Iain Duncan Smith has rejected suggestions that workers should be given a universal basic income during the coronavirus pandemic, arguing that it would be a “disincentive to work”.
The former work and pensions secretary said the proposal, floated by Labour leadership candidate Rebecca Long-Bailey on Wednesday, was also “unaffordable”.
Under the proposed policy, people would receive a universal flat payment to help cover their living costs during the pandemic. Ms Long Bailey’s proposal is for the rate to be set at the living wage.
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But Sir Iain, said his think-tank the Centre for Social Justice had “ran the numbers” and found that the cost would amount to an “astronomic amount of money” – with a basic payment costing the Treasury around £260 billion a year.
He suggested that the delayed Universal Credit scheme, his main legacy at the DWP, would be a better alternative and “was designed with just such critical moments in mind”.
“One proposal being pushed around at the moment is the redundant idea of a Universal Basic Income,” Sir Iain wrote in an article for the Telegraph newspaper.
“Let me say now, it’s unaffordable, impractical, produces massive disincentives for people to work and most importantly won’t make any difference to poverty in this country.
“And even if that weren’t enough, this would not be the moment for such a massive upheaval of our welfare system.”
Sir Iain said the taper rate of his own Universal Credit system should instead be lowered to pay more money to people who lose hours due to the pandemic and “put a floor underneath employees as government steps in and takes the strain”.
Writing in The Guardian on Wednesday, the Shadow Business Secretary Ms Long-Bailey called for “a fixed payment made to all, providing everyone with a basic minimum income of at least the real living wage, for the duration of the coronavirus pandemic”.
She said the system would “assist employers, who would then top up salaries to the level a worker currently earns” and “would provide a basic protection to all, and guarantee much needed consumer spending power to help keep people and businesses afloat through the crisis and until we recover”.
She added: “This country is facing an unprecedented shock: it’s time to move mountains. We must actually do whatever it takes to keep people safe and financially supported. People deserve nothing less than the same level of reassurance that the government has already afforded to business.”