19 May 2014

‘Raise minimum wage’ – Labour’s new pledge

A Labour government will raise the level of the national minimum wage over the course of the next parliament to close the gap on average earnings, says Ed Miliband.

Unveiling Labour‘s new policy, Ed Miliband will say that there should be a “clear link” between the minimum wage and the earnings of other workers to ensure those at the bottom of the pay scale do not get “left behind”.

The radical plans to raise low pay are a break away from the current system, whereby the minimum wage is tallied to how the economy is doing.

Earnings have lagged behind inflation since the financial crisis, which has pushed Britain into a recession: Mr Miliband is due to say this has left those earning the minimum wage lagging behind other earners.

The plans are an attempt to build on the achievement of the last Labour government which introduced a national minimum wage after Tony Blair’s landslide general election victory in 1997, Mr Miliband will tell party activists in the West Midlands in a speech that will outline his policy.

We have to go further, we have to write the next chapter in the history of Labour’s battle to make work pay Ed Miliband

The move is likely to be welcomed by some critics in the party who have complained that Mr Miliband has so far failed to set out a positive vision of what a Labour government would offer to voters. However he can expect to come under fire from business groups, amid fears that it will drive up costs and damage competitiveness.

The Labour leader is reluctant to give the detail of what level the new minimum wage would be and said he would only set out a “precise ambition” until nearer the general election next year after research has been carried out.

But he will publish a report he commissioned from Alan Buckle, the former deputy chairman of KPMG International, with proposals to overhaul the Low Pay Commission. It will set out a new framework for the commission with a five-year target and a strengthened role in tackling poverty and raising productivity.

In his speech, Mr Miliband will describe Labour’s introduction of the original minimum wage as “one of the proudest achievements of any British government”, but will say further action is now needed to raise its value and restore its ambition .

“Britain is still one of the lowest paid countries among the world’s advanced economies. So we have to go further, we have to write the next chapter in the history of Labour’s battle to make work pay,” he will say.

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