Home World News DWP statement on whether Universal Basic Income could replace Universal Credit

DWP statement on whether Universal Basic Income could replace Universal Credit

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Universal Basic Income to help Covid-19 crisis has been ruled out - here's why

The idea of a universal basic income – a Government payout for all, whether they’re working or not – has resurfaced during the coronavirus pandemic, but will it actually happen?

Shadow chancellor John McDonnell had previously said Labour would try out a universal basic income to replace Universal Credit.

And in its manifesto for the December 2019 General Election, the Green Party promised to replace Universal Credit with a new universal basic income by 2025.

It would have given a weekly payment of £89 for everyone – regardless of employment status – and replaced the current benefits system.

But the Conservatives won the election so those political pledges were left by the wayside and in February, plans to trial a UBI in Hull were dashed

Since then, coronavirus and the restrictions introduced to control its spread have taken a huge toll on Britain’s economy.

So a number of MPs have again been asking for a UBI to help hard-hit households get back on their feet.

Among them, Neil Grey, Scottish National Party MP for Airdrie and Shotts, said the UK Government was opting for “bureaucratic support schemes instead of a far simpler universal basic payment with a longer view towards universal basic income.”

Stephen Farry, Alliance MP for North Down, and Beth Winter, Labour MP for Cynon Valley, have also been asking for UBI to be launched.

The demand for a new basic income scheme has prompted the DWP to outline its official position on such an idea.

Therese Coffey, Secretary of State for Work and Pensions, issued a statement on the calls, telling MPs: “There is a variety of analysis on universal basic income. The latest report I saw estimated it would cost over £400 billion a year.

“It is not targeted at the poorest in society and is not an appropriate way for us to try to distribute money. Instead, our schemes are focused on making sure that the poorest do get help.”

Mr Farry disputed the costings and said the initiative could be supported through changes to the taxation system.

However, it has since emerged that Spain is to become the first European country to bring in a basic income.

The Spanish government says up to a million families would receive the new benefit, expected to cost up to 3.5 billion euros a year.

The amount of money each eligible family receives will be adjusted according to their household income and assets, Business Insider reported.

The launch of the initiative was speeded up by the impact of the coronavirus pandemic.

Back in March, more than 170 MPs and peers had written to the Government calling for a universal basic income as Covid-19 began to take hold of the UK.

The cross-party letter to Chancellor Rishi Sunak called for “innovative and bold solutions” to the coronavirus crisis, suggesting that UBI would give everyone the financial support they need.

It continued: “The app-based driver is not paid when there is no work. Nor is the zero-hours warehouse worker, the children’s entertainer or the agency-supplied care worker.

“Many people do not have employers incentivised by the Government to keep paying them. A universal basic income would be far more effective than subsidising company payroll.”

A recent article in The Church Times has argued that UBI should be introduced as part of Britain’s recovery from coronavirus.

In it, Third Church Estates Commissioner Dr Eve Poole said: “Looking forward to a post-Covid, post-Brexit Britain, the future looks bleak for the financially vu­ln­er­able. Even the less vulnerable may now be cautious about post-lockdown spending, just when the economy most needs a boost.

“My proposal is for the UK gov­­­­­ernment to introduce a year of universal basic income (UBI), which would provide both cushion and spending power.

“Those who do not need it should be invited to do­­nate it to a charity of their choos­ing, because charities in the UK are suf­fer­ing unprecedented falls in in­­come, and many are set to close.”

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