Millions of low-paid workers will fare far worse than expected under the National Living Wage (NLW) due to sluggish pay rises across the economy, Labour leader Jeremy Corbyn is claiming.
He will tell his party’s eastern regional conference on Saturday that the link between NLW rate increases and average earnings means that more than three million people could be paid £5,000 less a year by the end of the decade than was forecast.
Mr Corbyn is saying slower economic growth could see it at £8.25 an hour by 2020, rather than the £9.30 an hour originally expected.
The Labour leader will tell the Huntingdon gathering: “The Tories’ rebranded minimum wage was supposed to overtake £9 an hour by 2020. But our analysis shows that because of their mishandling of the economy and their failure to protect most people’s pay, it could actually fall as low as £8.25 an hour.
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“That could mean that an estimated 3.3 million people will lose £5,000 compared to what they were promised. It is completely unacceptable.
“Britain needs a pay rise. That’s why the next Labour government will introduce a real living wage of at least £10 per hour by 2020.”
Mr Corbyn will urge the Government to use next week’s Budget to invest in the future and lift people out of debt.
“With pay falling and the cost of living rising, personal debt has too often plugged the gap. Of course, bankers may benefit from this unfair and economically dangerous situation. But increased personal debt is an economic and political failure.
“It isn’t only Labour and the millions facing crippling debts who are worried. The Bank of England, the Financial Conduct Authority and the IMF have all warned against rising debt now that over 8.3 million people are over-indebted.
“People aren’t borrowing to invest, they are borrowing to survive.
“If the Prime Minister and the Chancellor are serious about ending the longest decline in living standards since the 19th century, they must borrow to invest in our economy, services and people.”
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Mr Corbyn is insisting that the divide on Europe in politics is between a Labour version of Brexit or a Tory one.
“The choice facing the country now is not Leave or Remain, but a Labour Brexit or a Tory Brexit.
“The Tories want to use Brexit to reinforce our existing system’s inequalities and insecurities - and put them on steroids.
“They want to drive through more deregulation, lower taxes on the richest banks and big corporations, even more privatisation and further cuts in pay and conditions in a calculated race to the bottom.
“We want a jobs-first Brexit that helps, not hinders, our mission to transfer power, wealth and opportunity to the many from the few.
“We will use powers returned from Brussels to upgrade Britain’s economy and create good jobs right across our country.”
For the Conservatives, Economic Secretary to the Treasury Steve Barclay said: “Labour should look at the Government’s record - by introducing the National Living Wage we’ve given the lowest earners their biggest pay rise in 20 years.
“Labour’s tax rises would mean people have less money in their pocket and they would end up punishing businesses, meaning fewer jobs and lower wages. Only the Conservatives are building a Britain fit for the future.”