Some of the lowest-paid workers could get pay rises under plans drawn up by Labour leader Ed Miliband. If the party wins the next election, Miliband says Labour will offer firms a 12-month tax break in 2016 if they agree to pay the 'living wage'.

Miliband said: 'We have to end the scandal of poverty pay in this country. We would strengthen the minimum wage, which has lost 5 per cent of its value under this government... And we will go further than that too. That is why the next Labour government from its first day in office, will offer “make work pay” contracts to employers all over Britain. It is a simple deal. For the first year of a Labour government, we will say to every firm: You start to make work pay, through a living wage. And we will give you a 12 month tax rebate of 32p for every extra pound they spend. Make work pay contracts will raise wages, keep the benefit bill down and tackle the cost of living crisis. It is a good deal for workers, business and the taxpayer too. And by tackling low pay we won’t just strengthen our economy, we will strengthen our society as well'.

In the same week it was announced that the living wage rate has risen by 20p to £7.65 an hour, with the London rate rising by 25p to £8.80 an hour.

Source: Speech by Ed Miliband MP (Labour Party leader), 5 November 2013 | Press release 4 November 2013, Living Wage Foundation
Links: Speech | LWF press release | IEA blog post | JRF blog post | SMF press release | BBC report | Daily Mail report | Guardian report (1) | Guardian report (2) | Guardian report (3) | New Statesman report | Telegraph report