Politics
Universal Income plans depend on Westminster

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.
News
Hundreds of Pembrokeshire Council Tax defaulters in court next week

HAVERFORDWEST Magistrates’ Court will hear cases against hundreds of defendants next week as Pembrokeshire County Council seeks liability orders for unpaid council tax and non-domestic rates.
The session, scheduled for Monday (Mar 17) at 10:00am, will see a block of cases between 12:00pm and 1:00pm dedicated to council tax disputes. The council is applying for liability orders under regulation 34 of the Council Tax (Administration and Enforcement) Regulations 1992.
A total of 341 defendants are listed for non-payment of council tax, while a further 18 cases relate to unpaid non-domestic rates under Regulation 12 of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989.
Liability orders allow the council to take further enforcement action, which may include deductions from wages or benefits, bailiff action, or bankruptcy proceedings.
The Herald will provide further updates following the hearing.
News
Reimburse charities for NI rise, say Welsh Conservatives

CHARITIES not-for-profits, and voluntary organisations in Wales face mounting financial strain due to an increase in employer National Insurance (NI) contributions, prompting calls for government intervention.
The UK Labour Government’s decision to raise employer NI contributions has drawn sharp criticism from the Welsh Conservatives, who warn that the move will place an undue burden on charities and voluntary groups. While public sector bodies such as the NHS and local councils will receive compensation for the additional costs, charities providing essential services under local authority contracts will not be reimbursed.
A survey by the Welsh Council for Voluntary Action (WCVA) found that 84% of voluntary organisations are concerned about how they will manage the NI increase.
Senedd debate on reimbursement
Next week, the Welsh Conservatives will bring forward a Senedd debate urging the Welsh Labour Government to press Westminster for financial support for Welsh charities, not-for-profits, and voluntary organisations. The motion argues these groups should be classified under the Office for National Statistics’ (ONS) definition of public sector employees to qualify for reimbursement.
Welsh Conservative Shadow Secretary for Economy, Energy, and Welsh Language, Samuel Kurtz MS, said:
“Welsh charities, not-for-profits, and voluntary organisations play a vital role in delivering public services that the most vulnerable in society depend upon.
“Labour’s decision to increase employer National Insurance contributions will have a detrimental impact on the future and viability of these organisations.
“The Welsh Conservatives are clear: Labour must ensure that Welsh charities, not-for-profits, and voluntary organisations are reimbursed for this rise in employer National Insurance contributions.”
Sector voices concern
The WCVA has also warned that the NI increase could put crucial community services at risk.
A WCVA spokesperson said: “WCVA is deeply concerned about the impact of increased Employers’ National Insurance contributions on voluntary sector organisations across Wales. Many of these organisations already face significant financial pressures, and this increase threatens to put additional strain on their resources and potentially jeopardise vital services delivered to communities.
“We have strongly urged both the UK and Welsh Governments to recognise the invaluable role the voluntary sector plays, especially in partnership with public services. We believe it is critical for voluntary organisations delivering public services to be treated equitably and included in any financial support measures, ensuring they are not disproportionately disadvantaged by these policy changes.
“WCVA welcomes the debate in the Senedd and hopes it will lead to productive discussions and practical solutions to protect the voluntary sector’s essential contribution to Welsh society.”
Motion to be debated
The Senedd motion, set for debate next week, states:
- Notes the UK Government’s increase to employer National Insurance contributions, coming into effect for the 2025-26 tax year.
- Recognises the detrimental impact the increase will have on Welsh charities, not-for-profits, and voluntary organisations.
- Calls on the Welsh Government to make urgent representations to the UK Government to ensure that these organisations delivering public services are included in the ONS-defined public sector category and are reimbursed for the rise in employer National Insurance contributions.
The debate will determine whether Welsh Labour will push for financial support to shield the voluntary sector from these additional costs.
News
Local Authority is ‘hoarding cash’ as Council Tax rises by 9.35%, says MS

DEMANDS FOR REFORM AS COUNCIL’S £83 MILLION RESERVES REVEALED
PEMBROKESHIRE residents are bracing for a 9.35% council tax rise, despite local authorities across Wales holding more than £2 billion in reserves. The increase, among the highest in Wales, comes as families struggle with soaring living costs and a series of consecutive tax hikes.

Local Senedd Member Paul Davies has called for urgent reform, criticising the Welsh Government’s Local Government Funding Formula and urging councils to use their reserves to ease the burden on taxpayers.
‘UNFAIR AND UNSUSTAINABLE’
Mr Davies said: “Under the Welsh Government, the Local Government Funding Formula remains broken.
“It cannot be right that people in Pembrokeshire face such a huge increase in their council tax while councils across Wales are sitting on over £2 billion in usable reserves.
“The Welsh Government must do more to keep council tax as low as possible by encouraging the use of reserves, improving efficiency within councils, and promoting the sharing of resources across council boundaries.”

CALLS FOR CHANGE
The Welsh Conservatives have consistently opposed large council tax increases, calling for an independent review of the Local Government Funding Formula. They argue that councils should:
- Use reserves to reduce tax rises.
- Improve efficiency by cutting unnecessary spending.
- Increase cooperation between councils to share services and lower costs.
RISING RESERVES, RISING BILLS
For years, Pembrokeshire had the lowest council tax in Wales, but after a 12.5% rise in 2024-25, it has surged significantly. Despite this, Pembrokeshire County Council holds £82.6 million in usable reserves, equivalent to 28.4% of its annual service expenditure.
In 2016-17, the council held just £47 million in reserves, rising to £83 million in 2021-22. Critics argue that this surplus should be used to relieve financial pressures rather than imposing further tax hikes.
With councils under fire for hoarding cash while demanding more from residents, pressure is mounting on the Welsh Government to overhaul funding and prevent further unaffordable rises.
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