Ed Miliband has said that the UK Government should consider substantially increasing Universal Credit payments to help low-income workers and the self-employed hit by the Covid-19 Coronavirus outbreak.
“This crisis reveals some of the gaping holes in our social safety net,” says Miliband. Whilst adding that ministers must “fix the fact that universal credit at £73 a week is simply not enough for many people to live on and risks deepening the drop in demand.”
The government has said that self-employed people who are unable to continue working due to Coronavirus can apply for Universal Credit or Employment Support Allowance if they are sick.
However, critics have pointed out that Universal Credit comes with a minimum five-week waiting period and is far less generous than the average wage, although advances may be available from day one of a new claim.
Writing in The Guardian, the MP for Doncaster North says: “Universal credit needs to be substantially increased and available immediately, to help the individuals concerned and prop up the economy.”
The former Labour leader also argues that emergency measures introduced by the Chancellor regarding access to sick pay don’t go far enough and leave self-employed people without adequate protection.
“We cannot say to the 5 million self-employed people that if they have no work or get sick, they must face the consequences alone,” he says.
“Nor can we say to the millions of workers who live pay cheque to pay cheque that £93.50 a week statutory sick pay is enough to get them through.”
He cites examples in Ireland and Denmark, where added protections have been put in place to help people weather this storm.
Ireland have introduced a temporary ‘unemployed insurance payment’ to provide financial assistance to those unable to continue working. While Denmark has gone even further, in the form of guaranteeing 75% of wages for private sector workers.
Mr Miliband writes: “In the interests of scale, speed and scope, we should turn statutory sick pay into employment retention pay, available to all those workers whose businesses have had to cease their activities or substantially reduce them as a result of the crisis – not just to those workers who are sick.
“It should be paid at a substantially higher level than now to enable families to make ends meet, either as a flat rate payment or a proportion of previous earnings, say 75%, up to a cap, as in Denmark.”
He explains: “The government would essentially be acting as a guarantor for a portion of the wages for all those businesses affected by the crisis and unable to operate. Such action would be radical, but it is necessary.”
Mr Miliband also suggests that the government could introduce “a temporary universal basic income”, adding that “nothing should be ruled out” if individuals and their families are to be helped through this crisis.
“No individual, business, worker or charity must be left to bear the risk and consequences of the economic impact on their own”, says Miliband.
“A pandemic is the ultimate collective action problem: we are in this together and it must be managed collectively by government.”