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A minimum wage rise will show the Conservatives are a party for all working people

17 January 2014

The Chancellor’s announcement that he’s recommending an above average increase in the minimum wage is very welcome news. It’s something Renewal has been campaigning for since our launch in July.

Wages have fallen behind prices for almost a decade now. The prosperity of Blair’s boom didn’t reach the low paid and it was the working poor who were hardest hit by the recession, meaning that the minimum wage is worth £1,000 less now than it was in 2008. Now that the economy is firmly on the road to recovery it’s the right time to raise the minimum wage. We have to ensure that prosperity and the benefits of the free market reach everybody in society and this increase is an important step towards that goal.

A minimum wage increase will help to make work pay, helping to cut the benefit bill and reduce the amount that the state pays out in tax credits. It shows that our party understands the impact of low pay of individuals, their families and their communities. It will make life a little easier for some of the poorest in society, illustrate compassionate Conservatism at work and show that the Conservatives can be the real workers’ party.

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This is a hugely welcome move and important to showing how the Conservative Party can be the party for all working people. It provides an important foundation to build on as the Party takes much needed steps to broaden its appeal.  The party should also be seen as championing the consumer and championing housebuilding to show that its sharing the prosperity that will flow from the recovery.

The lowest paid spend between a third and a half of their income on rent and are the hardest hit by the ongoing housing shortage. We should commit to building at least a million new homes over five years, emphasising that age-old Conservative message of  the importance of ‘ a home of your own’ and again extending the property owning democracy to the lowest paid.

Conservatives should also never be afraid to stand up for the consumer where they’re being ripped off. The party shouldn’t be afraid of following in the footsteps of Teddy Roosevelt and taking action against vested interests and monopolies who are abusing their market position to the detriment of the consumer, the worker and the free market.

George Osborne was right to take action against pay day loan companies that prey on the poorest and we should be equally unafraid to take action against rogue landlords, rip off utilities or other companies that overstep the line. That’s why we need a Secretary of State for Consumer Protection to be a powerful Cabinet level voice to stand up for the consumer.

The increase in the minimum wage is absolutely the right thing to do. The Party that, wrongly, opposed the introduction of the minimum wage is now leading the debate over low pay and taking a decisive step to help the working poor. This is a massive step forward to ensuring that the Conservatives are seen as the real workers’ party.

David Skelton is Director of Renewal.

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Show comments
  • Radford_NG

    Take a look at the USA.(Figures from TIME)

    USA;minimum wage wage levels:

    Federal $7-25
    California $10
    NY state $9
    Wash.DC $11-50

    Dozens of states and localities are enacting measures to increase/tie pay to inflation.

    This is supported by 50% of Republicans.

    California and NY are amongst the most dynamic places in the USA/World (arguable where most people in the world want to live).

    These are things to think about.

  • Frank

    Sorry David, this just shows how rattled the tories are about the pending elections, it doesn’t show that the tories are a party for all the working people.

  • davebush999

    Raising the minimum wage will do nothing for the low paid, as they will, pound for pound, lose housing benefit and tax credits. The only winner with this sham will be the treasury as they will be paying less benefits. The other losers will, of ccourse, be the small byusinesses who have to pick up the tab or make staff redundant.

  • Jimble

    Does anyone believe that Osborne will deliver on his promise or find some way to back out of it?

  • Smithersjones2013

    The Tory’s damascean conversion to the darkside with its cynical short termism is almost complete.

    Yes this will give people on minimum wage a nice little bribe to Vote Tory and yes it will encourage everyone on hourly rates on the minimum wage to expect more. This in turn will push average earnings upward and relieve cost of living concerns and for a while likely push up tax revenues marginally. All very good and understandable one might think. However, what it will do in the medium to long term is cost jobs, reduce our international competitiveness and drive tax revenues down.

    There are three phases of employment in a large business. Permanent employment indicating the company is competitive and functioning successfully in everyone’s eyes (including shareholders). Insourcing contractors where companies dispense with the overheads of employment (that also encourages large scale work immigration to force rates down) and thirdly total outsourcing (driven by the new lack of international competitiveness) often abroad to tax and regulation regimes which are far more economical to deal with than the UK. When the third stage occurs jobs are lost permanently.

    Increasing the minimum wage encourages increases in earnings across the board (to maintain relative differentials) and as such will push companies in the former phase into the next stage and those in the middle stage into the final stage.

    Of course smaller businesses won’t have many options and after struggling to accommodate such increases in the medium term will just have to cut jobs if they don’t improve their business pro rata.

    So Tories welcome it as you may but your party are doing this country no favours yet again.The bizarre is thing that on the one hand having been seen to have done their best to make business more competitive why through things like this and their malevolent energy policies are they conspiring to undo the little good work they have done?

  • He’s Spartacus

    No it won’t.

    It will show their contempt for the aspirational unemployed.

    The Nasty Party indeed….

