GMB welcomes Labour’s plan to increase National Minimum Wage to £8 per hour by 2020

The GMB Trade Union – which represents many workers within the UK’s security sector – believes it’s important to shift the burden of dealing with low pay from taxpayers to employers, and that the transition must be real so that the increase is not paid with one hand and taken away with the other.

At the Labour Party Conference in Manchester, Ed Miliband announced that Labour plans to raise the National Minimum Wage to £8 per hour by the end of the next Parliament. In response, Paul Kenny (GMB General Secretary) said: “This is a welcome and necessary first step for workers to recover the nearly 15% drop in the value of earnings they’ve suffered over the last six years. It’s important to shift the burden of dealing with low pay from taxpayers to the employers, many of whom are sitting on record levels of cash and profits. The transition must be real so that the increase is not paid with one hand and taken away with the other.”

Miliband told delegates at the Labour Party Conference in Manchester that his ‘Plan for Britain’s Future’ will rebuild the link between working hard and sharing in our national wealth. The planned increase would take the National Minimum Wage from £6.50 in October this year to £8 by 2020 – a rise of £1.50 an hour for Britain’s lowest paid workers (worth £60 per week or £3,000 per annum).

Labour Party leader Ed Miliband

Labour Party leader Ed Miliband

The proposed wage rise – which would be implemented by the Low Pay Commission over the course of the next Parliament in consultation with business – is based on a plan to boost the National Minimum Wage from 54% to 58% of median earnings by 2020.

“Too many people are treading water, working harder and harder just to stay afloat,” said Miliband. “Too many working people have made big sacrifices but in this recovery they are not seeing the rewards for their hard work because, under the Tories’ failing plan, the recovery is benefiting a privileged few far more than most families. One in five of the men and women employed in Britain today work the hours and make their contributions but find themselves on low pay. If you work hard, you should be able to bring up your family with dignity. From Perth to Portsmouth to Penzance, working people are demanding to know if any political party can make a difference. I have heard that despair in Scotland and across the United Kingdom.”

The Labour Party’s leader continued: “This week, Labour’s ‘Plan for Britain’s Future’ will show how we can change and how we can once again become a country that rewards hard work. That’s why we have set out plans to raise the minimum wage by £1.50 an hour by 2020 to £8 an hour – because Labour is the party of hard work, fairly paid.”

Background to the National Minimum Wage

The introduction of the National Minimum Wage was orchestrated by the last Labour Government, raising pay at the bottom for increased productivity. The National Minimum Wage was originally designed to prevent exploitation and extreme low wages. Today, the challenge is different, with the Labour Party pointing towards a large number of people that do a hard day’s work but are still living in poverty or dependent on in-work benefits.

In May this year, Ed Miliband announced that the next Labour Government will set the Low Pay Commission (LPC) a five-year goal of increasing the National Minimum Wage to a more stretching proportion of median earnings (as recommended by Alan Buckle in his independent review on low pay). It would be for the LPC to determine the path to reach that goal during the course of Parliament.

Miliband is now proposing that the goal should be set at 58% of median earnings by 2020. That would mean the minimum wage reaching £8 an hour by 2020. The theory is that a clear, long term target will give businesses time to plan and adapt their models in order to boost productivity and support higher wages.

The Labour Party is adamant that international evidence shows countries can support minimum wages at this level with no adverse impact on employment. This would afford the UK a National Minimum Wage similar to the level seen in Australia and EU countries such as Belgium and Germany, but still lower than France and New Zealand.

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