In 1999 a National Minimum Wage was introduced by the last Labour government. This flagship policy was designed to prevent extreme low pay and abuse, and I am proud to say that it boosted income for millions at the bottom without leading to a loss of jobs.
Fifteen years on we face a different challenge. Families are on average £1,600 a year worse off since David Cameron became Prime Minister. Over five million people, or one in five employees, are low paid. The value of the national minimum wage has been eroded leaving working people worse off. In-work poverty is a shocking legacy of the Tories’ four years in power.
The next Labour government is determined to do something about this. That’s why in Parliament this week I voted to set the Low Pay Commission a five-year target to raise the National Minimum Wage faster than average earnings. This five-year target was recommended by Alan Buckle, former Deputy Chairman at KPMG. He was asked by Ed Miliband to investigate how to strengthen the minimum wage as part of Labour’s plan to ensure that people are rewarded for a hard day’s work.
A clear five-year target gives businesses time to plan and adapt their business models so they are able to support higher wages for their employees. Safeguards should be put in place to protect jobs in the face of economic shocks. Ministers have done nothing to support a Living Wage, but Labour would incentivise firms to pay more through Make Work Pay contracts to get people at work a better deal.
Four years of Tory government have resulted in higher prices, lower wages and a cost-of-living crisis that has hit tens of thousands of people in Edinburgh South. Labour will create a new economy that works for everyone instead of just a few at the top, and that begins with strengthening the National Minimum Wage. Only Labour will tackle the scandal of low pay, growing our way to higher living standards for all.