Orkney and Shetland MP, Alistair Carmichael, today challenged the Chancellor to consider the possibility of a Universal Basic Income for the duration of the coronavirus crisis. Speaking in a virtual session of Parliament following a statement by the Chancellor on further government action to support the economy and business, Mr Carmichael highlighted the concerns of self-employed and small business owners in his Northern Isles constituency and suggested that a universal support scheme would boost confidence for those falling through the cracks.
Questioning the Chancellor remotely, Mr Carmichael said:
“As the Chancellor says these schemes were designed at pace, but I have to tell him that here in the Northern Isles our economy is predominantly based on small businesses. Every day it becomes more apparent that there are just too many people falling through the gaps, especially the self-employed, people working from home, people relying on directors’ dividends.
“If it is just too difficult to design a scheme to help all these people, will the Treasury look seriously at the idea of a Universal Basic Income? Yes, it might risk handing cash to people who don’t actually need it, but that might be clawed back through the tax system and it will give help to people who are desperate for it now.”
Responding, the Chancellor of the Exchequer said:
“I don’t agree with the Universal Basic Income but I do believe that our schemes benefit many many millions of people, particularly the self-employed scheme which will benefit over 3.5M people who need it. And indeed the new “bounce back" loans will also be available to those in self-employment for those with business accounts as well.”
Reacting after the exchange, Mr Carmichael said:
“I was disappointed by the Chancellor’s response today. A UBI scheme could be constructed for the current crisis and it would be a quick and easy way to get cash to people who may otherwise be left with nothing. It could be time limited for the duration of this crisis although there may be opportunities to learn lessons for application in the medium to long term.”
“I also noted concerns about those reliant on dividend income. There is no point in furloughing employees if employers are not supported in keeping their businesses going. Furloughed employees cannot resume their employment after the crisis if their employer goes out of business.”