Labour 'would link minimum wage to average earnings'

The Labour leader today unveiled a report by Alan Buckle, the former deputy chairman of KPMG International, which proposes an overhaul of the Low Pay Commission.

In a speech to party activists in the West Midlands today Miliband said: “A Labour government will establish a clear link between the level of the minimum wage and the scale of wages paid to other workers in our economy.

“We will say workers on the minimum wage must never be left behind because those who work hard to create our nation’s wealth should share in it.”

He said the party would announce an exact figure - covering the years 2015 to 2020 - nearer the general election.

Kate Nicholls, strategic affairs director for the Association of Licensed Multiple Retailers (ALMR), said: "We would need to understand exactly what the Labour leader is proposing but we would be concerned to see a politically driven automatic uprating take the place of the current measured, independent economic assessment. The Low Pay Commission must be allowed to get on with its job free from political interference and undue influence. There is a clear risk ahead of the General Election that politicking in this area could result in unaffordable promises and unsustainable increases which could damage investment in a skills, training and jobs."

Alexander Jackman, head of policy at the Forum of Private Business, said: “It is illegal for employers not to pay the National Minimum Wage at present and we support any sensible proposals to tackle that, which don’t pose further regulatory burdens for the vast majority of compliant businesses.”