Labour plans new low pay rules based on average hourly wages

LABOUR leader Ed Miliband will today announce plans to change the way the statutory minimum wage is determined and basing it on average hourly earnings.

Miliband says that, if his party gained power, Labour would set the Low Pay Commission a five-year target to increase the rate to a set percentage of median hourly pay. He does not plan to reveal the figure until after the general election.

However the opposition party may look to the advice of Professor Sir George Bain, the former chairman of the Low Pay Commission, who said in a recent report for the Resolution Foundation think tank that the government should set a medium-term target to raise the minimum wage to 60 per cent of median hourly earnings. In 2012, it stood at 55 per cent.

Miliband will announce the strategy at the launch of Labour’s review of the minimum wage, which has been carried out by Alan Buckle, former KPMG deputy chairman.

However the Confederation of British Industry (CBI) warned Labour against meddling with the way it is set. Katja Hall, deputy director general of the CBI, said: “The minimum wage was introduced by a Labour government and it has widespread support from political parties and from employers.”

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