Shadow chancellor John McDonnell has insisted he can “win the argument” on universal basic income – a radical idea to transform the welfare state – within the Labour party.

In an interview with The Independent, following a rally at Ealing Town Hall, the Hayes and Harlington MP said the policy could tackle issues related to poverty and simplify the welfare state.

Universal basic income would involve ditching means-tested benefits in favour of an unconditional flat-rate payment to all citizens, whether they are in work or out of work.

When asked whether he would fight the next general election on a platform that advocates the radical policy, Mr McDonnell, who is also chairing Jeremy Corbyn’s campaign to remain Labour leader, responded: “I think we’ve got a long way to go in developing the proposal and the argument but I think we can win the argument on it."

Mr McDonnell added that he would “make sure we take into account the experiments that are going on at the moment, developing the ideas that the Fabian society have put forward”, before campaigning on the issue.

“What people are anxious about at the moment is around levels of poverty increasing, levels of inequality and at the same time people not being able to get some of the basics in life and that’s why there are large numbers of people turning up at foodbanks,” he added.

“The Fabian society has just introduced a report today which is looking at reforms to the welfare state and it’s recommending a form of initial basic income for us to explore so we’re going to take that into account. When we look at the experiments that are taking place across Europe at the moment we’ll review those then consider what are options are.

“The reason I’m interested in it goes back a long way. I was at the TUC when we were campaigning with Child Poverty Action group to bring in child benefit… child benefit is a form of basic income. So I think there are opportunities there that it could simplify the welfare system but in addition it could tackle the issues around poverty.”

Earlier this year, Switzerland voted by an overwhelming majority to reject proposals for a universal basic income.

Other experiments, however, are currently being carried out around the world. In the Canadian province of Ontario, plans to trial the concept are underway after a budget statement declared: “As Ontario’s economy grows, the government remains committed to leaving no one behind.”

Speaking backstage after the rally in west London, Mr McDonnell also attempted to alleviate tensions at the top of the party’s ranks.

Asked whether Tom Watson’s position as deputy leader would be tenable should Mr Corbyn win the election later this month, he responded: “Tom is deputy leader, he’s directly elected and he’ll make a major contribution to the party in the future – we’ve worked together in the past and we’ll work together in the future”.

Labour leadership contest: Jeremy Corbyn vs Owen Smith Show all 8 1 /8 Labour leadership contest: Jeremy Corbyn vs Owen Smith Labour leadership contest: Jeremy Corbyn vs Owen Smith Jeremy Corbyn and Owen Smith clash at a leadership hustings in Gateshead, where Mr Smith was scarcely able to answer a question without being booed by Mr Corbyn’s supporters PA Labour leadership contest: Jeremy Corbyn vs Owen Smith “Jeremy himself admitted he was seven out of 10 in terms of his faith in the European Union. He said it,” said Mr Smith during his second live debate with Jeremy Corbyn Getty Labour leadership contest: Jeremy Corbyn vs Owen Smith Ballot papers are currently due to be sent out on 22 August and returned a month later, with the result being announced at a special Labour conference on 24 September Getty Labour leadership contest: Jeremy Corbyn vs Owen Smith Jeremy Corbyn supporters cheer and wave placards as the Labour Leader addresses thousands of supporters in in Liverpool, England Getty Labour leadership contest: Jeremy Corbyn vs Owen Smith Labour Party leadership candidate Owen Smith poses for a picture with supporters during a picnic for young members in London Fields, Hackney in London Getty Labour leadership contest: Jeremy Corbyn vs Owen Smith The Labour leader has a spring in his step at a leadership rally in Sunderland Screenshot Labour leadership contest: Jeremy Corbyn vs Owen Smith Labour leadership contender Owen Smith delivers a speech at the Open University in Milton Keynes, where he promised to reverse Conservative cuts set to leave millions of low paid workers thousands of pounds a year worse off PA Labour leadership contest: Jeremy Corbyn vs Owen Smith Shadow Chancellor John McDonnell has urged Owen Smith to distance himself from those saying they want to split the Labour party Getty

“We’ve had differences of views in terms of whether there’ll be a leadership election or not but that will be overcome. Once the leadership decision is made, we’ll unite”.

The shadow chancellor also said Theresa May's 14-point lead in the polls was “inevitable... after what we’ve gone through the last few weeks”.

He added: “We were matching the Tories in the polls – remember when Jeremy got elected, in a number of polls we were 10 points behind.

"We then, in six months, had matched the Tories in the opinion polls – some of them we were overtaking. But what we’ve been through in the last few weeks, it’s understandable that people are losing confidence because they won’t vote for a disunited party.