Wales’ first minister Mark Drakeford said the pilot would “see whether the promises that basic income holds out are genuinely delivered” in people’s lives. He said a pilot would “need to be carefully designed to make sure that it is genuinely adding income for the group of people we are able to work with”.

He added: “It’ll have to be a pilot because we don’t have all the powers in our own hands to do it on our own.

“It’ll have to be carefully crafted to make sure that it is affordable and that it does it within the powers available to the Senedd. We need to make an early start on designing the pilot to make sure that we have the best chance of operating a pilot that allows us to draw the conclusions from it that we would all want to see.”

What is basic income?

Basic income schemes give every citizen a fixed sum at periodic intervals, whether they are employed or not, or have savings. The idea is that this money is enough to live on, but the money can be spent however the individual chooses.

Supporters of basic income schemes say the money provides a safety net for people who are unemployed or have irregular work. In other cases, people would be able to study or retrain, safe in the knowledge that they would have enough money to maintain a decent standard of living.

Other benefits of basic income schemes include less bureaucracy and being cheap to administer as means-tested benefit schemes are notoriously complex and labour intensive to run. Basic income schemes can also reward unpaid contributions such as childcare or other caring responsibilities.

Various versions of basic income schemes have been trialled in other countries. For example, in Finland 2,000 unemployed people were paid €560 (£480) per month for two years. Researchers found the scheme made people happier and less stressed, but didn’t help them find work.

Wales’ future generations commissioner Sophie Howe said: “Signalling basic income as a priority for the new government is an incredibly significant commitment by the first minister to tackling Wales’ poverty and health inequalities – which cause lasting damage to the health and prospects of individuals, families and communities.

“It’s a huge moment for the campaign, which I’ve been proud to be a part of, and the growing support for a fairer way of allowing people to meet their basic needs.

“The current system isn’t working – Wales’ commitment to exploring a basic income once again proves it’s often the small countries that can be world leading and make the biggest changes.”