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John McDonnell promises minimum wage over £10 an hour and signals support for universal basic income

Published 26/09/2016

John McDonnell speaks during the Labour conference
John McDonnell speaks during the Labour conference

Labour's John McDonnell has pledged that a Labour government would introduce a living wage that would likely be more than £10 an hour.

The shadow chancellor told his party's conference in Liverpool that he would task a new body to set the wage at an appropriate level, which studies have suggested would be above £10.

Mr McDonnell also said he wanted to learn more about the idea of a “universal basic income" which is being looked at by some European governments.

His comments were met with immediate opposition from business groups.

In a wide ranging speech, the shadow chancellor also promised to increase co-operative entrprise, boost HMRC's tax avoidance prevention, rewrite laws to protect pensions when a company is sold and focus the tax system on wealth instead of income.

He said: "Under the next Labour government, everyone will earn enough to live on. When we win the next election we will write a real living wage into law.

"We'll charge a new Living Wage Review Body with the task of setting it at the level needed for a decent life. Independent forecasts suggest that this will be over £10 per hour.

"This will be a fundamental part of our new bargain in the workplace."

Mr McDonnell promised at last year's conference that Labour would introduce a minium wage of at least £10.

Under George Osborne tenure at the Treasury, the Tories introduced a plan to create a new National Living Wage at £9 an hour by 2020.

But Mr McDonnell reminded Labour delegates that the idea of a minimum wage had originally been fought by the Tories.

He called the minimum wage one of the "greatest achievements of the government elected in 1997", though he stopped short of mentioning by name Tony Blair, the Prime Minister who introduced the legislation.

He went on: "I am also interested in the potential of a Universal Basic Income, to learn from its potential from the experiments currently taking place across Europe."

The policy would lead to a replacement of means-tested benefits with a standard flat-rate payment for all citizens.

Tim Thomas, Head of Employment & Skills Policy at EEF, the manufacturers’ organisation, said of the minimum wage plan: “Whilst we are supportive of a national living wage, this proposal would be extremely damaging."

EEF estimates £10 an hour would take the minimum wage to £19,250. With add on costs this would rise to approx. £23,000 to take on a new employee.

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