More than 40,000 people in Bradford are being paid less than a “living wage”, a study has found.

It means 23 per cent of city workers take home less than the minimum that experts have calculated is required to have an acceptable standard of living.

And that proportion rises to 26 per cent in the worst-hit part of the West Yorkshire – Kirklees – where 34,000 staff earn less than £7.45 per hour.

Across West Yorkshire, a total of 154,000 people are paid less than a living wage, including those in Calderdale (13,000) and Leeds (66,000).

Matthew Bolton of Citizens UK, the organisation that campaigns for the living wage, said: “This research shows that working poverty in Britain is a growing scandal.”

The study, by auditing firm KPMG, was released to mark Living Wage Week, which presses for more employers to agree to pay the voluntary minimum. It saw the living wage raised by 20p to £7.65, outside London – £8.55 in the capital – far more than the legal minimum wage, which stands at just £6.31 an hour for over-21s.

Meanwhile, Labour leader Ed Miliband yesterday confirmed his plan to offer tax breaks to encourage more employers to sign up to the campaign.

They will be offered a rebate of up to £1,000 for every low-paid worker who gets the pay rise, in the first year of a Labour Government.

Mr Miliband said the prime minister had “nothing to say” about a living wage, saying: “We have a low pay emergency in this country.”

And he told employers: “We will give you a 12 month tax rebate of 32p for every extra pound they spend.

“Make work pay contracts will raise wages, keep the benefit bill down and tackle the cost of living crisis.

“It is a good deal for workers, business and the taxpayer too.”

Supporters of the living wage argue that it can also save companies money, by improving staff morale and performance and by reducing staff turnover.

The KPMG analysis found that, across the UK, 5.2m people were paid below the living wage this autumn – a rise of 400,000 in one year.

However, this week, the director-general of the CBI warned Mr Miliband’s plan could push up prices on the High Street.

Giving the example of a shoe shop, John Cridland said: “Whether it can pay £8.55 depends on whether local families going in to buy shoes for the school term for their kids can pay extra for the shoes.

“If you can sell shoes at a higher price and the local people can pay it, you can pay £8.55. If not, you pay £6.31.”