News

Living Wage - Cost of Living

(November 06, 2013)

GE15 - Rent v Wages

This week is Living Wage Week. Trade unions, businesses, charities, universities and other organisations will come together to celebrate the living wage and to discuss further ways of promoting the campaign. The new, independently calculated rates for London and the UK will be announced, and the latest list of accredited employers revealed.

The Living Wage Campaign is an important way in which we can tackle the cost of living crisis. The chronic problem of low pay is hurting families, businesses and the taxpayer. Approximately one in five workers in the UK earns less than the Living Wage and these people are working around the clock just to pay the bills. Since David Cameron became Prime Minister, he’s allowed gas and electricity bills to rise by an average of £300 a year. For too many people, work is not paying enough to afford the ever spiralling essential costs.

There is growing evidence that businesses can benefit from implementing the Living Wage too. Around 80% of employers have noticed an increase in productivity and also report positive effects on recruitment and retention. The tax-payer is also rewarded, as for each employee who is moved up to a Living Wage from the National Minimum Wage, the Treasury saves on average £1000 in reduced tax credit spend and increase National Insurance pay-outs.

The Labour party is already playing it’s part in this movement. Rather than acting as a passive Opposition, across the country Labour councils are now leading the way in making a commitment to their staff who play such a vital role in keeping local services running. It is not easy for local authorities to find the money in these tough times, but Labour councillors are showing that even with less money around, it is our party that can advance the causes of fairness and social justice.

But there is more we can do in Government. Ed Miliband and I have asked Alan Buckle, Deputy Chair of KPMG, to consult widely with business federations, trade unions, local authorities and campaign groups as well as relevant academic and policy experts. He will seek to build on Labour’s approach in government - balancing the need for wage growth with concerns about the impact on employment. He will be reviewing the underlying causes of low pay, and seeing what government can do to strengthen the minimum wage and encourage the adoption of the living wage.

Ed Miliband talks of a ‘One Nation’ economy in which everyone has a stake and prosperity is fairly shared. Government, employers, employees and civil society need to work together to build this. The Living Wage campaign gives us a perfect example of this principle in practice.

The campaign for a living wage is a powerful symbol of the kind of change the Labour Party wants to see in our economy. It is about offering people dignity in work, protecting the most vulnerable in our society and laying the long-term foundations towards building a more stable economy and cohesive society.

The Living Wage helps those who are struggling with the cost of living crisis now, whilst laying the road to a more sustainable and fair economy in the future. That is why Ed Miliband and the Labour party will continue to champion this important cause.

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