Upping the base wage ‘would bring in billions’ says TUV secretary

 

Britain is losing out on billions of pounds in revenues by keeping the minimum wage low, TUC secretary general Frances O’Grady said yesterday ahead of the opening of the union body’s annual congress.

Ms O’Grady unveiled TUC-commissioned research, by Howard Reed of Landman Economics, showing that if the £6.31-an-hour minimum wage were increased to the level of the voluntary “living wage” – £7.45 an hour outside London – the total benefit to the exchequer could reach nearly £3.3bn.

Even an increase of 4 per cent to just £6.56 would generate benefits in terms of income tax, National Insurance contributions and lower benefit costs equivalent to £273m while a “halfway house” figure of £6.88 would reap £884m.

The figures come amid renewed debate over the minimum wage with reports last week suggesting that the Conservatives were looking at raising it as part of their desire to “make work pay” and because it could prove electorally popular. 

A number of high-profile British or British-based businesses, including Barclays, have adopted the living wage. It is calculated annually by the Centre for Research in Social Policy at Loughborough University, with a higher London figure set by the Greater London Authority, and is designed to afford those who receive it a basic standard of living.

They argue that there is a strong business case for doing so, with workers paid the living wage performing their roles better, staying in post longer, and taking less time off sick. Despite this, KPMG, another “living wage” employer, calculated that one in five workers in the UK – some 4.82m people – are now paid less than the living wage. 

The impact of the current bruising economic climate of rising prices and increasing costs of living at a time when wages are not keeping pace falls hardest on these low paid workers.

Mr Reed, a former chief economist at the Institute for Public Policy Research, used a model created by Landman Economics and the IPPR to calculate changes in income tax National Insurance, and amounts received through tax credits and means-tested benefits which would arise if everybody paid below the specified rates had wages boosted.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Training/Learning and Development Coordinator -London

£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...

Training Programme Manager (Learning and Development)-London

£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

.NET Software Developer (.NET, C#, ASP.NET, front-end)

£30000 - £45000 per annum: Harrington Starr: A Global Financial Service Organi...

C# Web developer (C#,MVC,ASP.NET,SQL)

£30000 - £40000 per annum + Bonus+Benefits+Package: Harrington Starr: C# Web d...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried