Is the Covid £500 self-isolation payment idea really as ‘mad’ as has been suggested?

I assumed that ministers would be quick to contradict the suggestion in a leaked Department of Health paper that Matt Hancock’s “preferred position” is that everyone testing positive for coronavirus in England should receive a £500 payment to help them self-isolate. 

But George Eustice, the environment secretary, said on Sky News this morning: “No decisions have been made on this. But this is a dynamic, fast-moving situation with the pandemic. We are always keeping multiple policies under review.”

Perhaps that was just the safest thing to say, because ministers are discussing options for trying to get more people to isolate, but it doesn’t deal with the obvious flaw in the plan. If the government is going to hand out that kind of cash to people who test positive, it gives an incentive to catch the virus. There were reports early on in the pandemic of young people in the US holding coronavirus parties, like chickenpox parties for children, in the belief either that the virus was a hoax or that it was worth getting it over with and acquiring immunity. 

I was expecting Eustice to say that of course his colleagues at the Department of Health weren’t suggesting something quite so perverse. There would have to be, at a minimum, some kind of check on people to ensure that they had actually isolated themselves before they could get the money.  

Yet that is where the plan runs into problems, because it is not at all clear how the authorities would do such a thing. In Hong Kong and South Korea, the government tracks people’s phones and calls them to confirm that they are with their phone. The British government is understandably reluctant to take such powers – even though I suspect most people would be perfectly happy to subject themselves to intrusive surveillance. 

On the other hand, people on benefits are already entitled to claim a £500 Test and Trace Support Payment if they are asked to self-isolate by NHS Test and Trace, and it’s not clear to what extent the NHS Covid-19 app polices self-isolation.  

There are other problems with the plan, not least that it hasn’t been cleared with the Treasury, which would have to pay for it. It was reported this morning that the Treasury was “flummoxed” by the suggestion, and a source told Politico: “First we’ve heard, and frankly a mad idea.” 

According to the Department of Health paper leaked to The Guardian, paying £500 to everyone who tests positive would cost about half a billion pounds (the assumption would seem to be that a million people would claim it, therefore). It would seem more likely that, if the £500 payment were extended beyond people on benefits, it would be restricted to those who cannot work from home and who earn less than the national average, which would reduce the cost to about £120m – another option set out in the Department of Health document.  

Once the proposal is redefined in this way, and the emphasis is shifted to support for isolation rather than “payment for testing positive”, it begins to seem sensible, provided the problems of enforcement can be solved.  

Certainly, the cost seems modest in comparison to the vast sums spent on the furlough scheme, and rather better focused on something that might make an immediate difference to the spread of the virus, which – as ministers keep pointing out – is still vitally important over the next few months before the vaccination programme offers the hope of a way out.