Today, Acting Leader of the Liberal Democrats Ed Davey has written to the Chancellor urging him to set up a Citizen's Income, which should act as a minimum income guaranteed to all UK adults, as part of the government's response to the coronavirus crisis.
In the letter (below) he also sets out proposals for a subsided salary scheme, a self-employed income guarantee and a boost to Statutory Sick Pay.
Acting Leader of the Liberal Democrats Ed Davey said:
"The threat the Coronavirus crisis poses to our country is the greatest many of us will have ever experienced. And every day that the government fails to take adequate action to help workers and the self-employed is another day that millions of people are worrying about how they are going to put food on the table.
"It is the Government’s duty to do everything in its power to protect those facing destitution as a result of this pandemic. That is why I am calling on the Chancellor to back these measures – measures that could be instantly deployed to help all those in desperate need during the crisis.
"By subsidising salaries for workers, guaranteeing incomes for the self-employed and boosting sick pay we can ensure that we are not only protecting our economy, but our society. That is why am I also urging the Chancellor to back a Citizen’s Income, and quickly, to ensure those most in need have financial security.
"The government must act to stop millions falling into destitution, the consequences are too great otherwise."
The text of the letter is as follows:
The Coronavirus crisis poses the biggest threat to our country since the Second World War, and as with a wartime effort, the Government must do everything in its capacity to protect those on the front-line of the crisis.
Earlier this week I welcomed the business support and credit measures you announced, but millions of individuals and small businesses remain exposed. Each day that we fail to take action, millions of workers and self-employed people get closer to irreparable damage to their livelihoods.
Tens of thousands of workers have already lost their jobs since the start of the outbreak. Those still at work relying on statutory sick pay are asked to live on a meagre £95 per week. Meanwhile the country’s five million self-employed watch as their income dries up with no reliable safety-net to catch them.
This dramatic picture requires an urgent and practical response that covers all people. That is why I strongly urge you to implement a Citizen’s Income – a targeted minimum guaranteed income – that can be introduced rapidly through four measures:
- A Subsided Salary Scheme. For vulnerable workers, loss of income is half the story. The other half is having no job to return to once the outbreak is over. That is why the Government must back firms to keep staff on their payroll by guaranteeing 80% of their salary and enforce it retrospectively, back-dating it to January 1st 2020.
- A Self-Employed Income Guarantee. Self-employed and freelance workers have fewer protections, which is why the Government must guarantee 80% of their average income over the last three years, up to a cap of £35,000.
- A boost to Statutory Sick Pay. The Government should use emergency legislation to immediately increase it from 1/3 to 2/3 of average earnings at £220 per week, and extend it to the currently uncovered 2 million workers earning less than £118 weekly.
- A Citizen's Income. For those not in work and not covered by any of the above measures, an increased benefit of £150 per week for a single person and £260 per week for couples. This should act as the minimum income guaranteed to all UK adults.
Any economic measure will mean little if the UK’s 5.8 million small businesses don’t make it through this extraordinary period. For most of them a credit line won’t be enough to stay afloat. You therefore need to help those struggling, with a three-month deferment on all business taxes, including business rates, HMRC tax payments, PAYE, VAT and corporation tax.
The coming days and weeks will shape not just our economy but our society for several years. The time calls for real solutions deployed quickly and effectively, for the benefit of all. I trust you will take any necessary measures to ensure this.
I look forward to your response.
Rt Hon Sir Ed Davey MP