In a speech at Islington Town Hall to mark the start of Living Wage Week, Mr Miliband will say that Labour is making a campaign for companies and businesses to pay the living wage of a minimum of £7.45 an hour a key area of the party’s policy review.He is expected to say, ‘Just as in the 1990s, the minimum wage was a signature achievement of the last Labour government. So in the coming years, the living wage will be central to our work.’
New rates set today have been raised by 25p an hour to £7.45 outside London and £8.55 in the capital.
The current minimum wage is £6.19 for workers over 21, £4.98 for over-18s and £3.68 for 16 and 17-year-olds.
Labour is proposing introducing Living Wage Zones, with councils working with groups of businesses to raise wages from the minimum wage to the Living Wage and with central Government offering employers financial incentives to do so.
Another idea is that Government should insist that businesses that are on contract with them should commit to becoming Living Wage employers.
Nineteen Labour councils have either signed up to or pledged to introduce the Living Wage for their employees.
Unlike the minimum wage the Living Wage is not legally binding, but is based on the cost of living.
Mr Miliband will quote research by the Institute of Fiscal Studies which shows that for every £1 spent in the private sector in increasing pay to the level of the Living Wage saves Government 50p on tax credits and benefits and taxes.
Living Wage employers also report improved morale, lower turnover of staff, reduced absenteeism, increased productivity and improved customer service.
Starting this month the Living Wage Foundation will set the annual rate of the Living Wage in November each year.
It has also launched an accreditation scheme for employers who will now be able to display a kitemark to show that they are a Living Wage employer.
So far 140 employers have signed up to be a member of the accredited scheme.
Employers who sign up to the scheme should implement the new rate as soon as possible following the annual announcement and within 6 months.
