Is a flat-rate benefit for all the way to show poverty the door?
Chief reporter Martin Shipton looks at a scheme which some claim could eliminate poverty
MONMOUTHSHIRE is one of the most prosperous counties in Wales, but next week its council will debate an idea that an increasing number of people believe could provide an instant solution to poverty.
The concept of a universal income is very simple: it involves the state paying every adult a flat-rate benefit regardless of whether they work or not.
It would replace all other benefits – although there could be provision for severely disabled people to get paid at a higher rate.
Those in work would add it to their income, and they would be taxed accordingly.
For its supporters, a universal income would provide a means of ensuring that no-one is condemned to poverty or forced into taking a job they don’t want to do.
Its detractors say it is unaffordable utopian nonsense that wouldn’t lead to the social cohesion hoped for.
Whatever one may think of it, the idea is moving into the political mainstream. In Scotland, four councils are currently trialling it with grants from the Scottish Government.
Now, in Wales, a senior Labour councillor is suggesting that similar pilots could take place here.
Dimitri Batrouni, the opposition leader on Monmouthshire County Council, will seek to persuade his political opponents on the Tory-controlled authority that the idea is worth a punt.
He has put down a motion for next Thursday’s full council meeting that calls on the Welsh Government to pilot universal income in Monmouthshire.
He told me: “Since Carwyn Jones announced his intention to step down, some of the declared candidates for the Welsh Labour leadership and other AMs have stressed the need for a debate on the future direction of the party and the new ideas that could underpin it. I agree with this.
“Huw Irranca-Davies announced his leadership bid with the policy of universal childcare for all children of pre-school age. This is a policy based on sound evidence that disadvantaged children who are behind their peers upon entering primary school find it incredibly difficult to catch up.
“Yet in Monmouthshire this is not the case. Reassuringly, it has the lowest educational gap between its poorest pupils and their better-off peers at primary school age. This carries on, broadly, until secondary school.
“However, by the time those same children complete their GSCEs, the gap is the largest in Wales. This has been the case for the last four years.
“It suggests something else is going on. There are too many factors to consider, but it’s fair to say that differences in household incomes continue to have an impact as children grow up. Indeed, in a county like Monmouthshire, where income levels are quite high generally, the impact on the less-well-off children seems to get exacerbated.
“This is where universal income comes in. It is an idea that is gaining traction in many parts of the world, including Scotland. It is gaining this traction because of its early positive results. It has been, and continues to be, rigorously tested by independent academics across the world using randomised controlled tests – the gold standard of scientific research methods – in determining its effectiveness.
“From diverse places such as Canada to Namibia the positive effect on people’s wellbeing is hugely significant. The effects of this policy have varied from country to country, but among its successes includes the number of people hospitalised dropping by 8.5%, crime dropping 42% and truancy by 40%. There are many other examples.
“For the Welsh Government, this is a policy weapon that cannot be ignored. This policy offers an ability to tackle the route of poverty – a lack of money – and potentially reduce the social ills that spiral from it.
“It can also provide financial security to people in an economy increasingly based on insecure work, which we know causes significant levels of anxiety and stress.
“It can provide a source of income for people in a world where many jobs are being eradicated by new technologies, and it removes the need and cost of the out-of-date welfare system which dehumanises claimants and disincentivises people from earning more.
“Importantly, it is universal. It avoids the stigma some welfare recipients feel and circumvents the issue some voters express, namely that people earn more through benefits than working. Whether this complaint is legitimate or not, to these voters this is a significant issue. It cannot be ignored.
“While always protecting the most vulnerable in our society – severely disabled people will receive more money – Welsh Labour should not be afraid to at least look at new ideas. We should look beyond 20th-century mechanisms in order to tackle 21stcentury realities. We should embrace, not fear new ideas.
“With our commitments to tackling social injustice, promoting social mobility and seeking to eradicate poverty foremost in mind, this policy option potentially allows us to tackle all three. We should test this in Wales and see what impact it has.”
Unsurprisingly, the idea of a universal income is not universally admired. Professor Ian Goldin, of Oxford University, for example, claims its introduction would lead to ballooning deficits, that by scrapping targeted benefits and giving it to everyone, the most deserving would get less, and that by incentivising people not to work, social cohesion would get worse.