Scottish government blasts national living wage plans

Ms Cunningham also claimed the plan discriminates against under-25s. Picture: TSPL

Fair Work Secretary Roseanna Cunningham branded the proposals for a living wage of £7.20 an hour as a “misappropriation of the term”.

She also claimed the plan discriminates against under-25s and will bring further complications and inequalities to the national minimum wage structure.

Under the plans announced by George Osborne, the minimum wage for over-25s will rise from £6.50 an hour to £7.20 in April next year, before rising to at least £9 by 2020.

Ms Cunningham has outlined the Scottish Government’s criticisms in a submission to the Low Pay Commission’s consultation on the proposals.

She said: “The so-called national living wage announced in the UK Government budget is not a living wage and should not be referred to as such.

“It is simply an enhancement of the national minimum wage which disgracefully discriminates against the under 25s.

“Employers also do not need further complications in the national minimum wage structure and I would encourage all bodies looking at this to ensure that younger workers are treated fairly.”

The Scottish Government promotes a living wage of £7.85 an hour, with businesses north of the border encouraged to sign up to a voluntary accreditation scheme.

Ms Cunningham said: “We are working hard to increase the number of employers paying the living wage. By this I mean the real living wage, which is calculated according to the cost of living.

“There are now over 300 organisations across Scotland that recognise the tangible benefits to their business of being accredited, huge progress in the last 12 months.

“I have made these points very clear in the Scottish Government’s submission to the Low Pay Commission, whose very future should be seen as under threat from the UK Government plan.

“The UK Government’s decision to set an arbitrary rate for this national living wage fundamentally challenges the value of having an organisation providing independent advice on wage levels across the UK.

“I call upon the UK Government to set out a clear plan for moving towards a real living wage for all - a wage that truly reflects the cost of living.”

A UK Government spokesman said: “The new national living wage is an essential part of moving to a higher wage, lower tax, lower welfare society where work always pays and the majority of households are better off.

“It is expected to directly boost the wages of nearly three million people and will mean a full-time worker earns £2,000 more per year by 2020.

“For younger workers, the priority is to secure work and gain experience. In order to maximise the opportunities for younger workers to gain that experience, the national living wage will only apply to workers aged 25 and over. The wages of younger workers will continue to be underpinned by the core national minimum wage.”