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Scottish Labour leader Iain Gray has announced plans to boost public sector workers' pay to more than £7 an hour.

Despite tough spending cuts on the horizon, he told his party's UK conference that the lowest paid workers must be protected.

Mr Gray said he would also restrict high salaries in the public sector.

All the Scottish parties are on an election footing in the run up to next May's Holyrood election.

Mr Gray told delegates in Manchester of his manifesto commitment to establish a "Scottish living wage", which the private sector will also be encouraged to take up.

He said: "There are going to be difficult decisions and there will have to be pay restraint in the public sector, especially at the top.

"But Labour values demand we protect the lowest paid.

"At the same time, Labour will also seek to restrict the highest paid salaries in the public sector."

The policy is similar to the one announced last year by the then leader of Glasgow City Council, Steven Purcell.

The national minimum wage currently sits at £5.80 an hour for those above the age of 22.

Industrial action

In August, Scotland's council leaders decided to impose a three-year pay deal, after a breakdown in talks with unions.

The deal, affecting about 150,000 staff, is significantly less generous than a recently rejected offer and could lead to industrial action.

The move will see staff receive a rise of 0.65% backdated to April, followed by pay freezes next year and in 2012.

Mr Gray's speech comes after Ed Miliband was unveiled as the new Labour leader.