Anti-Poverty, UBI, & Social Partnership

A Safety Net For All

Helen Cunningham

This policy paper advocates key actions that a Welsh Labour Manifesto could commit to going into the 2021 elections. It focusses on practical measures, primarily within the remit of the existing devolution settlement, to support people in Wales to escape the poverty trap and to enable everyone to have a decent standard of living.

Almost one in four people in Wales live in poverty. Key drivers pushing people into poverty in recent years are wage stagnation, rising living costs and pernicious Conservative welfare reform policies. Our manifesto needs practical actions to reduce the material hardship facing many people in Wales; actions that target those most in need at a time when the next Welsh Government will face extraordinary budgetary pressures. The importance of polices that direct resources and support to people who are struggling the most cannot be overstated.

Fair Work

Work significantly reduces a person’s chances of being in poverty, but it is not a guarantee against it. Half of all households living in poverty have one person who in work. The effects of low pay and insecure work persist and drive down living standards. To tackle this, the recommendations of the Fair Work Commission contain cornerstone actions to deliver fair work in Wales. The geographic spread and availability of good quality work in across Wales is a key factor in reducing poverty. 

Our 2021 Welsh Labour manifesto should commit to:

• Prioritising Social Partnership legislation – This was proposed in the fifth Senedd term and should be carried though.
• Explore expanding the number of Living Wage Employers in Wales – This could be done through using incentives and an example of a good beginning would be building on Cardiff Council’s model as a Living Wage city.
• Better Jobs Closer to Home – This should build on learning from the existing pilots proposed by the Wales TUC and delivered under the Valleys Taskforce. It should continue to make use of reserved contracts to stimulate good employment opportunities in the places that require them the most.

Housing

There is not enough quality housing to ensure that everyone lives in a decent home. The Renting Homes Act 2016 includes provisions for fitness for habitation which should be enacted. Rent increases in both private and socially rented homes have outstripped increases in earnings over the last few years, pushing more families into poverty. While the building of new social housing by registered social landlords (RSLs) is welcome, its cost should not be borne by existing social tenants.

 Our 2021 Welsh Labour manifesto should commit to:

• Cap social rent increases at Consumer Price Index (CPI) inflation so that rents do not outpace wages or benefits. Rent controls should also be explored.
• Reform housing finance to ensure existing tenants do not bear the cost of new homes.
• Lobby for devolution of the existing Discretionary Housing Payments powers and budget from the Department for Work and Pensions and devolution of the Winter Fuel Allowance to allow the Welsh Government to target it at those most in need
• Enact the provisions of the Renting Homes Act 2016 in respect of fitness for habitation
• Build enough affordable homes to meet Wales’ projected housing needs over the next five years. This should be achieved through empowerment of local councils to make full use of their powers and borrowing capacity to build homes and bring empty homes back into use for social rent. This would include a review of all programmes that help to achieve the target geared towards people on low incomes and first-time buyers, including what proportion of Help to Buy schemes should be can be included in meeting the affordability element of the target.  

There is scope for the current Council Tax regime to tackle housing costs and better work for a fairer housing settlement. It currently provides a 25% discount to anyone living alone, regardless of wealth or means. The council tax take of local authorities across Wales varies considerably and the issue of second home ownership and its effects, especially in parts of north Wales, have been highlighted by the pandemic. 

Our 2021 Welsh Labour manifesto should commit to:

• Reviewing the 25% single person discount element of the current council tax system and consulting on more progressive uses of council tax discount schemes.
• Scope mandating 100% council tax on second homes (currently discretionary) and stronger methods to target second home ownership.

Welfare, benefits and support

Although welfare and benefits sit principally with the UK government, there are elements of social security and support that are within a Welsh remit i.e.  Discretionary Assistance Fund, housing support, Education Maintenance Allowance, school costs support. Making full use of these and increasing support where people are currently slipping through the net can help tackle poverty in Wales. Easier access to this support through “passporting” eligibility will be important for ensuring ease of access to people who need the most support. 

Our 2021 Welsh Labour manifesto should commit to:

• Create a Personal and Family Emergencies Fund – Replacing the DAF and based on eligibility rather than discretionary system. This fund would make cash support available for a maximum period (six weeks) when a household’s income falls unexpectedly to substantially below Universal Credit levels (i.e. benefit errors/appeals, unpaid wages, family crises) and they have no alternative resources  

Of the 700,000 people living in poverty in Wales, 180,000 of them are children. Support to families through the education system is a key lever in tackling child poverty. The Child Trust Fund introduced by the last UK Labour government created a government-backed investment in every child in the UK. 

