Low Pay Commission should encourage firms to voluntarily pay the living wage, says Liz Kendall

The body would not have statutory powers, however

The Government’s Low Pay Commission should be given responsibility for promoting the living wage to business, a Labour leadership candidate has said.

Liz Kendall said she would extend the remit of the body, whose main current job is to set the legal national minimum wage.

Ms Kendall however said the commission would not have “statutory” powers to enforce the living wage and that it would have to convince business to provide increases voluntarily.

“The Low Pay Commission is one of the best examples of what government can achieve when it brings together businesses, employees and trade unions to work in partnership,” she told an event in London on Wednesday evening.

“Rather than tackling the full range of issues around low pay, it is focused on setting the level of the national minimum wage. We must now look at increasing pay beyond that.

“As Labour’s next Prime Minister I would extend the legal remit of the Low Pay Commission to work with employers, unions and civil society to identify practical, non-statutory ways to move wages towards the living wage, sector by sector.

“Giving the Low Pay Commission this additional remit would protect its independence and mean the expertise and institutional support behind the minimum wage can support the living wage as well.”

Ms Kendall said she was particularly concerned about increasing low pay in the care sector, especially for workers who were women.

She said that “one of the first areas” she would take action on would be the social care sector and that the move would help “tackle the inequalities in power, wealth and opportunity that scar our country and hold us all back”.

At the last election Labour pledged to give tax rebates to firms that paid their workers the living wage in the first year of a Labour government, while publicly listed firms would have to report on whether they paid the wage.

The party also said it would increase the minimum wage to £8 an hour by 2020, somewhat below the living wage rate.

Ms Kendall is one of four candidates standing for the Labour leadership, the others being Andy Burnham, Yvette Cooper, and Jeremy Corbyn.