Jeremy Corbyn will use a speech in London on Thursday to announce that Labour will research the radical policy of universal basic income, which would replace means-tested benefits with a flat-rate payment.

Some on the left see the idea, which would guarantee every citizen a taxpayer-funded income, as the best way to protect low-paid workers against the insecurity of today’s labour market.

Corbyn will say: “Technological changes and the so-called ‘gig economy’ can mean increased insecurity and uncertainty across our society. It is one of the reasons I am looking at policies that can help provide more security for working households.

“One such possible answer may be the often-discussed suggestion of a universal basic income.”

He said the party would research and test the policy, which has won the backing of Labour MPs from different wings of the party, including former shadow transport minister Jonathan Reynolds. The shadow chancellor, John McDonnell, has already said he is examining the idea, which seeks to tackle inequality.

Corbyn, who will speak at the London headquarters of Bloomberg, the news organisation, as the hard-fought Labour leadership race enters its final days, will argue that the existing economic model fails to deliver for many in Britain. “The responsibility of government is to protect citizens from these growing uncertainties in our economy, not exacerbate them as the Conservative government have done,” he will say. He will also highlight McDonnell’s pledge of a £500bn boost to public investment.

Since winning the leadership a year ago, Corbyn has repeatedly promised to rebuild Britain’s economic model to make it fairer, but few details have emerged about how he would change the welfare system.

Basic income is also regarded as a potential solution to the risk that many lower-paid workers find themselves out of a job as a growing number of tasks can be performed by robots.

Neal Lawson of Compass, a thinktank, which has championed the idea, said: “Even if the robots don’t come, our labour market is so precarious that as it is, it isn’t working. That’s why we need basic income.”

A full-blown basic income is regarded by most economists as prohibitively expensive; but a recent Compass report on the issue argued that a transitional system could be created at an annual cost of £8bn a year, which would leave many means-tested benefits in place.

The tax-free personal allowance, currently worth £11,000, would be abolished, and tax rates would rise; but every adult would receive a payment of £71 a week – or £51 for pensioners – and £59 for children. The authors claim such a system would cut child poverty by 45%, and that 60% of those in the bottom fifth of the income distribution would gain more than 20%.

Corbyn’s challenger, Owen Smith, will accuse him of putting more than half a million jobs at risk in defence, manufacturing and energy industries, in a final pitch for trade union votes in the party leadership election.

Corbyn’s aim to end fossil fuel extraction and decommission Trident would risk many hundreds of thousands of jobs, Smith will argue. “For all of Jeremy Corbyn’s claims, his policies would put hundreds of thousands of union members’ jobs at risk and lead to a devastating decline in the UK’s industrial base,” Smith will say on Thursday.

The former shadow work and pensions secretary will visit defence and energy industry workers across the UK, starting in Scotland at the Rosyth Naval Dockyard, where the final assembly of the Royal Navy’s two new £6bn flagship aircraft carriers is taking place.