John McDonnell vows ‘£10 real living wage in 2020’

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Labour would introduce a “real living wage” of at least £10 an hour in 2020 if in power, shadow chancellor John McDonnell has announced.

The announcement was made yesterday by McDonnell, who said it was “the level needed for a decent life” and that under a Labour government “everyone will earn enough to live on”.

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.

Mr McDonnell told conference that the Living Wage — currently £7.20 per hour for workers aged over 25, £6.70 per hour for those aged 21 to 24, and £5.30 per hour for ages 18 to 20 — was too low.

He said 200,000 workers were getting less than the legal minimum.

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 to “end the social scourge of tax avoidance” by doubling the number of HMRC staff working in this area and banning “tax-dodging companies” from winning public sector contracts

He also pledged to ensure there are “no more (former BHS owner) Philip Greens” and to rewrite the Takeover Code to make sure every takeover proposal has a clear plan in place to pay workers and pensioners

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.

In a keynote speech at Labour conference in Liverpool, Mr McDonnell said one of Labour’s “greatest achievements” was the introduction of a national minimum wage, “lifting millions out of poverty”.

He added:

“The Tories opposed it, claiming it would cost millions of jobs, but – united in purpose – we won the argument,” he said.

“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.

“This will be a fundamental part of our 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.

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