HR & Management

Miliband pledges to link minimum wage with average earnings

1 min read

19 May 2014

Labour leader Ed Miliband today set out plans to link the National Minimum Wage to average earnings in an attempt to win over voters before thursday's European and local elections.

At present the minimum wage is set annually based on recommendations from the Low Pay Commission as to what the economy can afford. 

Miliband said that he wanted to restore “the link between doing a hard day’s work and building a decent life for your family.”

Speaking on the Today programme he said: “The minimum wage has done a good job in tackling the worst of exploitation but we have now got to tackle low pay.”

Katja Hall, the CBI’s new deputy director-general, said that a government proposed target would undermine the independence of the Low Pay Commission. 

She said: “The simplicity of the national minimum wage is one of its strengths, but ultimately pay must reflect productivity. Every business should pay the national minimum wage, so we support better enforcement.

“The living wage takes no account of a businesses’ ability to pay, particularly smaller firms. That’s why it should remain voluntary, and reporting on it therefore isn’t appropriate.”

The minimum wage will increase by 19p an hour to £6.50 from October.

Related: What new minimum wage fines mean for your business

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