The six important questions posed by Mark Drakeford’s enthusiasm for universal basic income
With his authority enhanced but his retirement looming, Mark Drakeford’s early priorities in this parliament tell us much about what he would like to see as his legacy.
Early clues emerged in the reshuffle with a key ally leading the Social Justice portfolio and a new mega-department called Climate Change but extending into housing, transport and energy.
What is more, Labour’s manifesto was light on new pledges which means the party now has a mandate, few commitments and largely a clean slate from which to develop policy. This is the kind of scenario that sounds more like a First Minister simulation game than reality.
If we assume that Mark Drakeford stands down during this term in a way that allows a new First Minister to gain some momentum ahead of the next election, the most one would imagine he could serve would be three and a half years.
That means there is little time to lose. The big policy ideas have already started with a commitment to trial universal basic income (UBI). But this policy raises some interesting questions.
What if it works?
The Welsh Government has the scope to trial the system but not the financial levers to roll it out comprehensively.
That then leads to the question, why trial it? If that trial is unsuccessful then there will be some run of the mill criticism over the waste of funds from the opposition parties. If the trial proves a success, then what happens next?
Will Welsh Government use it as an argument for greater devolution of powers, or as a grievance to ratchet up the grumbling about UK Government? Either way, it has neither the scope to introduce a full UBI scheme or an apparent strategy to persuade UK Government to allow and finance such a project.
Even the most enthusiastic of UBI advocates must surely see this as a problem. When the details of the trial are announced, Welsh Government must also set out how it could be upscaled if successful.
Is there momentum behind UBI?
The First Minister’s comments in a Greatest Hits Radio interview committing to a UBI pilot have been covered widely by high profile national media outlets. Yet, it should be noted this was an answer to a submitted question in a commercial radio station Q&A. It was not a set-piece announcement designed for a politically engaged audience.
Maybe that is to be encouraged as a way of breaking out of the Cardiff Bay bubble, but it also makes one wonder to what extent the Welsh Government really wanted so much early focus on this one policy.
During the interview, it is referenced that 25 Senedd members had signed the UBI Lab Network pledge to support for a pilot in Wales. This included many of Plaid Cymru’s successful candidates and also the sole Lib Dem – but only 14 of Labour’s 30 MSs.
If it had been the intention of the First Minister to ‘go big’ on UBI from day one of the new Parliament, why were the Labour Party not encouraging more members to sign up to the pledge?
It is also the case that very few outside of politically engaged circles are familiar with the concept of UBI. Any effort to win public support for the scheme is going to require considerable explanation to a sceptical public.
Why is UBI being proposed?
One reason for the increased discussion about UBI is the economic hardship resulting from the pandemic. As such, it is not entirely surprising that much of the focus has been on the perceived welfare benefits of the proposal.
Yet, it is important to draw a distinction between this short-term objective to respond to a specific predicament and the more radical reform which will be required to account for rapid increased automation and eventual artificial general intelligence.
What is the Conservative alternative?
Conservative commentary on the First Minister’s comments have treated UBI as if it is a fantastical left-wing utopian idea thought up on the back of a quinoa packet. Only weeks after dropping their opposition to free universal prescriptions, Conservatives are largely using the same argument as they deployed about millionaires getting their aspirin for free adapted to the context of UBI. Instead, a “jobs and growth led recovery” is proposed.
In one way, this is simply business as usual. Labour propose an expansion of the welfare state via tax and spend policies, Tories talk about growing the economy and increasing the revenue base as a result.
Yet, if one thinks about UBI as a potential solution to fast changing trends in the workplace, then it requires the Conservatives to offer more as an alternative. It is true, that with technological innovation in the past fears of job losses have been over-stated and new, better paid and often safer jobs have emerged.
Yet, the specific nature of intelligent automation does look to present a different challenge. It would be complacent to simply presume the workforce would adapt overnight.
One of the architects of neoliberal economic policy, Friedrich Hayek at least appeared to entertain the idea of a basic income theory. So, perhaps there has always been a reason for conservatism to find a place for a system which could simplify the benefits system, reduce administration costs, and root out the unintended peculiarities that disincentivise work.
Yet at present, the UBI narrative is largely being surrendered to the political left, though it is noted that Gwlad embraced the principle in their manifesto.
Will it lead to reliance on the state?
Liberals and conservatives should find common ground in questioning the way in which UBI could simply lead to political overreach and democratic stagnation. There is already a crude tendency to regard public sector workers as being disproportionately Labour voting because they see this as in the best interests of their personal job security.
If the whole country was paid irrespective of any required output, then would it not become a state subservient to the generosity of their masters? Every voter would have a direct financial interest in re-electing the same government.
Alternatively, an election could just become a financially irresponsible auction of each party offering higher UBI at the expense of important, but less eye-catching, public services. This prospect should give pause for thought for the legislators when designing even the trial system.
Is UBI the solution?
One of my biggest concerns about UBI is that too many regard it as the solution to a problem in itself. I think it is more accurately described as the starting point to developing a solution.
UBI can mean very different things to different people, it enjoys widespread popularity among the political class in part because it is a vague proposal and allows each political persuasion to overlay their own interpretation.
We might get a more robust debate on the merits and flaws of UBI if a counterproposal was to emerge, perhaps from the political right. That requires serious thought about the future of work and not just the short-term cost implications.