- Party would introduce Make Work Pay contracts incentivising firms to pay Living Wage
- 39,000 people in Edinburgh working for less than the living wage
- Average £445 rebate to businesses meaning over £17 million available to capital firms
Under Make Work Pay contracts, employers would receive a tax rebate of up to £1,000 for every low paid worker who gets a pay rise. With 39,000 people in Edinburgh estimated to be working for less than the living wage and the average rebate set to be £445, this would see £17 million made available for capital firms who pay the living wage.
If all 400,000 low paid workers across Scotland were given the living wage, business would get a windfall of over £180 million.
Research that shows paying the living wage leads to a 25% fall in absenteeism, while 80% of employers believing the living wage has enhanced the quality of the work of their staff and 66% report a significant impact on recruitment and retention within their organisation.
The SNP have previously voted with the Tories against Scottish Labour plans to extend the living wage to the private sector.
Edinburgh East MP Sheila Gilmore said:
A lot of businesses in Scotland want to give a pay rise to their staff but the conditions aren’t right.
That is why Scottish Labour will introduce make work pay contracts to incentivise them to pay the living wage.
This could give a pay rise to as many as 39,000 workers in Edinburgh alone, with over £17 million in tax rebates available to firms.
Businesses would also benefit in the long term through lower absenteeism and staff turnover, and higher performance and morale.
When Scottish Labour tried to extend the living wage before the SNP Government in Edinburgh voted with the Tories to block our plans. The SNP were wrong to deny thousands of Scots a pay rise. Scottish Labour will not let these Scots down.
In May Scotland can decide the general election. We can deliver a Labour Government that will make work pay; we can deliver a government which delivers a living wage.
- Make Work Pay contracts will mean that, in return for paying the living wage within the first year of a Labour Government, businesses will receive back 12-months’ worth of the resulting increased tax and National Insurance revenues received by the Government.
- If the Government introduced this now, firms could receive a 12-month tax rebate of up to £1,000 – and an average of £445 – for every low paid worker who is moved onto a living wage.
- The estimated number of people working for less than the minimum wage in Edinburgh is 39,000. 39,000 x £445 = £ 17,355,000.
- For every extra pound employers pay to raise workers from the National Minimum Wage to the living wage, the Treasury saves on average 49p in the form of lower social security payments and higher tax revenues.
- Labour’s Make Work Pay contracts would mean that employers could claim back the entire increase in tax revenue – an average of 32p in the pound – for the first year.
- Although the bulk of the money in the first year would be paid back to employers, the Government would still see a net saving through lower social security and tax credit payments, and increased tax revenues in future years.
- We will also require listed companies to report on whether or not they pay the living wage.
- List of living wage benefits from the Poverty Alliance available here: http://slw.povertyalliance.org/userfiles/files/SLW%20Benefits%20Nov14(2).pdf
- The SNP has consistently voted against Scottish Labour’s call for the Living Wage to be included in the procurement process. Most notably in Stage 3 of the
- Procurement Reform (Scotland) Act, details found here: http://www.scottish.parliament.uk/parliamentarybusiness/28862.aspx?r=9171&i=86467&c=1737184
- For more information please contact Matt Brennan, Parliamentary Assistant to Sheila Gilmore MP, on 020 7219 7062, 07742 986 513 or firstname.lastname@example.org.