Labour considering backing universal basic income as official party policy

John McDonnell is looking into the feasibility of a universal basic income (UBI) for all citizens as part of Labour’s alternative to the Chancellor's austerity model.

In the clearest indication yet that the party is seriously considering the radical policy, which provides every citizen with a flat-rate income, the Shadow Chancellor will on Monday evening appear at the launch of a report on UBI from the left-wing campaign group Compass.

A source close to the Shadow Chancellor told The Independent: "The concept of a UBI is one among many ideas that has been put to the party in our wider policy review over recent months.

"It is not official Labour party policy or a commitment towards becoming policy.

"It's just an acknowledgement that there's clearly a policy discussion on this matter taking place in think tanks and among academic circles outside the party and we are following the debate as it unfolds."

It comes as Switzerland voted by an overwhelming majority to reject proposals for a universal basic income, according to projects based on a partial count of the vote. Had it passed, anyone legally residing in Switzerland would have received suggested basic income of 2,500 Swiss Francs (£1,755) every month whether they worked or not.

The new report, Universal Basic Income: An idea whose time has come?, adds: “Central to the case for a UBI is the way it would help prepare us for a world in which the new technological revolution, driven by artificial intelligence and robotics, will, over time, transform the nature of work and the type and number of jobs.

“A UBI offers a powerful way of protecting all citizens from the great winds of change to be ushered in by the fourth industrial age, and of sharing the potentially massive productivity gains that it will bring.”

Such a policy, according to the economists who authored the report, would pay a tax free, unconditional and non-contributory basic weekly income to “every individual as of right, irrespective of how much they earned or their work status”. It would also aim to replace, in part, the existing welfare system and involve a “profound revolution in the way income support is organised”.

In February Mr McDonnell said he was considering universal basic income as part of Labour’s new economic policy. “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 during a talk at the London School of Economics.

In what he called a “progress report” on Labour’s economic policy, McDonnell said that economists were “close to consensus” that the Conservative Party’s austerity policies had failed.

“Austerity is a political choice and it's politically easy because it benefits the elite. It's a short term choice,” he said.

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.

“The basic income offers genuine social security to everyone and sweeps away most of the bureaucracy of the current welfare system,” Lucas said.