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Higher National Minimum Wage Welcome

Monday, May 19, 2014

GMB Welcome Ed Miliband's Commitment To Accelerate Increases In National Minimum Wage

All main political parties seem to agree that the National Minimum Wage is too low but only Labour is saying it will do something about it says GMB.

GMB commented on speech by Ed Miliband on increasing the national minimum wage. See notes to editors for copy of Labour Party press release.

Brian Strutton, GMB National Secretary for Public Services, said "Ed Miliband's commitment to review the role of the Low Pay Commission is both welcome and necessary if it is to accelerate increases in the National Minimum Wage.

All main political parties seem to agree that the National Minimum Wage is too low but only Labour is saying it will do something about it.

Of course, it is more than just the headline National Minimum Wage that matters. GMB has pointed out that the age related rates are unfair to young people and unscrupulous businesses constantly find ways to avoid paying even minimum wages.

In a nutshell, the Low Pay Commission would benefit from being able to look beyond setting the national minimum wage to addressing low pay in general."


Contact: Brian Strutton 07860 606 137 or Cath Speight 07506 711925 or Lisa Johnson 07900 392 228 or GMB press office 07974 252 823 or 07921 289880

Notes to editors

Labour Party press release Monday 19th May 2014

Miliband - Only Labour will tackle the scandal of low pay

Ed Miliband will today (Monday) back radical new proposals to raise the value and restore the ambition of the National Minimum Wage.

He will say that Labour is determined to make the biggest changes to the National Minimum Wage since its creation 15 years ago so that it meets the challenges of the 21st Century where hard work must once again be the route to a decent life.

Speaking at the launch of Alan Buckle’s independent Report on Low Pay, Mr Miliband will embrace its key recommendation for an ambitious plan over the course of the next parliament to increase the National Minimum Wage so that is gets closer to average earnings.

This will mean it needs to increase significantly over five years to ensure that low paid workers who put in a hard days’ work are rewarded for doing so and cut the costs of failure in our social security system.

  *   Mr Buckle’s report shows how the number of workers on low pay now stands at 5.2 million – one in five of all workers and one in three of women at work - up from 4.8 million in 2012 and 3.4 million in 2009.

  *   The cost of low pay to government finances is estimated at £3.23 billion. Poor enforcement in some sectors means that more than a quarter of a million people are still estimated to earn less than the NMW, while the UK has both higher levels of low pay and lower levels of productivity than many of our main international competitors.

  *   The report sets out a new framework for the Low Pay Commission, with a strengthened role in tackling poverty and raising productivity across the UK. It would be charged with implementing a five-year target and given a new role across sectors.

  *   The Low Pay Commission would retain the capacity to take account of shocks to the economy in the level of the National Minimum Wage set.

Other recommendations in the report which Labour is considering as part of the Policy Review include:

  *   Strengthening enforcement of the National Minimum Wage by extending the remit of HMRC to take action against employers that fail to pay workers for holidays non-payment of Holiday Pay and work closer with local authorities on inspection.

  *   Encouraging employers to pay the Living Wage by making it a condition of major central government contracts, requiring employers disclose numbers earning less than the rate, and offering temporary incentives to raise low pay.

  *   Raising productivity and wages in different sectors of the economy by empowering the Low Pay Commission to create taskforces with employers and employees to boost productivity and wages in low paid sectors, and see how those sectors which can afford to pay more do so.

Mr Miliband will say:

"Some people here will remember what it was like in the 1980s and early 1990s. Even when the economy was doing well, so many people were left behind, exploited at the bottom of a brutish Labour market, paid as little of £2 or even £1 an hour.

"In 1997, a Labour government took action, with one of the proudest achievements of any British government: it introduced the National Minimum Wage and saved people from a level of poverty pay that shamed our country.

"It was controversial at the time. The Tories warned it would destroy millions of jobs. But Labour, working with British business, helped change lives and our economy for the better.

"It is what our Labour Party is all about. But that was the 1990s. Today the extremes of exploitation have been eliminated, but the problem of low pay has only grown. As I have crossed the country in the past three weeks of this election campaign, I have met so many people working hour after hour, often doing two jobs, just to make ends meet. People who are anxious about whether they’ll be able to cover their bills, their rent or their mortgage, people who don’t have time to spend with their family because they are working all the hours that God sends.

"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.

"It is time to raise our sights again because Britain can do better than this. The next Labour government will restore the link between hard work and building a decent life for your family.

"And today, Alan Buckle’s Report begins to tell us how: it means promoting a Living Wage which is what our fantastic Labour councils are already doing. But most of all it means setting new ambitions for our country.

"That’s why today, I am proud to announce that the next Labour government will take new radical action against low pay: a new five-year ambition to restore the link between doing a hard day’s work and building a decent life for your family.

"A Labour government will establish a clear link between the level of the minimum wage and the scale of wages paid to other workers in our economy. We will say workers on the minimum wage must never be left behind because those who work hard to create our nation’s wealth should share in it.

"This mission to tackle low pay will be in England, Wales, Northern Ireland - and Scotland too - because social justice is best achieved by working together rather than competing against each other in a race to the bottom on wages, tax rates and aspirations for our country.

"And by helping to make work pay for millions we will chart a new course for Labour too, changing our economy to make work pay and tackle the cost of failure in our social security system too.

"Just as when the last Labour government created the National Minimum Wage, the next Labour government will do this in partnership with business once again, allowing employers the certainty they need to plan ahead.

"I will set out the precise ambition Labour will propose closer to the election. But today I want to welcome this central recommendation of Alan Buckle’s report and state plainly that, under the next Labour government, hardworking Britain will be better off."

Alan Buckle, the former deputy chairman of KPMG International, who was asked by Ed Miliband in September 2013 to investigate how to restore the value of the minimum wage and promote the Living Wage, will say:

"A 30-year international business career has made me acutely aware of businesses’ need for certainty and time to plan, and the lesson from the introduction of the National Minimum Wage in 1999 is that employers are able to adapt. Warnings of huge job losses proved false, and most businesses now see the minimum wage as integral to protecting them from being undercut by those competing on extreme low wages.

"The current system was designed in the 1990s to stop extreme low pay and abuse. But, with millions of people earning just above the minimum still living in poverty, we need a broader and more ambitious strategy to tackle low pay and move to a more high skill, high wage economy. Businesses have choices about how to compete, and policymakers should seek to create incentives to encourage more productive, higher value business models.

"I believe that my core proposal of a clear goal to increase the minimum wage over the life of a parliament is achievable as part of a national mission to tackle the problem of low pay, and that achieving this will be good for citizens, business and the government.

"Making work pay, through an economy that supports a higher skilled, better paid and more productive workforce, is the key to cutting the social security bill and thereby improving government finances.

"This is an independent report, but I hope that Labour and other political parties, in considering the recommendations, will echo the ambition and courage of 1999 when the Low Pay Commission set the first minimum wage. It’s time to finish the job."




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