John McDonnell vows '£10 real living wage'

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• published: 27 Sep 2016
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John McDonnell vows '£10 real living wage'. Labour would introduce a "real living wage" of at least £10 an hour if in power, shadow chancellor John McDonnell has told the party's conference. He said that under a Labour government "everyone will earn enough to live on". He also set out plans to end austerity, fight for "the best" Brexit deal and to build a "manufacturing renaissance". A new National Living Wage, which came into force in April, requires employers to pay workers over 25 at least £7.20 an hour, rising to £9 by 2020. BBC economics editor Kamal Ahmed said that under Mr McDonnell's plans, a £10-plus an hour minimum wage would raise an annual salary for the lowest paid full time worker to £19,250, according to manufacturers' trade body EEF. In his keynote conference speech in Liverpool, Mr McDonnell said Labour had become a "government in waiting". He pledged that if the party won the next general election it would be an "interventionist government" with a "comprehensive industrial strategy" to invest in the UK's future. And he got a standing ovation after ending his speech by saying of his policy programme: "In this party you no longer have to whisper it - it's called socialism." The shadow chancellor - a key ally of leader Jeremy Corbyn on the left of the party - also announced plans: The new mandatory National Living Wage (NLW) was announced in last summer's Budget by the then Chancellor George Osborne, in an effort to create a higher-wage, lower-welfare economy. Mr McDonnell, who praised the introduction of the national minimum wage as one of Labour's "greatest achievements", said Labour would go further. It felt like John McDonnell had been waiting for a long time to say it. Up on the conference platform, at the very end of his speech, he told delegates, "you no longer have to whisper it, it's called socialism". In fact, as other MPs reminded me after his speech, Tony Blair's controversial amended version of Clause 4, included the phrase, "The Labour Party is a democratic socialist party". It was never an officially banned word, although no question, until Mr Corbyn's victory, talk of true socialism was not a popular subject at the conference lectern. "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." He said it would be a "fundamental part" of Labour's "new bargain in the workplace". Mr McDonnell, who first announced his hopes of increasing the minimum wage level to £10 a year ago, said there would be support for small businesses to ensure that the higher rate did not cost jobs. Labour sources said the £10 level would be in place by 2020 if there was an early general election that Labour won. Speaking earlier to BBC Breakfast, Mr McDonnell said Labour would be an "interventionist government" working with the private sector. And he pledged that the UK would borrow in the short term for long-term investment and "future prosperity". In his conference speech, the shadow chancellor said Labour would not stand by and let industries such as steel flounder, and he promised to "work with" wealth creators and entrepreneurs. He said digital advances were encouraging firms to return to the UK but the Conservatives were "too blinkered by their ideology" to take advantage. The danger many businesses highlight is that the living wage is becoming politicised, a battle between two political parties keen to show the effort they are making on low levels of pay. The Low Pay Commission - which has guided increases in the minimum wage since its inception in 1999 - was mandated to balance income levels with impact on employment and the strength of economic growth. Many businesses believe it is a mandate that should not be abandoned...