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Universal Income plans depend on Westminster

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MARK DRAKEFORD’s announcement that the Welsh Government plans to trial Universal Basic Income in a few locations in Wales captured headlines in online media.

The First Minister was variously said to have ‘hinted’ at a trial or announced a trial would take place.

However, nobody should have been surprised by the First Minister’s announcement.

Not only was the policy contained in Labour’s Manifesto for May 6’s election – a bit more than ’a hint’ – but also the principle of holding a trial in Wales was enthusiastically passed by the last Welsh Parliament in September last year. It was a policy in Plaid Cymru’s election manifesto and Labour’s; so, whether Labour went it alone in Government or was in partnership with Plaid Cymru, a trial was on the cards.

WG KNOWS WESTMINSTER HAS THE FINAL WORD

However, whether the Welsh Government can carry out a trial is beyond its immediate control.

Headlines that said the Welsh Government WILL carry out even limited Universal Basic Income trials are also jumping the gun.

When the Senedd debated a motion brought forward by Jack Sargeant MS on September 30, 2020, here is what the Finance Minister Rebecca Evans had to say about it: “The Welsh Government would be open to such a trial taking place in Wales, but we have to be realistic that such a trial would not be possible without the active cooperation of the UK Government, and this is because of the interaction of universal basic income with the tax and benefit system. 

“If such a trial were offered, we would also require that conditions were met to ensure that the Welsh Government and this Senedd were able to play a significant role in the design, governance and accountability of any scheme. 

“Were the Welsh Government to make payments to individuals without the cooperation of the UK Government, this could simply result in them being ineligible for existing benefits or paying more in tax. 

“Aside from the fact that this would not then be a proper test of the effect of an unconditional payment, it would result in the transfer of resources from the Welsh Government to the UK Government. 

“And, sadly, our recent experience of the UK Government’s approach to the taxation of our payments to social care workers doesn’t suggest that we should expect their active cooperation.”

In short, the Welsh Government needs Westminster’s ‘active cooperation’ to make a trial possible.

Without Westminster’s cooperation, those who get the Universal Basic Income could (are almost certain to) lose all of their entitlements to other benefits, tax credits, and other means-tested benefits. They could also have to pay tax on it.

WHAT IS UNIVERSAL BASIC INCOME?

Universal Basic Income is not a new idea. Its long history stretches back to antiquity and has been a feature of both romantic and progressive political theory for centuries.

At its simplest, Universal Basic Income does away with a raft of welfare benefits. It substitutes them with a single payment of a fixed amount.

Schemes that guarantee a basic income, short of enough to live on, exist in a few US states and a handful of national economies. However, those are more of an income floor for those who are otherwise dependent on welfare benefits. They are not an actual Universal Basic Income.

A national trial in Finland ended after two years with no definitive finding of better outcomes for those who received UBI over those who did not.

The Covid pandemic increased interest in the idea of UBI in continental Europe. At the same time, the US used a series of relatively modest income replacement initiatives to stop people’s descent into poverty (or into deeper poverty). 

The UK’s furlough scheme was – essentially – a basic income guarantee but not genuinely universal in nature. 

A major multi-national academic study published in 2017 found that UBI probably improved some health outcomes and increased the likelihood of children attending school. 

However, the same report also concluded the evidence for positive outcomes from UBI-type schemes was ‘very uncertain’.

THE COST TO WALES

The main deterrent to a truly Universal Basic Income is cost.

• If a full universal basic income were paid in Wales to all working-age adults and set at the level of the official living wage, the cost would be around £35 billion a year. 

• If set at the level of the real living wage, the cost would be around £40 billion. 

• For illustration, those figures are around twice the size of the Welsh Government’s budget. As a further comparison, income tax in Wales raises in total just over £5 billion. 

• Of course, the costs could be much reduced if universal basic income were paid at a lower rate. However, payment at a lower rate would reduce its attractiveness.

Those last four points are not our own words. They are the Welsh Government’s position as set out in 2020 by its own Finance Minister.

Nothing has changed those figures since September 30, 2020.

