A top union official was today at the centre of a cash row after demanding a wage rise for low paid workers in factories and council departments.

An employers organisation dubbed the campaign in North Lanarkshire “barmy”, while local council chiefs – grappling with multi-million pound budget cuts – would not comment.

The row comes after Richard Leonard, a senior union official with the GMB, called on the private and public sectors to pay their staff an hourly rate of at least £7.

He says such a move would benefit tens of thousands of workers who are trapped below the breadline throughout North Lanarkshire.

Mr Leonard told a conference in Coatbridge that a “living wage of £7” would boost the earnings of more than a fifth of all women workers in the area.

He said: “The introduction of the national minimum wage in 1999 was a huge step forward but there are too many people in work but still poor.

“In North Lanarkshire alone more than 31,000 working families receive child or working tax credit to subsidise low pay. That’s a subsidy for employers who pay their workers wages below the breadline.”

But David Lonsdale, of CBI Scotland, hit back: “At a time when firms continue to struggle and jobs are being shed across the country, the idea that employers can afford a bumper pay rise of the magnitude suggested by the unions is frankly barmy.”

Mr Leonard also wanted North Lanarkshire Council to introduce a £7 minimum hourly rate in line with a similar move adopted by Glasgow City Council last year.

Council leader Jim McCabe recently said vital services would be maintained but warned that savings of £75 million would need to be made over the next four years.

No one from North Lanarkshire Council was available for comment.