I disagree that the old timers or 'proper jobbers' are keeping the instructional wages low. A proper jobber is likely to be paid between £400-£700 for a day rate and irrespective of what they are flying, are less likely to work for say £50 per hour/£250 per day. They may not need to instruct between proper jobbing but if they do, they probably want to be paid according to their experience and/or worth.
If they do need to instruct between proper jobbing then it's probably not a proper job!
If the instructor wages are to increase to a good standard then the aircraft hourly rate must increase.
Well done to Hughes500 for paying a respectable instructor rate. More schools should follow.