Labour unveils plan for Real Living Wage for every adult worker.
A Labour government will change the remit of the Low Pay Commission so that the minimum wage will for the first time reflect the need for working people’s pay to at least cover the cost of living.
Unveiling the commitment in a joint article, Labour Deputy Leader and Shadow Secretary of State for the Future of Work Angela Rayner and Shadow Chancellor Rachel Reeves pledged Labour would “make work pay again”.
Under the plan Labour would keep a link to median earnings, so that all workers benefit from growth - and ensure this genuine National Living Wage applied to every adult worker.
From April 2016 the government introduced a higher minimum wage rate for all staff over 25 – calling it the ‘National Living Wage’. However, this wage is not calculated according to what employees and their families need to live. Instead, it is based on a target to reach 66% of median earnings by 2024.
Under current forecasts this means a rise to £10.50 per hour by 2024 and from 2021 was adjusted to include those over 23 years old. As of April 2022, the National Living Wage is £9.50 for all over 23s, while the National Minimum Wage is £9.18 for those aged 21-22 and just £6.83 for those aged 18-20.
Labour government in power will change the Low Pay Commission’s (LPC) remit so that - alongside median wages and economic conditions - the minimum wage will for the first time reflect the need for working people’s pay to at least cover the cost of living.
Sharon Hodgson, MP for Washington and Sunderland West, said:
"This is exactly the type of measure needed to strengthen individual and collective rights for working people. A Labour Government will guarantee a real living wage for all.
"Labour will tackle poverty pay and ensure that working people are not just seen as collateral damage from an economy that is not working. This policy will ensure that workers get the good jobs and fair pay they deserve."
Angela Rayner, Labour Deputy Leader and Shadow Secretary of State for the Future of Work said:
“When working people’s pay is squeezed, that removes spending power from the economy.
"Working people contribute so much to the wealth of our country. It is only right that they receive a fair day’s pay for a fair day’s work not a bogus living wage they can’t live on.
“Labour will make work pay again with a new settlement for the future of work. We will ensure our genuine National Living Wage is paid to every adult worker.”
Rachel Reeves, Shadow Chancellor said:
“Many employers already pay a real living wage and that is to be commended. But they should not be undercut by those who don’t, which is why we need a level playing field.
“That is why the next Labour government will change the Low Pay Commission’s remit so that - alongside median wages and economic conditions - the minimum wage will for the first time reflect the need for working people’s pay to at least cover the cost of living. Finally, the National Living Wage will live up to its name.
“We will deliver higher growth than the Conservatives in government and we will ensure more people experience the benefits of it, built on the knowledge that wealth doesn’t just trickle from the top down, but comes from the bottom up and the middle out.”
ENDS
· A Labour government created the National Minimum Wage, which took effect on 1 April 1999. From April 2016 the government introduced a higher minimum wage rate for all staff over 25 – calling it the ‘National Living Wage’.
· The Low Pay Commission (LPC) is an independent public body that advises the Government each year on the NMW and NLW. The LPC is a social partnership body, made up of nine Commissioners: three from employer backgrounds, three from worker representative backgrounds, and three independent Commissioners, including the Chair. Every year since its first report in 1998, Commissioners have unanimously agreed the LPC’s recommendations to the Government.
· That next Labour government will change the LPC’s remit so that - alongside median wages and economic conditions - the minimum wage will for the first time reflect the need for working people’s pay to at least cover the cost of living. Labour will ensure this genuine National Living Wage applied to every adult worker aged over 18 - and is properly enforced.