  • sfin

    Mr Skelton – when politicians talk to us like we were 5 years old and use phrases that have come directly from the Blair bumper book of politics – like “right thing to do” it actually turns my stomach.

    You’re fooling nobody.

  • sir_graphus

    Disagree; minimum wager earners won’t vote Conservative. The floating voter, squeezed middle and all that, sees the rich disappearing into the distance, tax free, while the distance between them and the poor gets smaller, however hard they work.
    They need target the struggling middle, as Milliband did earlier this week with such breathtaking hypocrisy.

  • Alex

    I’m slow today; I’ve only just got it. A sharp increase in the minimum wage will not only look good to the uninformed but there is another benefit to the government. It’ll push unemployment up, so ensuring that Carney won’t push up interest rates before the next election. I suspect the political calculation is that the rise in unemployment will cost fewer votes than a rise in interest rates would have. This is all guesswork though.

  • Paul W

    As a (so called) working class Brummie, I have always voted Conservative as have most of my family and friends.

    Labour have never increased the wealth of the country. All they do when in power is spend what the previous government secured and then go borrow more to be paid back by our children and grandchildren.

    Labour, the workers party?

    Joking, surely?

  • Alex

    Any discussion of the minimum wage that doesn’t even mention the possible impact on jobs is a dead giveaway; the writer is either ignorant or dishonest.

    • Christopher Gage

      That argument is rather cliche and outdated, Alex. Countless modern studies suggest otherwise.

      • Alex

        Wrong, you are confused. I am not claiming that a rise in the minimum wage is of net harm, though I think it is. I am saying that while it will increase the pay of those who stay in work it will eliminate some jobs. That is simply economic fact that virtually no economist would deny. And it should be part of the discussion. To claim otherwise is ludicrous, and not supported by ‘countless modern studies’.

  • Kitty MLB

    Well Labour were never the workers party, the idea was to keep people poor
    enough to still be dependant on the state- the iron fist of socialism- and to mistakenly
    think the state is helping you and be grateful- therefore vote for them
    It reminds me, when that wretched man Brown was wandering around before
    the last election, he asked a lady if she was working- she responded:
    ‘No never had a job, cannot afford one’.

    • Makroon

      Labour was founded as “the worker’s party”, but that was way back in the mists of time. It has long since been taken over by the petty bureaucrats and special interests, notably the corrupted trade unions and “the state sector”.
      Since New Labour, however, most of even this pretence has been dropped, and Labour has morphed into an opportunist/populist party with few principles, captured by a gang of disreputable hucksters and mainly appealing to the state dependent.

    • telemachus

      I draw attention again to Isabel’s powerful statement yesterday
      “One of the most powerful moments in a Gordon Brown speech was in his 2009 conference address when he listed Labour’s achievements. As part of the list, the Labour PM growled ‘the minimum wage’, and as he did, the conference hall went wild”

      • Nkaplan

        Room full of Socialists cheer ignorant economic policy – this is powerful how?

        • telemachus

          A bold statement by a right wing commentator on a right wing web site

          • Colonel Mustard

            Then why are you here you left wing muppet?

            Provocation, heckling, trolling, harassment. That is why you are here you malevolent little numpty.

            • JPE

              Your comment moved me. Was it the poetic wisdom or that it was a well thought out, persuasive argument. Difficult to say, it just moved me

          • Fergus Pickering

            Isabel right wing? Get a lfe. If she is right wing, what is the good James Delingpole? You are the mirror image of the viceroy’s gin who clims Cameron is a Socialist. No-one will listen to you (they may resppond but they won’t listen) while you peddle such tosh. Do you want to be like the viceroy’s gin? Do you know he is American? Brrrr!

    • Geronimo von Huxley

      I object to this simplistic view.
      What the non-existent New Year influx of Romanians and Bulgarians has taught us was that the business of manual car wash is booming, yet not a single whitey is to be seen on the forecourts.

      When this is apparently such a growth sector, why will the indigenous not partake? It must be due to a standard of living non-crisis.

  • Nkaplan

    It might make you the ‘workers’ party. It won’t do much for those who find themseleves priced out of the market as a result i.e. the ‘no-longer-able-to-be- Workers.’

    If you’re worried that prices have for too long been outstripping wage increases at the bottom end of the scale why not pay attention to some of the good work of the IEA on how to free up the supply side of the economy to help bring prices down?

    What is most disgraceful about the ‘Conservative’ party making such a move is that you (unlike poor ignorant Labour) know full well what the consequences will be for those with low skills, yet you press ahead purely for the sake of a few cheap headlines and some votes in an election you cannot win.

    • Alexsandr

      and in your comment about tax, don’t forget NI which bites at the low paid more than income tax.
      NI is just another and unfair tax. it should be rolled into income tax.

      • Nkaplan

        Agreed! And not just employees NI – it’s delusional to believe that employers NI does not cost employees money that they could otherwise be recieving.

        • Alexsandr

          well yes. Employers NI is simply a tax on employment

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