Universal basic income for the UK? Labour's McDonnell to push for flat-rate payment for all

Barely a day after Switzerland voters rejected a proposal to introduce the Universal Basic Income, the UK's Labour party has said that it is considering backing a similar system in Britain. The move will effectively see the implementation of a flat-rate payment to all. Means-tested benefits will be a thing of the past.

The party's shadow chancellor John McDonnell is expected to be present at the launch of the report from Compass, a left-wing campaign group in the House of Commons on Monday 6 June evening. The report looks at why such a system is needed in the UK and how it could be introduced.

In addition to McDonnell, Labour MPs Jonnie Reynolds and Baronness Ruth Lister will also be present to "discuss the growing demands for a UBI and how it could be introduced in the UK", together with the report's co-authors Howard Reed and Steward Lansley.

According to the Guardian, McDonnell has said that the UBI is "an idea Labour will be closely looking at over the next few years." He said the research on UBI "makes an interesting case for a universal and unconditional payment to all, which could prepare our country for any revolution in jobs and technology to come." The UBI will be paid to everyone, regardless of whether they are in work or not.

The Compass report says: "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." It 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."

Compass director Neal Lawson backed the UBI insisting that the current welfare state system is based on out-of-date assumptions. "The collapse of a welfare system based on men working in a job for life, combined with the arrival of technology that could replace much of the work that is left, is forcing all politicians to examine basic income as the big policy idea of our time."

A UBI system however is expected to be very costly. The Joseph Rowntree Foundation charity, which supported the research, noted that shifting immediately to a UBI system would be "prohibitively expensive and create too many losers among the poorest families," the Guardian reports.

The authors of the report, Howard Reed and Stewart Lansley however think otherwise. The two economists said that a transitional system could be set up for just £8bn per year. This system would keep several means-tested benefits in place.

In addition, the tax-free personal allowance currently at £11,000 would be removed and tax rates would be increased. However, every adult will receive a payment of £71 a week that includes £51 for pensioners and £59 for children.

Swiss voters overwhelmingly rejected a proposal to introduce a guaranteed basic income for all in a referendum held on Sunday 5 June. Final results show that nearly 77% opposed the plan with only 23% for the move. Switzerland is the first country to hold such a vote on the issue.