theory boost the economy (and tax take). However, there would be absolutely no point if recipients run off the Tesco and spend the extra money on goods and services produced outside Wales; which sadly is the case. Let me be clear. I am in favour of ubi, although what I am suggesting is the it needs to be thought through. Of course in an independent state we could get on with it......

Reply
Huw Davies

Interesting that you mention Tesco in your closing comments. Now that's an outfit that has worked hard during this Covid -19 crisis to meet customer demands, not always successfully, but high marks for effort. Of course they have enjoyed an increased revenue from the panic buying so no dent in their performance. So far so good. So why on earth have they started bleating about missing out on council Tax/business rate "holiday"/rebate ? They don't sound like a troubled business to me. Or is this yet another government cock-up ( Cardiff or London ?) with handouts farmed out indiscriminately while other far more deserving cases are left with no safety net ?.

Reply
Neil Anderson

This is exactly the sort of discussion would ought to be having about a UBI. John's contributions are always valuable, and most of the time I agree with him. In response to two points he makes... Tax: my proposed digital currency would be taxed at source by the WG at a rate of 10%. End of. There is a need for a range of other taxes in Cymru (eg. sales taxes) in order to lower income tax. But that's a discussion for another time. The WG would then have its own Ari account, again to be used internally. Of course, a sovereign government (independence!) would have a magic money tree to fund anything (read Richard Murphy's blog Tax Research UK on MMT - Modern Monetary Theory). With public consent, the WG could surely go ahead with a purely internal digital currency without Westminster's imprimatur. Cost: I estimate that the Ari would cost about £10m in set-up costs, mainly in providing 3m debit cards and explanatory information.

Reply
Jonathan Edwards

I agree about the simplicity. Probably why the US is paying people a standard lump sum. But really the problems are deeper. (1) Wales - even Plaid Cymru - is not showing the knowhow or fire to get the necessary independence including economic base. So we have standard global-left virtue signalling like open borders and global trade/supply trains (not working with the virus, are they?). (2) You can't leave out the social angle. Are we willing to say that vast chunks of the population will have a reduced will to work and just live off the State? We are at the point where we are not dealing with the dependency culture we already have. And we are on the brink of accepting a dystopic (non-existent) family life. Be in no doubt that feminists want women to be provided the following as human rights: not only open-ended health care, but child-care, education for life, State income instead of husbands/fathers (except at arm's length). I'm sure HMJ will confirm this. For half the population. But does Wales really want to go down such a path? Think about it, Wales!

Reply
Dr Sian Caiach

In my party, Gwlad we have a done a lot of work on universal basic income and it is a very good idea, as Helen Mary points out. The April Fool's Joke is that however beneficial a universal citizens basic income is, the Welsh Government, unless it has been secretly hiding a great deal of money away for a rainy day, cannot deliver it. At the moment the UK government is in control of Wales and cannot offer one area of the UK a universal basic income without rolling it out to everyone across the UK. As most Government finance is supposedly going into supporting the UK businesses and economy, rolling out a basic income is probably low on the list,especially as merging all the benefits into one would likely cause public sector job losses as the individual benefits, pensions, credits and child allowances transform into one payment per adult or child. If you examine the issue, it is not as straightforward as one might think. For it to work in the long term for Wales, we would need National Independence and the consequential control of our laws, our money supply and , naturally,strict eligibility criteria. The crux is that to give a generous level of basic income to everyone in Wales, funded predominately by taxation of higher earners, we need a better economy. So even after Independence we will have to build a much more productive and wealthy country to pay for a much fairer society. I believe a universal citizen's income is a great idea for Wales .But I don't expect it to come immediately , but as soon as possible after independence. Read more at Gwlad.org in our manifesto and published papers Dr. Siân Caiach, Chair of Gwlad- The Welsh Independence Party NB Please note that we were recently able to successfully apply to the Electoral Commission to use the name "Gwlad" as the of he UKIP spin off "Our Nation" UK Party has been disbanded, This means that we can use the name "Gwlad " without danger of confusion with "Our Nation" The Electoral Commission have also accepted the Phrase "The Welsh Independence Party" as a description.

Reply
j humphrys

THE Welsh independence party? But still not Ein Gwlad, never mind Gwlad will do.

Reply
Eos Pengwern

We decided that plain Gwlad would be better still. As for The Welsh Independence Party - which we're also allowed to put on ballot papers now - we believe we've earned the right to use that title by having thought through the practicalities of independence in much more detail than any other party. You can see that from our blog, and even more so from our 2020 Manifesto once it comes out (when we've finally been able to have it approved by our members at our Policy Convention, which had been due to take place in Llanhilleth on 28th March but will now take place at the same location later in the year).

Reply
Dr John Ball

Sian is absolutely correct. Perhaps I should have added to my contribution that a healthy and productive economy is THE very first and basic requirement. I am not naive enough to believe that on the first day of independence everything will be rosy and every day the first day of spring; but what I DO believe is that independence gives us the freedom and the opportunity to build such a successful and productive economy.

Reply
Jonathan Edwards

You're dodging the question. Having (improbably, givend 100 years of inertia under Labour) got your productive economy, which we all want, what then? You've got an intellectually elegant idea, UBI. But is it a good idea socially? Do all Nation.cymru readers assume UBI is socially a good idea? Have you actually thought about it?

Reply
Eos Pengwern

There's an article on the gwlad.org website that sets out the detail of how we envisage a UBI (or as we prefer to call it, a Citizens' Income) working in Wales. It was published in November 2018, so no-one can accuse us of jumping on a bandwagon here: https://gwlad.org/en/2018/11/29/english-a-citizens-income-for-wales/

Reply
j humphrys

An increasing amount of posts are "of course, if we had indy............" If this Covid stuff carries on, we will have to have an AUOB permanent cocktail party of opinions, apart from the official OPINION pieces. Did David Jones call this Anathemata?

Reply
Jonathan Gammond

Would recommend listening to a recent programme on the experience of Alaska and its basic income scheme, its strengths and its weaknesses. Politicians always think we will switch off our critical faculties as soon as we hear them say the words 'bold and ambitious' however it is usually a warning that we should do the opposite and think through the medium and long term consequences before rushing to implement a short-term solution, however appealing it looks at first glance.

Reply
Kerry Davies

If Wales had the money and if WAG had the power and if the UK let us get away with it it would take a couple of years to set up a functional UBI but Wales has neither the money nor the power and Westminster is as likely to allow it as fly to the moon. It certainly wouldn't help in the current crisis no matter how brilliantly it was set up. As for a Wales only currency it cannot work, the border is too fluid and fickle. The Hay Co-op is in England and the Boat Inn Penallt has a car park across the river in England. A serious debate and examination of UBI is long overdue and it has to be more than a hasty filler in a time of crisis. What on earth we do with a quarter million or more redundant civil servants is not the least of the problems, just imagine trying to tell the overpaid parasites in Whitehall that they needed to go to work? The biggest obstacle to UBI will be the removal of opportunities to evade, avoid and generally steal taxes which will bring out two thirds of our Westminster MPs and the entire MSM on a war footing. A simplified tax system is the last thing the wealthy want.

Reply

Leave a comment

Comments are reviewed before they appear.