Shadow Chancellor John McDonnell has said he understands why Watford FC may have previously been unable to pay all staff the real living wage.

The Hayes and Harlington Labour MP was speaking about individual companies and operations “like Watford Football Club” who could find it tricky to pay higher wages.

Last week, Watford Labour Party called on the Hornets to raise wages and pay their staff a minimum of £9 per hour.

However, a spokesman for the club said staff have "for some time been receiving a salary at least in line with the living wage",

He added the club will be rolling out the living wage across its matchday casual workers.

For smaller companies struggling to pay the real living wage, Mr McDonnell said the Labour party hopes to introduce an employment allowance support to assist them.

But the Shadow Chancellor said in addition to a “decent” income through wages, “people want more of a say of their local companies too and a bit more of a stake”.

He added: “For larger companies over 250 employees, we are introducing a policy called the inclusive ownership scheme, whereby employees become shareholders.

“For the larger companies, it means handing over one per cent of shares a year for 10 years up to a maximum of 10 per cent.

“The idea is that employees will not just get a decent wage, but they’ll also have a stake in the company.”

The Shadow Chancellor added it would be owned “collectively” and people in turn would receive a “shared dividend as well as a say of the companies policies”.

Mr McDonnell also felt that by 2020 it would be possible to raise the real living wage to £10 an hour.

He said: “I don’t just think its feasible but it has to happen, it’s required.

“We have to get money back in people’s pockets so they can start spending back in the local high street as well and make sure that there is money going into the local economy that will regenerate local economies.”