The current system of Universal Credit (UC) is buckling under the pressure of the Coronavirus crisis. Despite redeploying thousands of civil servants to process claims, the system is being overwhelmed by the increased demand.
A group of over 170 cross-party MPs and peers have signed a letter to chancellor Rishi Sunak, urging the government to introduce a Universal Basic Income (UBI) to support people struggling with the financial impacts of the Coronavirus crisis.
A UBI of £800 – £1000 a month per person would provide a basic level of security for everyone.
Sir Iain Duncan Smith MP, the architect of the UC system, has dismissed the idea of a UBI, as he believes it would be a “disincentive to work”.
A UBI would only be a disincentive to work in so far as it would allow an individual who could not currently afford not to work, the immediate financial security to prioritise their health and follow the government’s advice to stay at home.
Furthermore, an individual’s earnings would have no effect on the amount of UBI that they would receive. If they are able to continue to work then they would be better off by doing so, as they would keep their earnings (minus tax) on top of their UBI.
By definition, everyone, regardless their income, would be entitled to the same UBI. Critics of a UBI argue that some people simply do not need it as much as others. However, the amount paid to a multi-millionaire, for example, would be recovered via their tax payments. If they an organization is based off-shore or is a non-dom, they wouldn’t be eligible for UBI at all.
There are numerous added benefits. The system of sanctions under UC would end, freeing up time for the courts and tribunal service who would otherwise be dealing with social security appeals.
Under a UBI, the army of civil servants and job centre staff who process and monitor UC claims would no longer be required. A UBI would afford staff the time and space to offer advice and support to people looking for work.
A UBI gives power to employees, not employers. It would empower employees to put the health and wellbeing of themselves and their families first, by affording them the option to cease working in unsafe conditions during the Coronavirus crisis.
The significance of a shift from UC to UBI should not be underestimated. Nevertheless, a UBI would allow people to access money faster, removing the need for businesses to apply to schemes to cover wages and face inevitable delays. Most importantly though, it would provide people the option to heed the government’s advice and stay at home where they would be unable to under the congested system of UC.