Back in April, Chancellor George Osbourne declared the National Living Wage as £7.20 per hour for over 25 year olds, and today Jeremy Corbyn hits back calling it a ‘corruption’ of the idea and purpose of the ‘living wage’. He accused them of using the name but paying workers less than is enough to live off. Jeremy Corbyn, the Labour leader, explained how the new pay rise was not deemed fit to be called a living wage – much to the disgust of David Cameron.
It has been revealed by experts that those living outside of London, need £7.85 per hour to survive (£9.15 for those living inside the capital). Today in parliament, during the Primeminister’s questions, pulled David Cameron up on the issue of the living wage, claiming that it was introduced by labour and that the wage, proposed by the chancellor, is a corruption, and not a proper living wage.
For the past 15 years, the Living Wage Foundation have campaigned for the National Living Wage, and it was clear that David Cameron had no qualms with the end result. He implied that Corbyn should strongly support the new living wage as it has provided a £20 pay rise for some of our poorest people. Although the wage is expected to rise by 2020 to £9 – this will still be less than what is recommended for people working in London. We think Jeremy Corbyn might have a point. Ironically, the rise of the NLW also comes in the same bill as the Tory cuts to Working Tax Credits. A shocking report has been released by one of the UK’s leading trade unions. Figures released by Unison show that a family with two adults over 25 and two children could look at losing £1, 165 a year. If tax credits were to disappear completely, it is thought that The Living Wage would need to be over £10 per hour.
Unfortunately, those receiving the National Living Wage will not get out of paying income tax. Cameron had promised that those receiving any kind of minimum wage would not be expected to pay income tax. However he has no changed his mind, saying that this does not apply to over 25’s (who receive the brand new National Living Wage). As a result, those £7.20 an hour earners will still be taxed. it is thought that those up north in Yorkshire and Humber will benefit most from the recent changes, whereas those living in the capital will only see 14% of workers benefiting from them.