September 21, 2014 / 12:06 PM / 4 years ago

Eyeing 2015 election, UK's Labour pledges rise in minimum wage

MANCHESTER England (Reuters) - Britain’s opposition Labour party promised on Sunday to raise the national minimum wage by more than 25 percent within five years if it wins next year’s national election, a pledge designed to win over voters hit by rising living costs.

The leader of Britain's opposition Labour Party, Ed Miliband, speaks to activists as he arrives at the Midland Hotel in Manchester, northern England September 20, 2014. REUTERS/Phil Noble

Earnings in Britain have lagged behind inflation since the 2008 financial crisis. The rising cost of everything from gas to train tickets has shot up the political agenda since the return of economic growth forced Labour to shift its line of attack on the Conservative-led government ahead of the May 2015 vote.

“Too many people are treading water, working harder and harder just to stay afloat. Too many working people have made big sacrifices but in this recovery they are not seeing the rewards for their hard work,” Labour leader Ed Miliband said on the opening day of his party’s annual conference in Manchester.

“One in five of the men and women employed in Britain today do the hours, make their contribution, but find themselves on low pay.”

If elected, he said he would raise the national minimum wage to eight pounds ($13) an hour by 2020, an increase of more than 25 percent from its current level of 6.31 pounds.

Earlier this year, Prime Minister David Cameron’s coalition government agreed to a recommendation by the Low Pay Commission, the independent body which advises it on the topic, for a 3 percent increase in the minimum wage to 6.50 pounds in October.

That would be the first above-inflation increase since 2008.

Miliband, who has sought to make the cost of living one of the main issues in next year’s election, has previously promised to link the minimum wage to average earnings. On Sunday, Labour said its plan would see the minimum wage boosted to 58 percent of median earnings by 2020, from 54 percent.


In response, Cameron’s Conservatives said they were already implementing an above-inflation rise in the minimum wage and they blamed Labour for making people poorer by overseeing the economic crash as they were in power at the time.

While center-left Labour is leading opinion polls by a few percentage points with less than eight months to go until the national vote, it lags far behind the Conservatives when voters are asked who would be better at managing the British economy.

Business lobby the British Chambers of Commerce criticized the plan to raise the minimum wage, saying governments should leave the issue to existing bodies such as the Low Pay Commission.

“Businesses are in favor of an evidence-based approach to the minimum wage rather than political parties using it to gain support from voters. The government should not intervene in such matters, unless there is market failure,” BCC Director General John Longworth said in a statement.

“Politicians should instead focus on implementing policies to raise productivity and improve skills in the workplace, which are the keys to higher wages for all in the future.”

(1 US dollar = 0.6141 British pound)

Editing by Andrew Osborn and Gareth Jones

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