Our 2021 Welsh Labour manifesto should commit to:

• Creating a Schools Start Fund – Bringing together nutritious free school meals, schools uniform grant and healthy start vouchers under one scheme. Eligible to any child whose family receives Universal Credit and families with no recourse to public funds.
• Increasing the value of the Education Maintenance Allowance for young people to £45 as it has not increased in value since the mid-2000s.
• Scoping a Welsh Child Trust Fund – learning lessons from previous schemes, scope a fund that invests from Welsh children from the day they are born, with a higher amount invested for children from lower income families

The current childcare offer helps many families but there are some gaps in provision for children under 3, for parents who do not work, or work less than 16 hours a week and for parents who work irregular hours. Low-income families, especially low-income women, and BAME families are less likely to meet the requirements of the current childcare offer. 

Our 2021 Welsh Labour manifesto should commit to:

• A New Childcare Offer – consisting of 16 hours a week free childcare, available from age 9 months to school age for 48 weeks a year. Free before and after school and part-time holiday childcare for 48 weeks of the year. Available for all children whose families chose to take it up.

Transport

Decent public transport is part of a universal basic infrastructure that enables people to live a good life. Individual increases in someone’s personal wealth will be always be constrained by their capacity to maximise its benefit if, for example, essential services such as their local bus services are threadbare. The universal, shared benefit of investing in these collective goods should guide our manifesto commitments and actions.  Public transport is a lifeline to those without private transport. It is used more by people on low incomes, young and retired people and disabled people. 

Our 2021 Welsh Labour manifesto should commit to:

• Review the capacity for re-regulation of bus services in Wales, including a provision of a core network and times across the whole of Wales – dovetailing with existing and proposed Active Travel routes
• Create a two-tier charging system of flat fees for travellers on long and short journeys
• Scoping a fully integrated Welsh transport system, with single ticketing across multiple modes of public transport.

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Universal Basic Income

Beth Winter MP

The Covid-19 pandemic has laid bare the extent of poverty and inequality in our society.  A recently published report by the Joseph Rowntree Foundation (JRF) found poverty rates in Wales further increased because of the effects of the Covid-19 pandemic. The report revealed that low pay, unaffordable housing and a lack of childcare were factors trapping 700,000 people in poverty, including 180,000 children. By June of this year around 400,000 people in Wales had fallen behind on their bills, with 200,000 falling behind on rent or mortgage payments, and during the course of the pandemic many jobs have been lost. 

This pandemic has exposed the inadequacies of our welfare system to act as a safety net for people, from the insufficient level and restrictiveness of Statutory Sick Pay (SSP) to the five-week waiting time for Universal Credit (UC). The JRF report found that by August the number of Universal Credit claimants in Wales had almost doubled from the start of the year. 

We, in Wales, are facing a very damaging recession, as well as ongoing economic insecurity. We must do everything we can to achieve a fairer and more resilient society and economy as we come out of this pandemic. A vital part of this will be to replace our dysfunctional benefits system with one that provides financial security for all. 

Universal Basic Income (UBI) – an unconditional and regular cash payment to everybody regardless of their income or situation – is gaining significant traction as a solution to many of these issues. It is underpinned by the principle of universality, which I very much support, to provide everyone with enough to cover the basic cost of living and financial security. 

UBI has a number of merits, as follows: 

• Most notably, it meets the human right that everyone should have an appropriate amount of money on which to subsist
• It overcomes the negative features of means-testing like stigma
• It is simple unlike the complex current welfare system
• It stimulates demand in the economy by putting money in people’s pockets and thus could help avoid a deep and prolonged recession. 

According to a recent opinion poll 84% of people support the introduction of UBI and a petition submitted to Parliament in 2020, in support of UBI, had over 114,000 signatories. Where pilots of the scheme have taken place, they have shown benefits in terms of people’s confidence, health and financial well-being.

While UBI does have cost implications, some of these can be recouped through additional tax revenues as the economy grows from the effect of the stimulus. We could call for a ‘People’s Quantitative Easing’ with the Bank of England putting money into the economy to help pay for it, as they did in 2008 and are doing again now. Another option would be for the UK government t borrow and pay some of the debt back afterwards, through progressive taxation. This would ensure that the highest earners didn’t benefit from UBI in the longer-term. And, of course, they could close some of the 1,156 tax reliefs in the UK, many of which disproportionately benefit the wealthiest households. 

