Miliband under pressure to make living wage compulsory

Ed Miliband‘s plans to encourage businesses to pay the living wage will “not significantly” tackle lower pay, members of his party warned him today.

Labour’s economy spokesperson on the London Assembly said voluntary schemes would take hundreds of years to work and urged Miliband to make the living wage compulsory instead.

“Voluntary measures alone may not significantly improve the number of people earning a living wage,” Labour assembly member Fiona Twycross said.

“At the current rate of progress it will take 450 years for all workers to be paid a living wage in London,” she added.

Labour assembly members want the living wage to be made statutory in London.

They cite a new report which claims that raising the minimum wage to the level of the living wage would actually increase jobs in the UK.

According to the report by Howard Reed of Landman Economics and commissioned by Unison: “It is unlikely that the extension of the living wage to all UK employees would result in any substantial aggregate employment losses.”

“In fact, it is quite plausible that adopting the living wage on a statutory basis could actually increase overall employment in the UK.”

A previous study showing that a compulsory living wage would result in 160,000 job losses overestimated the threat of job losses and failed to take into account the economic stimulus that higher pay would give the economy, according to Reed.

The call for Miliband to harden his commitment to the living wage comes as the Conservative party condemns his plans as unaffordable and unworkable.

Tory chairman Grant Shapps said Labour’s proposal to give a tax rebate to companies paying the living wage would lead to greater costs for government and taxpayers.

“This unworkable policy would have a substantial extra cost to the exchequer,” Shapps said in a statement.

“That would mean higher taxes and higher mortgage rates for hardworking people, hitting their living standards,” he added.

However, the Tories attack was dampened when Conservative mayor Boris Johnson reasserted his support for the living wage.

“The living wage is not only morally right, but makes good business sense too,” the London mayor is expected to say at an event in London today.

Johnson has been a long term advocate of the living wage. He will today announce a raise in the London living wage, which is typically set at around £1 an hour higher than the national living wage.

The national living wage will also be raised today by 20p to £7.65.

Miliband under pressure to make living wage compulsory