Labour would trial universal basic income if it wins power, John McDonnell reveals

Posted On: 
12th May 2019

A Labour government would trial a radical scheme of paying every citizen cash regardless of their wealth, Shadow Chancellor John McDonnell has revealed.

The scheme could be piloted in Liverpool, Sheffield and the Midlands.
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A universal basic income, which would see everybody receive a fixed sum of money to cover basic living costs, could be piloted in Liverpool, Sheffield and the Midlands, he explained.

Mr McDonnell revealed the new policy to the Sunday People after he received a feasibility report on the measures earlier this week.

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He said: “Of course it’s a radical idea. But I can remember when I was at the trade unions campaigning for child benefit. And that’s almost like UBI.

"You get a universal amount of money just based on having a child. UBI shares that concept. It’s about winning the argument and getting the design right.”

If the model was introduced, all means-tested benefits apart from housing benefit would be scrapped and replaced with the basic income.

Households would also receive a further cash boost for every child they have.

Under the pilot projects, individuals would receive a certain amount of cash each week to spend how they like, but Mr McDonnell hopes they would study, establish businesses or leave work to care for a loved one. 

Other countries to have tried the policy include Kenya, Finland and areas in the United States. 

Critics of the scheme believe it would be too expensive or unrealistic in its goals. But Mr McDonnell said the social security system had "collapsed" and a "radical alternative" was needed.

“If you look at the Finland pilot it says it didn’t do much in terms of employment but did in terms of wellbeing – things like health. It was quite remarkable," he said.

“The other thing it did was increase trust in politicians, which can’t be a bad thing.”