In relation to pay, all parties have expressed their support for the National Minimum Wage (the “NMW”), as well as the Living Wage. The Lib Dems have promised to tackle low pay by asking the Low Pay Commission to consider ways of raising the NMW without damaging employment opportunities. They have promised to improve enforcement action, particularly in respect of abuses by employers seeking to avoid paying the NMW by treating employees as workers or self employed. The Lib Dems also propose to achieve this by reviewing practices such as unpaid internships. As part of their plan to help family finances, the Lib Dems have pledged to establish an independent review to consult on how to set a “fair” Living Wage across all sectors and this Living Wage will be paid in all central government departments and executive agencies from April 2016 onwards with the hope of encouraging other public sector employers to follow suit.
Labour have promised to raise the NMW to more than £8 an hour by October 2019 bringing it closer to average earnings and to provide local authorities with a role in strengthening enforcements taken against those paying less than this. The Labour manifesto also refers to using government procurement to promote the Living Wage, alongside wider social impact considerations, requiring publicly listed companies to report on whether or not they pay the Living Wage. Additionally, Labour pledges to give employees a voice when executive pay is set by requiring employee representation on remuneration committees. As to the Living Wage, the Labour manifesto sets out the Party’s plans to introduce “Make Work Pay” contracts, with these contracts providing tax rebates to companies that commit to paying the Living Wage in the first year of a Labour Government. Labour will also require publicly listed companies to report on whether they are paying the Living Wage.
The Conservatives have promised to support the NMW with a view to increasing the NMW to £8 an hour by the end of 2020, with the Personal Allowance rising automatically in line with this to £12,500 such that people working 30 hours a week on NMW will no longer pay any Income Tax at all. The Conservatives have also pledged to support the Living Wage and will be encouraging businesses to pay it if they can afford it.