BRITAIN should sell off assets – including its stake in the Royal Bank of Scotland – and hand £10,000 to everyone in the country when they turn 25 in a radical move to end inequality, a leading think-tank has proposed.

The Institute for Public Policy Research (IPPR) suggested creating a “Citizens’ Wealth Fund” to give every young adult in the UK a lasting stake in the economy.

It insisted the cash pool could be worth £186 billion in a decade if it was started in 2020/21 – helping to tackle some of society’s most challenging social problems.

It comes amid growing interest in the idea of a basic income for all citizens, with the Scottish Government pledging to fund research into the scheme last year.

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The move, which differs from the IPPR’s one-off “inheritance” proposal, would see everyone paid a flat, unconditional income in place of the current work-related benefits system.

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Glasgow, Edinburgh, Fife and North Ayrshire councils all submitted applications to the Scottish Government last week to be among the first to explore piloting the radical plans.

The left-of-centre IPPR said its proposal would help tackle what it described as growing inequality in the UK, "giving everyone a stake and a say in the economy".

The multi-billion pound fund would be capitalised using a mix of asset sales, capital transfers, new revenue streams, a small amount of borrowing and returns reinvested through the decade, a report by its Commission on Economic Justice said.

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If more cash was made available, the one-off payment could even be made to people born outside the UK who have had citizenship for a certain length of time.

The think tank suggested the fund should be managed independently but held accountable by Westminster, which could set any ethical obligations and an investment mandate.

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Carys Roberts, a senior economist with the IPPR, said: "Who owns wealth and who will inherit wealth is becoming more important – increasingly so as the share of national income paid to people through wages declines.

"A Citizens' Wealth Fund would enable citizens to collectively own a portion of our national wealth, and make sure everyone benefits from rising returns to capital, not just people who will inherit or who already own assets."

But supporters of introducing a universal basic income insisted a one-off payment would fall short of the transformational change required to shift the balance between rich and poor.

Robin McAlpine, director of the think tank Common Weal, sits on the Scottish Government’s citizens' income stakeholder group.

He said: “Any steps or moves which help address inequality across Britain are to be welcomed, but I tend to think we need a more fundamental change than a one-off payment.

"I’m inclined to think that if we’re going to spend that money, we would be better trying to design a new system – rather than a one-off gift model.”

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A basic income of £5,200 for every adult has previously been suggested, but it is understood Glasgow, Edinburgh, Fife and North Ayrshire will now take around 18 months to develop plans for their respective pilot schemes.

A Scottish Government spokeswoman said: “We are absolutely committed to reducing the deeply ingrained inequalities that exist across Scotland.

“At its root this is an issue of income inequality, which is why we are shifting the emphasis from dealing with the consequences to tackling the underlying causes.

“The citizens wealth fund as proposed by IPPR is very different in nature to the Citizens’ Basic Income system.

"We are looking closely at international examples of the Citizens’ Basic Income and are offering funding and support to the four local authorities that have been identified to test this policy in Scotland, which will be available this year, to help them scope their potential pilots.”