UK Labour party would give tax rebates to firms that pay living wage
Source: The Independent
Firms that pay their staff the living wage will be given a tax rebate of up to £1,000 for each worker by the next Labour government, potentially increasing incomes for millions of employees, Ed Miliband pledges today.
In an interview with The Independent on Sunday,, the Labour leader said it would be his government's "central mission" to spread the living wage, currently set at £7.45 an hour, across the country, and among private and public sector employers.
A Labour government would encourage businesses to sign up to "make work pay contracts" within the first year of parliament. In return, for every low-paid worker whose earnings were lifted to the living wage, firms would receive up to £1,000, or an average of £445, for each individual, for 12 months.
The money would be funded directly from the increased tax and National Insurance revenues received by the Treasury, and from savings made in tax credits and benefit payments, which would be lower because more people would be lifted out of in-work welfare. For every extra £1 that employers pay to raise earnings to the living wage, the Treasury saves 49p in lower social security payments and higher tax revenues. The Government would pay back 32p to firms for every £1 saved.
Read more: http://www.independent.co.uk/news/uk/politics/exclusive-labour-would-give-tax-rebates-to-firms-that-pay-living-wage-8919252.html
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