A £20 billion universal basic income (UBI) scheme giving a family of four £10,400 a year would be financially feasible for the UK Government, cut poverty by more a third and could be introduced in the coming months, according to a report published yesterday.

The study, by the campaign group Compass and the London School of Economics, worked out £60 a week could be given to all adults under 65, and that children could be given £40 each as an emergency measure if a situation, like the coronavirus pandemic, arose.

The report said the illustrative scheme would cost around £20bn a year net – take the UK back to a level of social security spending slightly less than in 2010 – and would would be paid for by changes to the tax system.

“Meeting the gross cost of the scheme would need tax adjustments. The most important of these would be the conversion of the current personal income tax allowance into a cash payment and a small rise in existing tax rates,” it explained.

“The personal allowance costs a huge £110bn but is of no benefit to those with low earnings and those not in paid work.”

A basic income is a guaranteed, regular, no questions asked cash payment made to all eligible residents as a right, regardless of their income or employment status. It is not means tested and is not withdrawn as individuals enter work or raise their earnings. Depending on its level, it would replace some existing benefits, though much of the existing social security system would remain, including disability, maternity and housing benefits.

There has been growing support for a UBI scheme since the Covid 19 crisis began. The Compass paper said that in the UK, 84% of the public now support the introduction of the policy.

Last month Spain announced an ambition to roll-out a form of basic income, both to help mitigate the impact of coronavirus and as a ‘permanent instrument’.

Recent reports have suggested that, in the UK, 28% of adults have already experienced income loss, and that adults with young children are prominent among the groups hardest hit by the fall-out from Covid-19. A quarter of British firms temporarily closed, and the expected recession is set to be much deeper than that from the 2008 financial crisis, with predictions of a rise of 2 million in the number of unemployed in the next few months alone.

First Minister Nicola Sturgeon has previously indicated her support for UBI, but said it would need to be brought in in collaboration with the UK Government, as many of the powers, including over the personal tax threshold, remain reserved. Earlier this week she said she would be pressing the UK Government on the issue. The UK Government is opposed to the policy, although some 100 MPs and peers signed a letter this week calling for the idea as a recovery measure.

The Scottish Greens’ Alison Johnstone said: “The UK’s welfare system has been proven to be full of holes during this crisis, so it’s no wonder that more and more people are realising the value of a basic income for all.

“While I think we can be bolder than bolting on an income floor to existing systems, I welcome this report as part of a positive discussion and the wider direction of travel towards a proper safety net which guarantees a UBI.”