Why Labour must lead on the Living Wage

By Ed Miliband MP

A few weeks ago I was reminded why campaigning for fairness at work strikes at the heart of our Labour values, and why Labour must lead in tackling low pay. Leaving a comment on my website, Karina Beecham told me why the Living Wage is so important to her and millions of others. She said:

“My husband is a security officer on £6.90 an hour, working 12 hour shifts. He has to work at least 60 hours a week so that we can make ends meet. I also work full time but thankfully my wage is above this limit. You certainly have our support.”

Karina and her husband are not alone. Every morning in Britain, 5 million people go to work knowing that by the end of the day they will not have been paid enough to meet their most basic needs. They earn less than £7 an hour, even though £7.60 is now recognised as the minimum people need just to get by. They work hard, but they and their families still live in poverty.

I want to change this. No one who does a hard day’s work should have to live in poverty. A Living Wage – where people are paid at least enough to live on – is needed in Britain today, and I have put it at the heart of my campaign for the Labour leadership.

We introduced the national minimum wage soon after entering government. It was radical for its time. Some people said it couldn’t be done, and that it would ‘cost jobs’. But we made it happen; we put our Labour values into action to give millions of people a decent wage for the first time. Wages went up, unemployment went down and our economy and society prospered.

But that was more than ten years ago. The world has now changed, and we have to change with it – and we have to be prepared to be radical again. For many low-paid workers, facing rising living costs, the minimum wage is no longer enough. I want to make the Living Wage a reality for the millions whose work is currently undervalued – to make work pay.

When employers pay low wages, the state is left to pick up the bill by topping up incomes with tax credits and because it loses out on higher tax revenues. The culture of low pay currently costs the taxpayer about £6 billion a year. The Living Wage would strike a fairer balance of responsibility for decent pay between the taxpayer and the private sector.

We can do this. In fact it’s happening already, up and down the country. Trade unions are making the case to employers and Labour councils are leading the way in the public sector. Top employers like Barclays, KPMG and Greenpeace are reaping the benefits of reduced absenteeism, greater productivity and lower staff turnover since introducing the Living Wage.

I know that some businesses are working hard to stay afloat in these straitened economic times. But I believe we can reach out to business and energise the campaign by offering tax breaks to those employers who choose to pay the Living Wage to their staff. A Living Wage would benefit businesses, benefit workers and be good for our economy and society too.

Because low-pay is an issue that affects us all, our campaign has brought together businesses, local authorities, trade unions, and civil society groups under the common cause of fairness and dignity at work. But this campaign needs strong leadership to make it a reality. Labour must be ready to take up the call, to campaign nationally on the values that lie at the heart of our movement and impact directly on people’s daily lives.

This is something which doesn’t need to wait until we are back in government. I have already signed up 450 Labour councillors in support of the campaign, and community organisers are encouraging local business leaders to adopt the idea in their areas. This isn’t just a case of taking the fight to the coalition, but making the case to the country. We need to be engaged in every community, getting stuck in to local campaigns, and making change across the country wherever we can.

Our fight for a fairer Britain begins in the workplace. We must recapture the boldness that took us to power in 1997 on the promise of the minimum wage. I want to make Labour the party for millions of people like Karina and her husband – people who struggle every day to get by on wages that are simply not enough. If we have the courage to choose change in this leadership election, we can continue to spread the message that Labour is a living, breathing campaigning force capable of making a real difference in people’s lives. We can start making that difference now by showing that a Living Wage is both a possible and preferable alternative.