Britain's three biggest unions yesterday demanded a £1 pay rise for the lowest-paid public sector workers to bring them up to the living wage.

GMB, Unison and Unite - which together represent 1.6 million local government workers - formally submitted a pay claim to employers today.

The claim steps up their campaign to put an end to poverty wages in the public sector.

The living wage is a voluntary rate of pay designed to help low-paid workers to afford a basic standard of living.

It was increased yesterday by 20p to £7.65 per hour nationally and by 25p to £8.80 per hour in London. The compulsory minimum wage is currently £6.31 per hour.

Half a million local government workers earn less than the current living wage and a million earn less than the coalition's "low pay" threshold of £21,000 a year.

Unison local government head Heather Wakefield explained that the government needs to set a precedent on wages.

She said: "The government and local councils can't have it both ways. Politicians from all parties talk about the need to end low pay and introduce the living wage. This must apply to local government workers and not just to those in the private sector.

"It is deeply disturbing to hear the stories of local government workers resorting to food banks. They have suffered an 18 per cent drop in earnings since the government's austerity measures were introduced. That's why we want the same flat rate increase to be applied to everyone."

The situation is so bad for local government workers that they are close to industrial action, said GMB national secretary Brian Strutton.

"GMB members are telling us that they are ready to take action to break the cycle of pay restraint and that's what we will be preparing the ground for," he said.

"The claim we are lodging today is just the start of our campaign to win a fair deal for council staff."

The Trades Union Congress also weighed in on behalf of private sector employees, saying that despite an £83 billion increase in the cash reserves of the biggest employers in the last five years, too few had agreed to pay the living wage.

Meanwhile Labour leader Ed Miliband pledged to offer tax breaks to firms paying the living wage if he was voted into power.