Britain's opposition Labour party leader Ed Miliband
Britain's opposition Labour party leader Ed Miliband has promised to increase the minimum wage to £8 per hour - an increase of at least £1.50.Reuters

Labour will raise the national minimum wage to at least £8 an hour if they win the 2015 general election, Labour leader Ed Miliband has announced.

The minimum wage is due to rise from £6.31 an hour to £6.50 on 1 October, but said that his party will add £1.50 an hour to that by 2020.

One in five workers in the UK – more than five million people – are categorised as being on low pay, defined as wages of less than £7.71 an hour.

The increase would add around £60 a week, or £3,000 a year, to the wages of workers currently on the minimum wage.

Mr Miliband told the BBC: "This country isn't working for so many people. One-in-five of the men and women in this country… who do some of the most important jobs, are on the lowest pay, and we are committed to changing this. We've got to write the next chapter in the battle against low plan, and that is what we intend to do.

"There's a clear choice: the Tories have a plan for the rich few, we have a plan to make hard work pay in this country. We need big change in the way this country works and that is what the Labour country is going to do."

Five-year wage plan

The timing would give businesses five years to gear up for the changes, which Miliband said would be cost neutral to the taxpayer.

"What's happening at the moment is that we are paying billions in subsidising people on low pay, in benefits, and in tax credits. Some estimates say for every £1 that the minimum wage goes up we save 50 pence in benefits and tax credits. Whereas this going to save money in benefits. Overall this is going to have no extra cost to the public pence."

The planned increase in the minimum wage would affect around 1.4 million jobs and would be introduced in annual stages by the Low Pay Commission before October 2019. A minimum wage of £8 an hour will bring the UK in line with Australia, and some EU countries including Belgium and Germany.