Labour's plans for 'living wage'

Plans to deliver a "living wage" of at least £7.20 per hour for millions of people in the public and private sector are being put at the centre of Labour's bid to return to power, Ed Miliband has said.

The leader of the opposition said the wage - the minimum hourly rate needed for an acceptable standard of living - was a key plank of his "One Nation" vision to share prosperity.

As part of its policy review, Labour is looking at three ways of making the pay terms the new norm, including naming and shaming listed companies who do not pay the wage through corporate governance rules.

It is also considering introducing rules that will see Whitehall contracts awarded to firms who pay workers the living rage or above and giving Treasury-funded incentives to companies who introduce the wage structure.

In an interview with the Independent on Sunday, Mr Miliband said: "You go out, slog your guts out...you deserve a decent wage if the company can afford it.

"We've got a growth crisis in Britain but we've also got a living standards crisis, because the proceeds of economic growth are not being fairly distributed any more.

"This is the next step for One Nation, because One Nation is about everybody having a stake in society. It is about prosperity being fairly shared."

He added: "It is about giving people a proper stake in the future of the country."

The Institute for Fiscal Studies estimates that for every person moved on to the living wage, the Treasury would save around £1,000 from less spending on tax credits and from increased tax revenue.

A number of major firms already pay workers and contractors a living wage - which stands at £8.30 an hour in London - or higher. Barclays has paid the living wage in London since 2007, while 19 local authorities have been accredited as "living wage employers".