Miliband outlines Labour’s minimum wage boost plans

Ed Miliband today set out his party’s plans to change how the minimum wage is calculated.

A Labour government would set the lowest legal rate of pay by linking it to national average earnings, Miliband told the BBC’s Today programme.

He said the fact that many people were working but still unable to make ends meet was a “national scandal”, and that “we have to go further in tackling the problem of low pay.”

Miliband refused to say exactly how the wage would be calculated, but would the policy would see a wage rise that put the minimum wage up to near average hourly earnings.

The Liberal Democrats and the Conservatives are all also calling for a higher minimum wage, which will see an increase of 19p in October, to £6.50.

Business groups are concerned however that a minimum wage rise could stifle the economic recovery, putting up prices and increasing levels of competition in the market.

The CBI, which has already warned that “political uncertainty” could be a major threat to the economy, has said that politicians should not be setting rates of pay.

Katja Hall, the CBI’s new deputy director general, said: “The national minimum wage has been a success in raising wages for the lowest paid because it’s been left to the Low Pay Commission, not politicians, to set the rate. A government proposed target would undermine the Commission’s independence.

“The simplicity of the national minimum wage is one of its strengths, but ultimately pay must reflect productivity. Every business should pay the national minimum wage, so we support better enforcement.”

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