£280billion
That’s how much Labour could spend under its grand plan to put EVERYONE on benefits
LABOUR will roll out plans to put every adult in Britain on benefits, John McDonnell said yesterday.
The shadow chancellor said he was pushing to get the idea of a ‘Universal Basic Income’ in the Labour manifesto, despite warnings it would destroy the incentive to work and be prohibitively expensive – as much as £280billion a year.
The proposal, which has been fashionable in Left-wing circles for years, would involve the state making a fixed monthly payment to every citizen, regardless of whether they are in work or not.
Supporters claim it would cut poverty and end the stigma attached to means-tested benefits.
But critics point out that enormous tax rises would be needed to pay everyone a worthwhile income.
Ontario, in Canada, yesterday pulled the plug on a pilot scheme after deciding it was unsustainably expensive. Finland also abandoned an experiment with the policy in the spring.
But Mr McDonnell, who has flirted with the idea for years, yesterday said Labour would proceed with a scheme.
He said: ‘It’s one of those things I think we can get into the next manifesto and see, it’s worth a try. There have been pilots elsewhere. I’m trying to wait for the feedback.’
Former Tory minister Nick Boles described the idea as ‘ dangerous nonsense’.
He added: ‘It’s typically clueless of Labour to take up the idea of Universal Basic Income just when Finland has abandoned their experiment with it.
‘What the British people want to see is an economy that creates good jobs which pay decent wages – not larger handouts for people who don’t work.’
Fellow Tory MP Julian Knight warned the proposal would create ‘a huge disincentive to work and a slap in the face for those who work long hours to keep a roof over their heads and feed their families’.
Conservative MP Andrew Bridgen described the plan as the ‘economics of the madhouse’, adding: ‘ I’m not surprised Labour want to give away more free money. It used to be called buying votes.
‘The Labour Party are always generous with other people’s money – but they always run out of it.’
The Green Party campaigned for a minimum payment of £72 a week before the 2015 election, but dropped the idea from its manifesto because of the ruinous cost, which was estimated at £280billion a year.
Funding a scheme on this scale would require the Government to hugely increase income tax.
By way of comparison, the Treasury collected £180billion from income tax last year and £55billion from corporation tax. Labour could claim that overhauling all existing welfare payments – which cost the Exchequer almost £220billion a year – would go a long way to funding a Universal Basic Income. Labour yesterday declined to say what level it would set the basic income at. Sources said details of the scheme were being worked on by Mr McDonnell’s economic adviser Guy Standing. Proponents of the scheme argue that it would provide a solution to the so-called ‘rise of the robots’, as automation threatens the jobs of millions of workers.
Mr McDonnell has spoken out in favour of the idea repeatedly in the past. Last year he said it was ‘one of the ideas that a lot of people are pressing for’.
The new government in Ontario in Canada yesterday scrapped a £90million basic income scheme.
Lisa MacLeod, the Ontario minister responsible for social services, described the threeyear project as ‘quite expensive’, adding: ‘Spending more money on a broken program wasn’t going to help anyone.’