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John McDonnell has revealed a Labour Government will trial universal ­basic income.

Cities earmarked for pilot schemes include Liverpool and Sheffield, the shadow chancellor said.

UBI means every citizen receives a fixed sum, usually enough money to live on, whether they are rich or poor, in work or unemployed.

The radical-sounding idea has been tried in countries ­including Kenya and Finland and even in parts of the US.

And the shadow chancellor was this week handed a feasibility report for its application in Britain.

Under Labour , pilot ­projects would give everyone in designated areas a certain amount of cash every week – ­regardless of their income.

(Image: Ian Vogler/Daily Mirror)

They can spend it 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.

Mr McDonnell said: “I’d like to see a Northern and Midlands town in the pilot so we have a spread.

“I would like Liverpool – of course I would, I’m a Scouser.

“But Sheffield have really worked hard. I’ve been involved in their ­anti-poverty campaign and they’ve done a lot round the real living wage.

“I think those two cities would be ideal and somewhere in the Midlands.”

Different universal basic income models could be tested in 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.

They would also get an additional £50 for each child they have.

(Image: Getty)

Mr McDonnell 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.”

Universal basic income is a hot ­debating topic for ­economists and philosophers and has fans and critics both on the left and on the right.

The concept has been around since at least the 1960s and was mentioned in the 1972 US ­presidential election.

A UBI scheme called the Manitoba Basic Income Experiment was ­introduced in Winnipeg in 1975.

A similar fund was set up in Alaska in 1976, letting every citizen benefit from royalties from the oil industry. It began paying all state residents in 1982 and the scheme is still running.

By 2018 the UBI fund was worth 113 per cent of Alaska’s GDP and yielded an annual return of 10 per cent.

The largest pilot launched to date is running in Kenya and is funded and implemented by the non-profit ­organisation GiveDirectly. It provides a basic income for 21,000 villagers and will be monitored for the next 12 years. Finland intended to pilot a similar trial in 2017 but was unable to apply the cash to every community and ­resident.

Instead the government handed a basic monthly income of £480 to 2,000 ­unemployed for almost two years.

The primary aim of the scheme was to promote employment but as data is still being evaluated it is ­impossible to say if it worked.

(Image: Getty)

In the UK, charity Citizen’s Income Trust has been ­encouraging debate for 35 years.

Some critics fear that UBI would be too expensive.

John Kay, former director of the Institute for Fiscal Studies, said: “If you do the numbers, either the basic income is ­unrealistically low or the tax rate to finance it is unacceptably high. End of story.” But Mr McDonnell is ­convinced of the benefits.

He said: “Ed Miliband is really keen we commit to a couple of pilots in the manifesto but we will have to argue that out. We want to do it in areas that have been hit hard by austerity.

“The reason we’re doing it is ­because the social security system has ­collapsed. We need a radical ­alternative and we’re going to examine that.

“We’ll look at options, run the pilots and see if we can roll it out.

“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.”