Reviving Struggling Towns

Continuing yesterday's attempt to solve pressing social problems, I've been thinking about towns that are hit by mass unemployment when a key business around which the town was built goes to the wall, such as Port Talbot. Over-reliance on one sector is a perennial problem when technology moves at a fast pace.

When a town faces mass unemployment, the usual solution is the dole. But what if, instead, we introduced Universal Basic Income (UBI) for a set period, or even permanently, and backed it with government support for local businesses? Here’s a look at the pros and cons of this idea.

Universal Basic Income: A Short-Term Boost UBI would provide a regular, unconditional payment to all residents, giving them financial stability.

Pros:

• Boosts spending: People with money will spend locally, keeping shops and services afloat. 
• Encourages investment: Some may invest in education, retraining, or even new businesses. 
• Reduces financial stress: UBI provides security, allowing people to think long-term.

Cons:

• Risk of inflation: More money in circulation without enough goods can drive prices up. 
• Temporary fix: Once UBI ends, the town may return to its struggles without job creation.
• Reduced work incentives: Some might opt out of seeking work if they’re receiving a steady income.

To complement UBI, the government could build business premises and offer enterprise zone loans, providing affordable workspaces and low-interest loans to businesses.

Pros:

• Attracts businesses: Cheap premises and loans could encourage businesses to set up and create jobs. 
• Job creation: New businesses mean more employment opportunities for local residents.

Cons:

• Empty infrastructure: There’s no guarantee businesses will move in, leaving government investment underutilised. 
• Uncertain success: Even with support, businesses might struggle if the local economy remains weak.

Balancing the Risks

The idea of combining UBI with business incentives offers a potential path to recovery for towns hit by unemployment, but it’s not without risks. UBI stimulates short-term spending, while business support aims to create long-term jobs. However, inflation, lack of business uptake, and potential wasted investments are real concerns. Success would depend on careful planning and execution, but it’s a creative alternative to relying solely on handouts.