Andy Burnham has pledged to introduce an £11 an hour “living wage” to end the scourge of poverty pay.

He vowed the new wage would be a priority if he won the Labour leadership battle and headed a Labour government after the 2020 election.

Mr Burnham declared his “true National Living Wage” would be set at about £11 and rise to more than £12 in London – almost double the current  hourly minimum rate of £6.50.

Burnham unveils £11 an hour wage plan (pic credit: MEN)

He will officially reveal his plan for the huge hike tomorrow (MON) at a campaign event in Yorkshire.

The new figure is higher than the £9 hourly minimum rate Chancellor George Osborne promised to introduce by 2020 and the £8 an hour planned by ex-Labour leader Ed Miliband.

But Mr Burham said his plan – unlike George Osborne’s “con” which only applies to those over 25 – would apply to all age groups and everyone should be on the new rate by 2025.

Shadow Health Secretary Mr Burnham said his new rate would be linked to the cost of housing, food and household goods.  It would be adjusted to account for people losing their tax credits.

He told the Sunday Mirror: “Osborne’s so-called National Living Wage is a complete con. Millions of young people will miss out and be at greater risk of exploitation in the workplace.

“Osborne needs to think again. As Labour Leader, I will lead a campaign to make him do just that and extend his plans to cover all workers.

“But, under my Leadership, Labour will go much further. We will be utterly intolerant of poverty pay in the UK. Too many people are working harder and harder just to make ends meet. It is disgraceful that apprentices earn just £2.73 an hour.

“The Labour Party I lead will stand for a true Living Wage for everyone. It will be based on the simple principle that the same hour’s work deserves the same hour’s pay, regardless of your age. So I will abolish the youth rate minimum wage, apply the higher rate to everyone and give incentives for companies to go even further.

“Businesses will be helped to pay a true living wage, but as more firms pay this fair wage it would be wrong for the unscrupulous few to hold out. So over the next Parliament I will phase in National Insurance penalties for those not paying the rate. By 2025, we will end the scourge of low pay in the UK forever.”

Mr Burnham will also repeat his commitment to abolish the youth rate minimum wage.  At present, the lower rate means those under 18 can get as little as £3.79 an hour, while apprentices get just £2.73.

Businesses who agreed to pay the higher wage would see the amount of National Insurance Contributions they paid cut in return for signing up.

But firms who failed to paid the new rate will face penalties and higher National Insurance contributions as part of Mr Burnham’s plan to ensure everyone is on his living wage within a decade.

Critics have condemned Chancellor Mr Osborne’s living wage, saying his plan for a higher rate is coupled with moves to slash tax credits for working people.