Rebecca Long-Bailey urges Boris Johnson to bring in universal basic income to help Brits through coronavirus crisis
The Government should hand everyone in Britain a fixed payment regardless of what they earn to ease the "unprecedented" economic shock of the coronavirus outbreak, Rebecca Long-Bailey has said.
The Labour leadership contender backed calls for a universal basic income (UBI) as she urged the Government to "move mountains" to support those affected by the spread of the disease.
But former Cabinet minister Iain Duncan Smith - a key figure behind the existing Universal Credit welfare system - warned that UBI was a "redundant" idea that would create "massive disincentives for people to work".
Boris Johnson on Wednesday told MPs that UBI was "one of many" suggestions being looked at as ministers try to respond to the economic impact of Covid-19, although ministers have suggested tweaks to the current tax and welfare system are more likely.
A Downing Street spokesperson said: "As we have been clear, we will work with trade unions and business groups to urgently develop the most effective support for people's incomes and jobs over the coming days, and we are listening to what people have to say.
"Our priority is to work up solutions that can be delivered quickly, are effective and reach the right people. This includes through the current welfare safety net and in particular benefits like Universal Credit."
Ms Long-Bailey said the state of the existing social safety net - with built-in delays to Universal Credit payments and "very low levels of statutory sick pay" - made the case for UBI.
Writing in The Guardian, the Shadow Business Secretary said: "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, would also assist employers, who would then top up salaries to the level a worker currently earns. It 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."
And 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."
IDS: BASIC INCOME 'UNAFFORDABLE'
But Sir Iain, the former Work and Pensions Secretary who introduced Universal Credit, dismissed calls to bring in UBI, which he warned would encourage Brits to stop working.
"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," he wrote in The Telegraph.
"And even if that weren’t enough, this would not be the moment for such a massive upheaval of our welfare system."
The Ex-Tory leader said the scheme could cost an "astronomic amount of money", much of which would go "towards middle and higher income earners".
He added: "At a time when our NHS needs more ventilators, should we really be subsidising higher earners to the tune of £16,000 each? Worse still, UBI has not got any of the inbuilt incentives to encourage people to get in to work, stay in work and increase their earnings and hours."
'FULL-BLOWN ECONOMIC CRISIS'
The debate over a UBI came as the Resolution Foundation think tank said the coronavirus epidemic had now become a "full-blown economic crisis" that would hit low earners "most swiftly"
"Less than one-in-ten of those in the bottom half of earners say they can work from home, making it much harder for them to protect their incomes in the face of social distancing measures," the think tank, which is headed up by former Ed Miliband adviser Torsten Bell, said.
They added: "Those in the most at-risk sectors and occupations also have less to fall back on, being around 25 per cent more likely than average to live in families with no savings at all."
The think tank has called for a major expansion of statutory sick pay to employees who currently earn less than £118 per week and are ineligible for the state help.
They are also urging a new 'Statutory Retention Pay' scheme to keep staff asked to stop working formally employed by their firms "with a significant amount of their pay covered by the state".
And the Resolution Foundation said the Government should beef up out-of-work support in the Universal Credit welfare system to £100-a-week, a rise of one-third. That move would cost the Treasury £10bn over a year, according to its analysis.
PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe