Ed Miliband steps up his bid for the Labour leadership today by promising substantial tax cuts for any company prepared to guarantee a "living wage" of at least £7.60 an hour. The commitment is designed to appeal to the party's core supporters who believe New Labour took insufficient measures to combat low pay, despite having introduced a legally binding minimum wage that now stands at £5.83 an hour.

A company that agreed to set the "living wage" as its minimum rate – as opposed to the legal minimum – would pay lower rates of corporation tax.