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Politics

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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Health

NHS Covid Pass to enter large scale events and nightclubs to be introduced

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Next month, people in Wales will need to show an NHS Covid Pass to enter nightclubs and attend events.

The move has just been announced by the first minister today (Friday 17th September).

According to the government, the measure is being introduced to control the spread of Covid in Wales, where cases are now at an all-time high.

Despite the increase in cases, the alert level will remain at zero for the next three weeks, and no new restrictions beyond passes will be introduced.

The First Minister is urging everyone to work from home whenever possible and to get fully vaccinated.

First Minister Mark Drakeford said: “Across Wales, coronavirus cases have risen to very high levels over the summer as more people have been gathering and meeting.

“Tragically, more people are dying from this terrible virus.

“The very strong advice we have from our scientific advisers is to take early action to prevent infections increasing further.

“The last thing we want is further lockdowns and for businesses to have to close their doors once again. That’s why we must take small but meaningful action now to control the spread of the virus and reduce the need for tougher measures later.”

On October 11, the NHS Covid Pass requirement takes effect.

All people over the age of 18 will need to have a pass to enter:

  • Nightclubs
  • Indoor, non-seated events for more than 500 people, such as concerts or conventions
  • Outdoor non-seated events for more than 4,000 people
  • Any setting or event with more than 10,000 people in attendance

It means concerts and large scale sports events will now require the passes.

People who are fully vaccinated in Wales can already download the NHS Covid Pass to securely show and share their vaccine status.

It also allows people to show they have had a negative lateral flow test result within the last 48 hours.

Mr Drakeford continued: “My message to you today is a simple but serious one – the pandemic is not over and we all need to take steps to protect ourselves and our loved ones.

“We have high levels of the virus in our communities and while our fantastic vaccination programme has helped stop thousands more people from becoming seriously ill or dying, the pressure on the NHS is increasing.

“We hope introducing the requirement to show a COVID pass will help keep venues and events – many of which have only recently started trading again – open.

“Showing a COVID Pass is already part of our collective effort to keep businesses open with some major events, such as the successful Green Man Festival, using it.

“We will continue to work closely with all businesses affected to ensure a smooth introduction and operation of this system.”

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News

Crucial council meeting debating former Chief Executive’s pay-off cancelled

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AN EXTRAORDINARY meeting of Pembrokeshire County Council supposed to take place next Monday has been cancelled.

Pembrokeshire County Council was due to meet on Monday morning to debate the controversial settlement agreement between the local authority and former CEO Ian Westley.

In a circular sent to all councillors late on Wednesday afternoon, however, officials told councillors: ‘There are a number of issues that have recently come to light which are unable to be resolved ahead of the meeting and it is essential that Members have the fullest information and be correctly advised in order to consider the matter before them.’

Those issues might be open to speculation; they could range from the relatively trivial to the vital.The meeting would have taken place before Councillors received the full report into the circumstances of Mr Westley’s departure from Audit Wales.

Former council CEO Ian Westley

That report’s content is also strictly under wraps , and the Council has not yet received the full and final report.

Individuals named in it received copies of sections of the report dealing only with them earlier in the summer. That process’ purpose was to allow those named to respond to comments made by others regarding them and dispute findings of fact with which they disagreed.

The row over Mr Westley’s departure has been followed by the Monitoring Officer’s resignation and the Head of Legal’s absence on long-term sick leave. The HR director is currently seconded to ERW, the regional education consortium.

Each of those officers will have had some involvement in the events leading to Mr Westley’s departure and the signing of the Settlement Agreement between him and their employer.As the person who led the negotiations for the Council, its Leader, Cllr David Simpson, is also likely to feature in the report.Legal issues surrounding the confidential terms of the settlement agreement (bar the pay-out’s amount) meant the scheduled meeting was to take place behind closed doors.

That’s not an unusual step in itself. Meetings regarding HR matters – for example, discussions about the appointment of the new CEO – are routinely held in private.

Allegation and counter-allegation about what happened flew around the Chamber in meetings earlier this year, with one or two councillors appearing suspiciously well-briefed.

Therefore, the question arises as to what confidence those concerned can have councillors will keep their traps shut after a behind-closed-doors meeting or not try to spin its content one way or another to suit their own or others’ agendas.

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News

Stephen Crabb’s Preseli constituency could cease to exist following boundary changes

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PRESELI Pembrokeshire MP Stephen Crabb is looking at an uncertain future. At the next election, boundary changes could mean that his constituency will cease to exist.

The Preseli area is being split up and divided between Ceredigion and South Pembrokeshire, according to a leaked report.

The move comes as the number of MPs representing Wales is reduced by eight.

Wales’ proposed boundary changes have been leaked a day earlier than expected by the Guido Fawkes website.

The new constituencies are expected to come into force at the next General Election expected to be in May 2024.

Despite Wales losing 20% of its representatives the number of MPs across the UK will stay the same, at 650.

England’s allocation of MPs will rise from 533 to 543, while the number of MPs in Scotland will be reduced from 59 to 57, and in Northern Ireland the figure will remain at 18.

As well as publishing its final proposals tomorrow, the Boundary Commission will open an 8-week consultation period where the public can share their views on the proposed constituencies.

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