McDonnell Pledges to Raise Minimum Wage in ‘New Deal’ for U.K.

  • Future Labour government would push to eradicate poverty
  • Says Tory hard Brexit would sever Britain’s history with EU

Labour would raise the U.K. minimum wage to more than 10 pounds ($13) an hour and prop up key industries as part of a new deal for the country’s economy if it comes to power, the opposition party’s shadow finance minister, John McDonnell, pledged on Monday.

A Labour government would work to eradicate poverty by enshrining the higher minimum wage in law, a pledge McDonnell first hinted at last year. Labour is also calling for a “new deal” after Brexit, backing single-market access and the free movement of European Union workers, McDonnell told his party’s annual conference in a speech in Liverpool, northwest England.

John McDonnell on Sept. 26.

Photographer: Leon Neal/Getty Images

“Under the next Labour government, everyone will earn enough to live on,” McDonnell said. “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.”

By reiterating many of the policy pledges he made last year, McDonnell is underlining Labour is unlikely to return to the political center after shifting to the left since the election of Jeremy Corbyn as party leader, promising an interventionist state and more support for workers. His speech comes two days after a new leadership vote strengthened Corbyn’s mandate, despite growing discontent among the party’s lawmakers.

Polls show Labour as much as 15 percentage points behind Prime Minister Theresa May’s Conservatives, indicating the difficulty it faces in regaining power under Corbyn. The next general election isn’t due until 2020.

“The old rules of the global economy are being rewritten for us,” McDonnell said. “The winds of globalization are blowing in a different direction. They are blowing against the belief in the free market, and in favor of intervention.”

This increased state spending and investment would be financed by a 250 billion-pound National Investment Bank, funded through borrowing.

McDonnell also said Labour would oppose the “hard Brexit” being sought by many Tories.

A hard split would be “to walk away from 30 years of investment in our relationship with Europe,” McDonnell said. “Working with our socialist and social democratic colleagues across Europe, our aim is to create a new Europe which builds upon the benefits of the EU but tackles the perceived disbenefits.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE