A LABOUR government would trial universal basic income (UBI) in Liverpool, Sheffield and the Midlands, shadow chancellor John McDonnell says.

Every citizen would be given a fixed sum to cover the basics whether they are rich or poor, in work or unemployed.

Mr McDonnell said people would be free to spend the cash how they like, but the intention is for it to be used to study, set up a business or leave work to care for a loved one.

Last week he was handed a feasibility report for different UBI models for low-income areas, including one in which a whole community gets basic incomes.

All the means-tested benefits – apart from housing benefit – would be taken away and every adult would pocket, for example, £100 per week, plus an additional £50 for each child they have.

Mr McDonnell said pilots would be worth it as the “social security system has collapsed” and a “radical alternative” should be tested out. He insisted that Labour would “get the design right.”

“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.

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

Elsewhere in the world, trials have been held in Kenya, Finland and the United States, as well as potentially being explored in four Scottish cities.

Some critics fear that UBI would be too expensive or would turn into a subsidy for bad employers to pay poverty wages.