Wednesday 2 December 2020 1:02 pm

Labour rules out Universal Basic Income for next election manifesto

Labour shadow chancellor Anneliese Dodds has said she will not advocate giving every person in the UK a regular lump sum payment in the party’s next election manifesto.

Dodds today told a virtual Bloomberg conference that giving regular handouts to everyone in the country, known as Universal Basic Income (UBI), “won’t work”.

Read more: Labour’s Anneliese Dodds extends public olive branch to City of London

The shadow chancellor’s comments represent one of the first times she has definitively ruled out a policy for Labour’s next manifesto.

“Some people have more extensive needs than others and they shouldn’t be missing out,” she said.

Implementing UBI would mean a complete overhaul of the benefits system, with all welfare spending scrapped in favour of a monthly or quarterly payment to everyone in the country, regardless of their means.

Democratic Presidential candidate Andrew Yang centred his campaign around a pledge to give every American $1,000 per month, calling his UBI proposal a “freedom dividend”.

Yang said UBI was needed to counter the future automation that will affect the American working class.

However, opponents of UBI say it incentivises long-term unemployment and does not target welfare where it is actually needed.

Dodds said today that she would instead be in favour of changing the UK’s Universal Credit model by reducing the time to receive initial payments.

New Universal Credit claimants have to wait five weeks for their first payment.

The only way to get support in that five-week period is to take out a government loan through the “Universal Credit advance”.

“Switching the loan in Universal Credit to a grant…would really make sense,” Dodds said.

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“People waiting five weeks for social security doesn’t make sense.

“Some people advocate for a Universal Basic Income and that all you do is take a social security budget and split it up evenly among everyone – that won’t work.”