Living wage: Ed Miliband pledge over government contracts

 

Ed Miliband: "Above and beyond the minimum wage we need to do more"

Related Stories

Ed Miliband has unveiled plans to deliver a "living wage" of at least £7.45 per hour for millions of people, if Labour wins the next election.

Whitehall contracts would only go to firms paying the living wage, while those who paid less could be "named and shamed", said the Labour leader.

His speech came at the start of a week of events promoting the idea.

Downing Street backed firms paying a living wage, but said restricting contracts in this way could be illegal.

Others backing the wage include the Scottish government, which says all staff will get the living wage, and London's mayor, who said it made economic sense.

The living wage - which is £7.45 per hour across the UK except for London where it is £8.55 per hour - does not have any legal force, but is part of a campaign by the Living Wage Foundation and Citizens UK.

It is considerably higher than the official minimum wage that employers must legally pay, which stands at £6.19 per hour for those over 21, £4.98 for those over 18, and £3.68 for 16 and 17-year-olds.

As part of its policy review Labour is looking at ways of making the living wage the new norm, including naming and shaming companies who do not pay the wage and introducing rules forcing government contracts to only be given to those firms who pay it.

Number 10 said the government backed a living wage and "would encourage business to take it up" but warned Labour's plans to restrict government contracts in this way could breach EU procurement law.

Mr Miliband said this was "completely ridiculous" because local councils were already showing it could be done.

What is the living wage and how is it calculated?

  • The living wage is calculated to reflect the basic cost of living and is based on the principle that work should pay enough to provide for the essentials of life.
  • It is part of a campaign led by the Living Wage Foundation and Citizens UK.
  • It is an entirely voluntary scheme for employers and the wage is updated every year.
  • The Centre for Research in Social Policy at Loughborough University calculates the rate for workers outside London. The Greater London Authority calculates the rate for those in the capital.
  • The latest annual calculation saw the wage rise by 25p from £7.20 to £7.45 for those outside London and from £8.30 to £8.55 for those in London.
  • Living wage employers are expected to implement the new rate as soon as possible, and within 6 months of the announced rise.

During his speech, Mr Miliband said: "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.

"We need to build an economy where everyone has a stake.

"Not where millions of people feel they never have a chance for a decent life however hard they work."

Employers who have voluntarily committed to pay the living wage are expected to start paying the new higher rate within six months of the announced rise.

The Scottish government, which has been paying directly employed staff the living wage since last year, has announced it will implement the rise from April 2013. This will benefit up to 3,300 workers, it said.

Speaking at the launch of the increased London rate, Mayor of London Boris Johnson said paying the wage made "economic sense" for the city by giving employees more spending power.

'Sharing fairly'

He said: "By building motivated, dedicated workforces, the living wage helps businesses to boost the bottom line and ensures that hard-working people who contribute to London's success can enjoy a decent standard of living."

Marlene Brownlee Marlene Brownlee, a cleaner with Newcastle City Council, thinks she will be £70 a week better off

If everyone was paid the living wage, the Institute for Fiscal Studies estimates, the Treasury would save £1,000 a year for every person from less spending on tax credits and from increased tax revenue.

Barclays is one of a number of major companies already paying the living wage while 19 local authorities have been accredited as "living wage employers", including Newcastle City Council.

One of those benefiting is cleaner Marlene Brownlee, who has worked at Newcastle's civic centre for 15 years and estimates she will be about £70 a week better off.

She said: "It'll make a big difference... that little bit extra - well I'm saying little, it's a lot really - is excellent, for me and everybody else at the council."

Mr Miliband unveiled the new policy at Islington Council in London, which recently became another "living wage employer".

He said: "There are almost five million people in Britain who aren't earning the living wage; people who got up early this morning, spent hours getting to work - who are putting in all the effort they can - but who often don't get paid enough to look after their families, to heat their homes, feed their kids, care for elderly relatives and plan for the future.

"Too many people in Britain are doing the right thing and doing their bit, helping to build the prosperity on which our country depends, but aren't sharing fairly in the rewards."

 

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • rate this
    -1

    Comment number 583.

    If only it was this easy. Real wages are determined by Supply and demand. If you raise wages above market rate you will reduce demand for labour and increase unemployment. Otherwise lets make minimum wage £50 per hour! I exaggerate to make the point but i am afraid the way to increase wages is to get the economy growing. To do the latter wages may have to go down before they can go up again!

  • rate this
    +101

    Comment number 354.

