Labour will restore the dignity of earning a day’s wage
As a constituency member of parliament in Leeds, I see the impact of low pay on the families and communities I serve – the huge stress and the strain on people who put in the hours at work, but still struggle to make ends meet. And as shadow secretary of state for work and pensions I see the damaging effects of low pay on the living standards of millions of working families and the huge costs for our social security system when working people are forced to rely on in-work benefits to pay their rent.
Under the Tories, wages have been squeezed for the majority, the number of people on low pay has reached record levels and the in-work benefits bill has soared. Working people are, on average, £1,600 a year worse off in real terms, and the number of people paid less than a living wage has soared by 44 per cent. At the same time there has been a staggering 60 per cent increase in working people claiming housing benefit, resulting in a £1.8bn overspend on housing benefit since 2010.
The Tories have no plan to turn this around. Only Labour has a better plan to make work pay and control social security spending. That is why Ed Miliband has set a 10-year goal of halving the number of workers on low pay by 2025. But progress cannot be delivered by government acting alone. Making work pay must be a shared mission for national and local government, employers and employees, trade unions and campaigners, consumers and shareholders, working together towards a common goal.
So as well as setting an ambitious national target to increase the national minimum wage to £8 an hour by 2020, a Labour government will strengthen the partnership-based model of the Low Pay Commission and expand its remit, while giving local authorities a bigger role in investigation and enforcement.
Labour’s ‘Make Work Pay’ contracts will see more workers paid a living wage with tax rebates given to employers who sign up to pay a living wage. And we will learn from brilliant Labour councils like Brent who are offering business rate discounts to firms who pay a living wage. And we will increase transparency and accountability by requiring listed companies to report on whether or not they pay a living wage.
I have been inspired again and again by the hardworking women and men who have told me of the dignity they drew from earning a decent day’s wage. And the confidence that came with being part of a successful campaign for fair pay. Incredible people like Fran Massey, the catering worker from Manchester who joined me on the platform at Labour party conference 2012 and spoke movingly about how a living wage helped her children to pursue their passion for basketball.
Tackling low pay is central to Labour’s vision of One Nation, where everyone has a voice, where everyone sees higher living standards. And where working people see a fairer share of the prosperity they help to create.
Rachel Reeves MP is shadow secretary of state for work and pensions
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