Labour leader Ed Millband is planning to offer firms a 1,000 GBP tax break for every salary increase they provide.
This is part of a strategy to decrease the number of individuals living without earning minimum wage. This means that they are not earning enough to provide for basic needs such as housing, clothing and nutrition.
Millband claims if he is elected he will implement the Living Wage tax break, which is a generous opportunity for firms to save money, while helping many in need of a salary increase. The proposal comes as a lead-up campaign ahead of the upcoming election.
Millband explains, “If employers agree to move to paying the Living Wage to their workforce, we will provide them with an incentive, offering them in the first year the money that government would receive in higher tax revenues.
“The result: Working people get higher wages, employers get support to help to make the transition, Government cuts the cost of social security for the long term.”
One in every five individuals in the United Kingdom are being paid less than what they need to survive but so far, only 400 employers have agreed to the scheme.
He explained that the government will be able to save money as less money would have be spent on tax credits. In addition, the tax break will be paid by the increase of tax paid to the government due to the increase in salaries.
This new strategy comes after Millband, on behalf of Labour, promised to suspend energy bills for almost two years if his party is elected. If elected, this freeze is set to begin in May 2015.
He vocalized his concerns against energy companies in the country commenting on the constant price increase over the last two years. The largest energy companies have increased their prices by almost 10% causing household bills to reach up to 1,500 GBP.
Energy companies have replied by stating the price increase is due to the increasing cost of sustaining environmental and social responsibly in accordance with the law.
They have also stated they are willing to reduce prices if the cost of their own bills go down. Ministers have agreed to review the price of ‘environment tax’ on energy companies which could mean a decrease in bills for residents of the UK.
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