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Labour leadership hopeful Lisa Nandy has hit out at large employers who fail to pay their workers a living wage.

The Wigan MP has said the government must stop subsidising employers who underpay their workers leaving the welfare system to pick up the pieces.

She told the Mirror: "Too many massive companies still pay their workers less than a living wage, forcing them to rely on tax credits and Universal Credit so taxpayers pick up the tab."

A living wage is £9.30 an hour outside of London and £10.75 in the capital according to the Living Wage Foundation.

Ms Nandy added: "If I become Prime Minister I will make these corporations settle the tax bill for the trail of in-work poverty they are leaving behind them.

"I would be a Prime Minister who champions the businesses who pay their taxes, invest in their staff, and engage meaningfully in their communities.

"This is not just about financial sustainability. It's about making your contribution and showing some respect for the contribution your workers make too."

(Image: Adam Gerrard / Daily Mirror)

It came as Deputy leadership candidate Angela Rayner said Labour members should have a say in choosing the party’s candidates for the House of Lords.

Ms Rayner said: "Labour demonstrates who we are - through deeds not words.

"We might not be able to scrap unelected Peers yet – we need to be in government for that - but we can practice what we preach by ensuring our members and affiliates have a say in who makes law on our behalf.

“People’s peerages would end the Westminster bubble grip on who sits in our second chamber, and put real people in the driving seat.”