A THINK tank co-founded by former Tory leader Iain Duncan Smith says the poorest people in the UK would be worse off under a system of universal basic income than they are on universal credit.

The controversial claim has come from the centre-right think tank the Centre for Social Justice (CSJ). Duncan Smith brought in the much-criticised universal credit (UC) when he was work and pensions secretary.

The Scottish Government has already launched universal basic income (UBI) pilots in cities including Glasgow and Edinburgh and it has also been championed by shadow chancellor John McDonnell as a way to eradicate poverty.

However, CSJ head of policy Edward Davies said the most disadvantaged households would receive less than half the sum they do under universal credit and that UBI could be a massive disincentive for people to find work.

“The idea of universal basic income is absurd,” he said. “The entire point of welfare is to provide a safety net for the most vulnerable, while at the same time, empowering them climb back out of poverty. Universal basic income would riddle that safety net with holes.”

Davies claimed UBI supporters fail to understand the true nature of poverty, which he said was not caused simply by lack of money but also numerous social factors.

He added: “Without addressing how an individual becomes poor, no amount of money will offer a long-term solution to their situation.”

The report said UBI payouts could be no higher than £6200 a year per adult without “bankrupting the exchequer”. It said universal credit provides a single unemployed parent with two children more than double that at £16,750 a year.

Duncan Smith said: “A basic income in the UK would require a giant tax hike for all, hurting those on the lowest incomes the most. It would send businesses fleeing the country in droves and would bankrupt the exchequer. Fans of a basic income also assume robots will replace jobs. Some jobs will go and new jobs will take their place. Basic income is a direct disincentive to retrain, upskill and seize new opportunities.”

The CSJ report was disputed by the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA), which called for more UBI trials to replace the “failed universal credit experiment”.

Director of action and research Anthony Painter said: “The universal credit experiment is failing and

the wider welfare state is riddled with complexities and underpinned by draconian sanctions. Basic income is no magic bullet, but with Labour exploring the idea and the Scottish Government looking to pilot it, UBI is increasingly seen as one plausible response to modern economic insecurity.”