Jeremy Corbyn announces Labour would raise legal minimum wage to £10 an hour by 2020
Labour would raise the legal minimum wage to £10 an hour by 2020 if it wins the next general election, Jeremy Corbyn will say today.
The Labour leader will say employees on basic earnings would be better off by thousands in 2020 compared to the current expected rate under the Government's national living wage.
The new policy announcement could lead to fears that businesses, particularly in the retail, hospitality, social care and outsourcing sectors, would struggle to cope with higher wage costs.
The former Chancellor George Osborne revealed plans in 2015 for a compulsory living wage for workers aged 25 and over.
The Office for Budget Responsibility (OBR) estimated that six million workers would enjoy higher pay as a result of the proposal, including around 2.75m workers who will receive a direct pay rise.
However, the independent fiscal watchdog also predicted it will result in about 60,000 fewer people in work in 2020 and a reduction in total hours worked of almost four million per week.
Labour say their plans will benefit most people who live and work outside of London and the southeast.
They have also pledged to abolish the lower rate for workers aged under-25, who they say will have an extra £4,500 in their pocket as a result of the policy.
Mr Corbyn, on a visit to Luton, will say: "Low pay blights the lives of huge and growing numbers in our country and fuels widening inequality.
"The government's re-branding of the minimum wage to the national living wage hasn't dealt with the real problems of low pay and rising cost of living.
"That's why Labour will raise the legal minimum wage for all to at least £10 an hour by 2020, giving more than five and a half million people a pay rise in the process.
"Labour's real living wage will immediately boost the incomes and opportunities of more than 20% of the workforce, especially in sectors such as retail, care and hospitality.
"We know that where work pays, living standards rise and reliance on benefits falls.
"This is the right thing to do and a Labour government will be committed to re-balancing our economy so that no one and no community is left behind."
The flagship Labour policy, announced last year, would leave full-time employees on basic earnings better off by more than £2,500 while 21 to 24-year-olds on lower wage rates would be in line for a £4,500 hike.
Around 5.6 million workers would see their pay go up and Northern Ireland, the East Midlands and Yorkshire would be among the areas to benefit most with one in four residents affected, according the party.
The National Living Wage rate for over 25s is expected to rise from £7.50 this year to £8.75 by 2020, according to Labour. It said the £7.05 for 21 to 24 year-olds is set to increase to £7.75.
