Miliband vows to protect societies poorest and implement ‘living wage’
Ed Miliband has announced his intention to incentivise implementing a living wage for firms across the UK, in a bid to encourage more to offer them to their employees.
Making a statement early on Monday, the Labour leader said that he would offer work firms a one year tax break starting in 2016, if they chose to adopt the ‘living wage’ into their payment packages.
Mr Miliband identified that the initiative was intended to help those in society with the lowest income, by increasing the minimum amount they earned to a level that was consistent with daily expenditure demands.
The term ‘living wage’ is used to denote the quantity of money an earner needs to at least make an hour to cover the basic cost of living. It has currently been defined as around £8.55 for Londoners and £7.45 everyone else across the UK.
This compares to the national minimum wage that is currently set at £6.31 for adults and a tiny £5.03 for children between 18 and 21 years old.
It is thought that offering a one year tax break to companies would compensate them with a third of the amount they stand to lose by introducing the ‘living wage’ to their policy. This would enable the average worker to acquire almost £500 extra a year on their wages, though this figure could get higher.
Businesses and large work firms have criticised the proposal and cited that is was financially unviable and unaffordable for them to implement.
However, Labour have defended the financial merits of the scheme and have argued that it would save money in the long term as the number of people on benefits would drop and subsequently tax revenue would rise.
Mr Miliband’s statements have already been met with a great deal of criticism from Conservative politicians, who are understood to be concerned with the economic and financial repercussions of the policy.
Former Tory chancellor, Ken Clarke, dismissed Miliband’s ideas as ‘electoral bribery’ and highlighted that the policy would actually damage Britain’s economy in the long term.
“It isn’t quite free beer for the workers but it is electoral bribery really, and Ed is quite incapable of understanding how a country in an acute financial crisis, with an enormous fiscal deficit, can possibly afford this,” said the cabinet minister.
Conservative chairman Grant Shapps added: “Labour got us into a mess with too much borrowing and too much debt and now they’re calling for yet more borrowing and more debt.”
Politicians within the current administration have stressed that they are currently trying everything possible to help those with the lowest income.
Many have argued that they have devoted a great amount of time to encouraging firms to improving the pay of its lowest earners, as long as this does not compromise other peoples jobs in order to finance it.
However, Mr Miliband hit back at critics about the ‘cost of living’ crisis that has dominated the political landscape in recent weeks, arguing that it will one of his government’s key policy’s to tackle poverty within Britain. He has criticised the current administration in recent times about their lack of action towards helping the most vulnerable in society, and has consistently reiterated the sentiment that Mr Cameron is ‘out of touch’.
He added: “Low wages aren’t just bad for working people and their families. They are driving up the social security bill too, as the country has to subsidise more and more low paid jobs with tax credits and benefits.
“So to those who say we can’t afford to do anything about wages in our country today: I say we can’t afford not to.”
Katja Hall, chief policy director for the Confederation of British Industry, stated that the scheme could well be beneficial to a certain amount of firms in the UK, but that most could simply not afford such a change to their finances.
“The best way to boost wage growth in the longer term is to build a sustainable recovery and invest in the productivity growth that will boost wages,” she said.
Country in ‘poverty’
The comments come at a time where scrutiny is high on poverty within the UK, following statistics released by Save the Children last week.
According to their data, around 5.2 million people have disclosed that they have received pay that is lower than the cost of living wage in the past 12 months. This represents an increase from the number of people last year, and has caused alarm bells to ring in sections of the country.
Even more shockingly, the number of young children who are currently residing in a low income household has also risen to just below 2 million, up from last year’s 1.82 million.
It is believed that Mr Miliband’s policy will attract a great deal of interest from the public, who seemed to display attraction to his last policy on energy.