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Labour offers living wage tax breaks

Source BBC News@

Labour leader Ed MilibandEd Miliband is promising firms they would be able to claim back a third of a pay rise that meets the "living wage"

Some of Britain's lowest-paid workers could get pay rises under plans drawn up by Labour leader Ed Miliband.

If the party wins the next election, Mr Miliband plans to offer firms a 12-month tax break in 2016 if they agree to pay the so-called "living wage".

The pledge was cautiously welcomed by business groups, but there were fears many firms would find it unaffordable.

The plans were unveiled as a study showed those not earning a living wage increased by 8% in the last year.

The living wage is an informal benchmark based on the amount an individual needs to earn to cover the basic costs of living. It is set at £8.55 an hour in London and £7.45 an hour in the rest of the UK.

The national minimum wage, set by the chancellor, is significantly lower at £6.31 an hour for adults, and £5.03 for those aged 18 to 21.

'Growth without prosperity'

Under the proposals put forward by Mr Miliband, private firms would be able to claim back about a third of the cost of raising their staff-members' wages to the living wage - amounting to £445 on average per worker, although it could potentially reach £1,000.

Labour claims the plan will save money because benefit bills would go down and tax revenues would increase.

But costs to businesses would rise as a result of signing up. And those that do so could only claim the money back for one year.

The announcement comes ahead of a speech on Tuesday in which Mr Miliband is expected to say that tackling low wages is key to solving squeezed living standards.

He is expected to warn that Britain risks "an era of growth without prosperity" as wages stagnate while household costs continue to rise.

"For ordinary families to keep up, we don't need average wages to just creep higher than prices. That will still leave millions of people worse off. We need the kind of strong increases in wages that will genuinely make people all across Britain better off," he is to say.

"Wages for millions of families have been stagnant or in decline for far too long now.

CommutersThe number of people paid less than the living wage grew from 4.8 million to 5.2 million in the last 12 months, according to KPMG

He will add: "Low wages aren't just bad for working people and their families. They are driving up the social security bill too, as the country has to subsidise more and more low paid jobs with tax credits and benefits.

"So to those who say we can't afford to do anything about wages in our country today: I say we can't afford not to."

BBC political correspondent Robin Brant said the living wage was not a Labour idea but it had broad support, including from many outside politics.

Katja Hall, chief policy director for the Confederation of British Industry, said the scheme may help some firms pay more, but many companies simply could not afford it.

"The best way to boost wage growth in the longer term is to build a sustainable recovery and invest in the productivity growth that will boost wages," she said.

The Federation of Small Businesses said it was an "interesting proposition" but said a national insurance exemption next year could help firms increase pay sooner.

'Hard work pays'

The Living Wage Foundation, which campaigns for the minimum wage to be set according to the cost of living, said paying the higher rates was necessary.

Rhys Moore, the group's director, said: "With working poverty on the rise, paying a living wage is becoming a must for every responsible employer. We are working with businesses across the UK to help them do the right thing, so that from the chief executive to the cleaner, hard work pays."

Updated living wage rates are due to be announced on Monday. The UK rate will be announced by Bishop of Nottingham Paul Butler, while the London rate will be set out by London Mayor Boris Johnson.

It comes as it emerged the number of people paid less than the living wage grew from 4.8 million to 5.2 million in the last 12 months, according to KPMG.

And the number of children living in households earning less than the living wage has increased from 1.82 million to 1.96 million, according to research by Save the Children.

Đăng ký: Tieng Anh Vui

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