    I'm sorry, but, why not just raise the 'minimum wage'?

    I also have a fundamental greivance with companies that only pay the minimum wage, as their attitude seems to be "I would pay you less, but it would be illegal for me to do so"

  • rate this
    -4

    Comment number 274.

    All sounds good and noble, but are we all fogetting that by time of the next general election in 2015, these amounts will not be enough to live on, especially if we continue to experience exponential living costs like we are now? Nice try Ed, but I'm not buying it.

  • rate this
    +97

    Comment number 128.

    I work 35-40 hours a week. I make £6.56 an hour. To get to work I have to drive 36 miles or 45 mins each way. There is no public transport options and I spend £60 a week in fuel. I'm under 21, and i'm just extremely thankful I found a job that doesn't pay £4.93 (the minimum wage for my age group) because I wouldn't even be able to get to work otherwise.

  • rate this
    -69

    Comment number 127.

    This will just deter employers from employing, training & giving experience to those who need it most: young, unskilled, uneducated people. Hmmm, who made up the majority of those involved in the riots? Young, unskilled, uneducated people deprived of economic opportunity.

    If this idea really works, why raise the hourly wage by £20? Because it doesn't work.

 

Comments 5 of 9

 

More UK Politics stories

RSS

Politics Live

  1.  
    08:50: 'Back seat driving' The Independent
    The Independent on Sunday

    The Independent on Sunday claims former Education Secretary Michael Gove is still "back-seat driving" his old department and maintains a "shadowy influence" behind the back of his "more teacher-friendly" successor Mrs Morgan.

    The paper says the chief whip still receives paperwork related to Department for Education issues.

     
  2.  
    08:44: New beds crisis
    The Observer

    The Observer leads on what it says is an acute shortage of beds for young mental health patients in the NHS.

    According to guidelines from NHS England, leaked to the Observer, 16 and 17-year olds, who should be admitted to specialist child adolescent mental health facilities (Camhs), are likely instead to be admitted to adult wards.

     
  3.  
    08:41: 'War on illiteracy' Sunday Times
    Sunday Times

    The Sunday Times's top story (paywall) is Education Secretary Nicky Morgan's "war on illiteracy and innumeracy". The paper says she plans to remove head teachers from schools where 11-year-old pupils cannot pass tests on basic English and times tables.

     
  4.  
    08:37: Miliband attacked The Daily Telegraph
    Telegraph

    Ed Miliband has faced criticism from a leading business chief who said a Labour government would be a "catastrophe" for the UK.

    Stefano Pessina, acting chief executive of Boots, said in an interview with today's Sunday Telegraph that Mr Miliband's plans were "not helpful for business, not helpful for the country and in the end, it probably won't be helpful for them".

    He did not elaborate on which specific policies of the party he disliked but told the newspaper: "If they acted as they speak, it would be a catastrophe."

     
  5.  
    08:33: Sunday papers
    Papers

    It is a very mixed - and highly politicised - Sunday for headlines in the nationals. You can read the full write up from our online paper reviewers. But we'll also break it down into bite-sized chunks for you in the next few entries.

     
  6.  
    08:28: Coming up

    A few must watch items for your Sunday morning:

    The Andrew Marr Show is at 09:00 when Education Secretary Nicky Morgan and Shadow Foreign Secretary Douglas Alexander will be on the sofa. You can watch via the Live Coverage tab at the top of this page.

    Sunday Politics, tennis permitting, at 11:00 will hear from Culture Secretary Sajid Javid and Labour MP Tom Watson. Again, watch live on this page.

    Other options for your Sunday morning political fix include Pienaar's Politics from 10:00 to 11:00 on BBC radio 5Live and we'll also bring you updates from the Murnaghan programme, over on Sky News from 10:00-12:00.

    And of course you may want to keep one eye on events in Melbourne too, where Andy Murray is taking on Novak Djokovic in the Australian Open tennis final. The BBC has live coverage here.

     
  7.  
    08:20: Good morning

    Hello and welcome to Politics Live. Over the course of the next 10 hours we'll be bringing you all the news, views and analysis as it happens from the BBC's political team in text and video - including all the key moments from the Andrew Marr Show, Sunday Politics, the World This Weekend and reaction to the big Sunday newspaper stories. You can see how Friday, which was a Churchill remembered special, unfolded by clicking here.

     

Features

Elsewhere on the BBC

Programmes

  • Temperature remoteThe Travel Show Watch

    The remote to control the temperature of your shoes plus other travel gadgets reviewed

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.