It is recognised that UBI will need modifying to ensure that those with greatest need retain additional benefits including cover for housing costs, childcare and disabilities. It needs to gain public acceptance of some changes in taxation to pay for it and cannot be viewed in isolation from other welfare benefit reforms required nor as a panacea for all economic ills.  I urge the Welsh Government to work with others to explore ways in which it can implement recommendations made by the recently published JRF report, to establish a clear, effective and fair Welsh benefits system which complements the social security system, that already exists in the UK.  

UBI is gaining increasing support at a UK as well as a Wales level. At a UK level, I have been appointed as a Co-Chair of the recently established Cross-Party Parliamentary and Local Government Working Group on UBI. This is an innovative structure consisting of cross-party MPs, Local Authority Councillors, Metro-Mayors, Peers and LGA Officers. The aim of the group is to influence the wider debate around UBI and social security in the UK. Within the UK Labour Party, a Labour for a UBI group was launched at the Labour Party Conference this year – a platform through which to garner support within the Labour movement for the idea of UBI. While the Labour Party has not publicly endorsed UBI, it has not rejected it and I was encouraged by Keir Starmer’s comments on considering UBI when he was recently interviewed on the Andrew Marr show.

Here in Wales an increasing number of organisations and politicians are expressing their support for UBI, including the Future Generations Commissioner, who considers it very real solution to helping people out of poverty and aiding the economy, while reducing society’s gaping inequalities. I am encouraged to see the First Minister Mark Drakeford say he’s been interested in the idea of a basic income for forty years, and that “we’re up for playing our part in such an experiment”. I welcome the passing of a backbench Senedd motion supporting a trial of UBI in Wales. The Welsh Government appears open to explore this further although it had stated that it couldn’t happen without UK Government cooperation. 

We clearly need a benefit system that ensures that everyone has equal access to a financial safety net that is adequate for their needs, along with a progressive taxation system that helps to pay for it. This should be at the forefront of Labour Party policy and action over this next period if we are serious about overcoming poverty and inequality in our society.  

To this end, I call on the Welsh Government to include in its Senedd Election 2021 manifesto a commitment, building on the Senedd Motion passed on 30/09/2020, to:

(i) In principle, support for UBI 

(ii) Establish a UBI trial in Wales

(iii) Lobby the UK Government for funding to establish a Wales-wide UBI.

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Fair Work and Social Partnership

Mick Antoniw MS

Our Welsh Labour Government has a credible and progressive record of supporting workers’ rights through policy and legislation. It is a record that we as Welsh Labour Party members can be proud of.

Although employment is not a devolved responsibility, but rather a reserved matter for the UK Government, it has nevertheless been able to support workers in a number of important areas.

When the UK Tory Government abolished the Agricultural Workers Board, the Welsh Government, working with Unite the Union, passed its own Agriculture Wales Act which restored rights and collective wage negotiations to some 13,000 Welsh agricultural workers. With the Trade Union Wales Act, it protected the rights of tens of thousands of Welsh public sector workers. Through other Welsh legislation, zero-hours contracts have been abolished in the care sector, and, through various policy initiatives, it has opposed the blacklisting of trade union members and promoted workers’ rights through the procurement system.

As part of his Welsh Labour leadership manifesto, Mark Drakeford committed to delivering a Social Partnership Act. This would put the Welsh partnership of trade unions, business and government on a statutory footing and would use government procurement as a lever for promoting its socio-economic duties by establishing fair work and ethical standards of employment. In addition, he gave a commitment to support the enactment of Section 1 of the Equality Act 2010 to promote socio economic equality.

It is very encouraging that, despite the demands of Covid and EU Exit legislative time, the government is proceeding with the Section 1 implementation and is progressing with the drafting of a Social Partnership Bill to be completed and published before the end of the Welsh Senedd term. 

The Bill will only be as good as the strength of its commitment to fair work. It must recognise the vital role collective bargaining plays in delivering Welsh Government socio-economic objectives.

The Bill must include:

• the use of procurement to achieve ethical standards of employment and fair work in order to advance the socio-economic wellbeing of the people of Wales
• recognition of the importance of collective bargaining as a means of achieving socio economic improvement
• the importance of monitoring how procurement is delivering these objectives
• enforcement
• recognition of the importance of engagement with workers and their trade unions in order to achieve the wellbeing objectives

It is important that the Welsh Labour Manifesto for the 2021 contains a clear commitment to ensure the passage and subsequent implementation of the Social Partnership Bill at the earliest opportunity during the next Senedd term.

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