We are clearly living in unprecedented economic times. While the chancellor’s £300bn-plus support package to businesses is to be welcomed, this does not directly help those laid off, the self-employed and members of the gig economy.

Universal basic income has gained in popular interest in recent years — the unconditional transfer of money from the state to individuals. While there have been several UBI experiments globally, none of these have been on a large scale. If we assume that basic needs could be met with payments of £7,000 per annum for a non-pensioner adult (£583 per month) and £3,500 per annum for a child (£291), this would cost the government around £25bn per month.

Given the potential vast scale of hardship that could arise in the next few weeks, we need to move quickly. This means minimal bureaucracy and no means testing — a UBI that could be paid to everyone. The registers of national insurance numbers and child benefit claimants already exist. Of course, there would be some leakage and no doubt some degree of fraud, but the need is simply too great.

With those in work receiving a significant windfall, this could be largely dealt with by increasing income tax rates temporarily. If all income tax rates were increased by 50 per cent (eg, the 20 per cent rate becoming 30 per cent), this would raise roughly £8bn per month to offset the cost.

The PAYE system ensures that this adjustment takes place in real time so that broadly those in work would receive the benefit of UBI immediately, but also see their pay reduce. There would of course be winners and losers, but these temporary measures are all about protecting those with the most urgent need.

Mortgage holidays and eviction-free periods need augmenting with the cash for day to day living. With the new tax year about to start, I would urge the chancellor to be bold, and add this relatively easy-to-implement package to his audacious corporate ones.

Steve Jeffels

Alliance Manchester Business School, University of Manchester, UK

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