July Budget 2015: Pressure mounts on government to back a living wage

 
Lauren Fedor
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Campaigners have pushed for the government to back a so-called “living wage”
Raising the minimum wage to the so-called “living wage” would lift 6m people out of poverty and generate more than £4bn of additional revenue, according to a new report out today from KPMG.

The living wage, as defined by the Living Wage Foundation charity, is £7.85 per hour nationally and £9.15 in London. The national minimum wage, recommended by the independent Low Pay Commission, is £6.50 per hour.

KPMG’s report comes just two days before chancellor George Osborne presents his summer emergency budget on Wednesday. Prime Minister David Cameron has said that he wants to move toward a “high wage, low tax, low welfare” society, but the government has made no indication that it will raise the minimum wage, a move that many say will hurt smaller firms and lead to layoffs.

But that has not stopped a range of critics from putting pressure on the government to lift wages for low-wage earners. Former Downing Street aide Rohan Silva, who now works with London start-ups, wrote in the Observer yesterday that it is “ridiculous” that some organisations claim they cannot afford to pay the living wage, saying: “If a small business like mine can do it, there’s no excuse for the multinationals and public sector behemoths.”

Meanwhile, Labour leadership hopeful Liz Kendall has today cited the KPMG report in calling for the government to extend the remit of the Low Pay Commission in an effort to drive up wages.

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