John Fuller, who leads South Norfolk Council and is a friend of Boris Johnson, told Newsnight that the cash could encourage people to contract Covid-19. The deadly illness has killed 130,000 across the UK since February last year.
The comments came as the BBC show investigated whether access to the payments – made to people who otherwise could not afford to take time off work – needed to be increased to reduce transmission of the virus.
“Let's flip it the other way around,” said Mr Fuller, an OBE. “Let’s not have a system whereby if you catch Covid you get £500. That’s an incentive to actually spread the disease and that’s not in anybody’s interest.”
Apparently stunned by the suggestion, host Kirsty Wark intervened for clarification. “Are you really saying that?” she asked.
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“What I’m saying is that let's not have the incentive,” he replied. “I didn’t say it was. Let’s not have an incentive that would encourage people to catch the disease.”
But his comments about the self-isolation payments were immediately criticised by the Thursday night show’s other guest, Labour mayor of the Liverpool City Region Steve Rotheram, who pointed out that 70 per cent of people who apply for the support are rejected.
“Nearly 130k people have died of Covid in the last year alone because of his party’s handling of the pandemic,” he later added on Twitter. “What an insult.”
Others were even blunter. “Tories think its all about money because that is all they care about,” wrote one person on Twitter.
It is not the first time Mr Fuller has caused controversy. In November last year the 53-year-old was reported to the RSCPA after it emerged he had posted photos on social media of apparent attempts to set fire to moles in retaliation for the creatures digging up his back garden.
In Facebook images, Mr Fuller, 52, could be seen with a propane can in a wheelbarrow, firing flames into burrows. “A great day to be killing moles,” he wrote.
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