They demonstrate the prohibitive and unsupportable cost of UBI to Wales without massive and systemic change across the whole UK.

SCOTCH MIST

As an illustrative example of the timescales and complexity of introducing even a pilot scheme, we only need to look at Scotland.

In September 2017, the Scottish Government announced it would support local authority areas to explore a Citizen’s Basic Income Scheme by establishing a fund to help regions to develop their proposals further and establish appropriate testing. 

The funding offered was £250,000 over the two financial years 2018/19 and 2019/20. 

Four local authority areas: Fife Council, City of Edinburgh Council, Glasgow City Council and North Ayrshire Council, worked together to research and explore the feasibility of local pilots of Basic Income in Scotland. 

Notlaunch a basic income. Explore its feasibility.

Over three and a half years since the Scottish Government’s announcement, there is still no UBI trial in Scotland.

Putting such a scheme in place depends, yet again, on Westminster’s cooperation.

A report on the progress of the feasibility study notes’ any pilot [must] have the necessary support to influence the future of national policy and the role of Department of Work and Pensions (DWP), HM Revenue and Customs (HMRC), HM Treasury and the NHS will be vital in the design and implementation of a Basic Income pilot.’

Three years to design and complete a feasibility study into a limited trial in four local authority areas in Scotland combined with the need to wait for Westminster approval does not suggest a quick fix.

And if it’s not a rapid process in Scotland, it will scarcely be quicker in Wales.

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National 20mph limit comes into force in Wales next year

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WALES will be the first UK nation to impose a 20mph default speed limit following a vote held in the Senedd yesterday (July 12). The Welsh Government voted to limit residential roads and busy pedestrian streets to 20mph. 

According to the Welsh Government, this will lessen the likelihood and severity of accidents involving vulnerable road users. It will also encourage more people to cycle and walk. 

39 members of the Senedd voted in favour, while 15 members voted against. 

The new national default speed limit will come into effect from September 2023. The Welsh Government say the changes affect residential roads and busy pedestrian streets. 

According to the Welsh Government, the modifications have an impact on major pedestrian routes and residential roadways. The Welsh Government is still deciding which highways will have 20mph speed restrictions and which ones should stay at 30mph.

The 22 councils in Wales will collaborate with Go Safe to determine implementation timelines, according to the Welsh Government, but enforcement will continue throughout the transition period.

Climate change minister, Julie James, stated: “The future of our towns and cities depends on our ability to move around sustainably and on solutions that have a positive impact on public health environment and communities.

“That is why we will use the principle that walking, cycling and active travel must remain the best options for short urban journeys and a 20mph default speed limit will help achieve this. The introduction of a national 20mph limit would be an important and far reaching policy. If passed Wales would be the first country in the UK to introduce the change. We’re asking you all to be part of this change and make our communities understand the wider benefits of 20mph.

“This change is a generational one and when the time to embed, it will need to be accompanied by an important communication and marketing campaign and behaviour change initiatives. Achieving behavioural change is challenging but Wales has previously shown that we can do it successfully with policies such as organ donation, the banning of smoking in public places, and limiting the use of plastic bags. It does, however, require a collaborative effort between agencies, local authorities and by communities. We need to bring speeds down.”

She continued, saying there is evidence that 20 mph speed limits encourage more people to bike or walk, and she hoped this would lead to people naturally choosing those modes of transportation.

According to Ms. James, 80 people die on Welsh roads on average each year, and current data shows that 30mph is the speed at which 53 percent of accidents occur.

The immediate cost is about £33 million, but according to the Welsh Government, increased road safety brought on by slower average speeds could generate a positive financial return of about £25 million over the course of 30 years due to the money saved on fewer emergency services and hospital visits.

Additionally, the policy might result in significant wider economic gains from increased road safety (£1.4 billion), environmental and health gains from increased active travel (£5 million), and additional unquantified benefits from more vibrant and connected local economies.

