Labour adds to wage pressure

Miliband signals NMW link to average earnings

IF the Labour Party forms the next Westminster government it will set a statutory minimum wage target linked to average earnings, party leader Ed Miliband has said.
He told BBC Radio 4: “This gets at what we see as the terrible scandal in this country that 5m people in low-paid work are unable to make ends meet … we have got to tackle it.

Miliband: Scandal that 5m in work can’t make ends meet.
Miliband: Scandal that 5m in work can’t make ends meet.
“I don’t think we can carry on as we were. The minimum wage has done a good job in tackling the worst of exploitation but we have got to go further now and tackle low pay.”
He hasn’t yet explained what proportion of average earnings would be involved but a target to be achieved over the potential governmental period of 2015-2020 is likely to be given ahead of the UK general election.
Some political journalists have suggested the rate could be 60% of median earnings which would move the UK NMW rate from being one one of the lower rates in Europe to being in the top third in developed countries.
In Scotland, where the country votes in an independence referendum in September this year, the Scottish Government’s white paper proposals for independence include the establishment of a “Fair Work Commission which, as part of a remit, will deliver the mechanism for uprating the National Minimum Wage” and a commitment to a living wage.
In recent months both the Conservatives and Liberal Democrats have said they want further increases in the minimum wage, which will rise in October to £6.50 an hour for workers over the age of 21.
But the Association of Convenience Stores said local shops in Britain would be threatened by Labour’s plans to link the National Minimum Wage to average earnings.
ACS chief executive, James Lowman, said: “We support the National Minimum Wage and the protection it provides to workers, but forcing large annual hikes in the minimum wage rate, in the way that the Labour Party proposals suggest, will threaten investment and prevent local shops from creating jobs.”