Joseph Stiglitz, the Nobel-prize winning economist, has said that targeted programmes that help the most vulnerable in society are more important than pursuing a basic income when budgets are tight.
“The key issue on the universal wage is the budget constraints on the government,” Stiglitz said.
“The UK circumstances make a compelling case that you want your government to think more carefully about targeting programmes that help those in need, rather than universal. That’s a trade-off given the budget constraints on the public sector.”
Universal basic income is the idea of paying all citizens a flat, unconditional wage, which would likely come in place of existing social security measures like means tested benefits.
Opponents of the plan argue that it removes the incentive to work and encourages idleness. Some say it would create inflation as landlords, for example, take advantage of the higher income of tenants by forcing up rent.
Stiglitz broadly supports the idea of basic income. His book ‘The Price of Inequality: How Today’s Divided Society Endangers Our Future’ focusses on how to change taxes and regulations to address the problems of a widening gap between the rich and the poor.
He was interviewed by the shadow chancellor John McDonnell at Birkbeck College in London as part of a series of talks on economics hosted by the Labour Party, which is trying to stimulate debate around the future of economics in the UK.
McDonnell had previously said that the Labour Party would not rule out unconditional pay for all members of society.
“It's an idea we want to look at. Child benefit was a form of basic income so it's not something that I would rule out,” he said.
His comments followed a motion by the UK Green Party to table a discussion on universal basic income.
In January, Caroline Lucas MP called on the Government to commission research into the idea of paying all citizens a flat, unconditional income, which would likely come in place of existing social security measures like means tested benefits.
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