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Ben Lake MP chairs discussion in Parliament on the cost-of-living crisis

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Ben Lake MP

The ongoing energy crisis has seen the cost of heating the average home double over the last year. At least 6.5 million households across the UK are now facing fuel poverty and the Russian invasion of Ukraine has shone a spotlight on the interlinkages between energy security, demand and affordability.

While energy price rises affect everyone, the impacts are not felt the same by everybody. Low-income consumers face a double burden of the rising cost of bills as well as paying more for their energy due to the poverty premium.

Ben Lake MP chaired a panel discussion in Parliament this week to discuss the current crisis and to consider the potential merits of introducing a Social Tariff. Members of the panel included Alan Whitehead MP, Shadow Energy Minister,  Liz Twist MP, Peter Aldous MP and Alan Brown MP, SNP Spokesperson for Energy.

Commenting after the event, Ben Lake MP said: “I was pleased to chair this important discussion and to listen to the views of cross-party MPs on the potential merits of introducing a Social Tariff.

“Personally, I believe that the UK Government rushed its Energy Security Strategy in response to the energy crisis which emerged last year, and as a result it does not address two pressing issues: affordability and short-term security of supply. A longer-term solution now needs to be found to make energy bills affordable.

“The Warm Home Discount Scheme and the price cap provide important functions in the energy market. As they are currently structured, however, they do not do enough to protect those energy consumers most vulnerable to sharp price increases, which is why I believe the UK Government should consider introducing a new targeted social tariff for energy bills.”

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Large number of NHS staff in Wales currently off work as Covid cases rise

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HEALTH MINISTER Eluned Morgan has said Wales is in the “midst of a new wave” Covid infections” and that around 1 in 20 people had the virus last week.

According to ONS data, it’s estimated that 149,700 people tested positive for COVID-19 for the seven days to 30 June.

Ms Morgan said a large number of NHS staff in Wales are currently off work because they have Covid-19.

Updating Senedd Members on the current situation in Wales, the health minister said: “Over the last couple of weeks, we have seen a steady rise in the number of coronavirus infections in Wales.”

“We are in the midst of a new wave of infections, caused by the BA.4 and BA.5 subtypes of the omicron variant.”

“These are fast-moving, highly infectious forms of the virus, which are causing a surge in infections across the UK and in many other countries around the world.” She said.

Public Health Wales reports the current dominant variant in Wales is the BA.5 variant of omicron.

The latest results of the ONS’ Coronavirus Infection Survey estimate 4.93% of the population in Wales had Covid-19 in the week ending 30 June – equivalent to approximately one person in 20.

This has increased from an estimated 1.33% of the population (one in 75) from the week ending 2 June.

Across the UK, the estimated prevalence of coronavirus ranges from 3.95% in England to 5.94% in Scotland for the week ending 30 June.

Ms Morgan said: “As we have seen in previous waves, the increase in cases in the community, has led to an increase in the number of people being admitted to and treated in hospital for Covid-19.”

“The latest available information shows there are now more than 960 Covid-19-related patients in Welsh hospitals and there has also been an increase in number of people with Covid-19 being treated in critical care.”

She said: “The NHS has been working incredibly hard to provide planned care for people across Wales and to reduce waiting times, which had built up over the course of the pandemic. This task becomes more difficult when pandemic pressures increase.”

“Some hospitals have taken the difficult decision to restrict visiting to prevent coronavirus from spreading among patients and staff; others are asking all visitors to wear face coverings.”

“We are not making face coverings mandatory in health and care settings , but I would encourage everyone to wear one if they are visiting a healthcare setting and I would also ask people to consider wearing a face covering in crowded indoor public places, while cases of coronavirus are currently high.”

“We have extended the availability of free lateral flow tests for people who have symptoms of coronavirus until the end of July.” Ms Morgan said.

She added: “There are a number of other simple steps everyone can take to keep themselves and Wales safe.”

These include:

  • Get vaccinated
  • Maintain good hand hygiene
  • Stay at home and limit your contact with others if you are ill
  • Wear a face covering in indoor crowded or enclosed places
  • Meet others outdoors wherever possible
  • When indoors, increase ventilation and let fresh air in.
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