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What the minimum wage debate tells us about the Tory Right

13 January 2014

The Conservative debate about the minimum wage continues today, with campaign group Renewal pushing for an increase, at least in line with inflation. Renewal is launching an interesting agenda today aimed at making capitalism work for groups who currently feel it fails them, such as the low paid and those living in deindustrialised towns in northern England.

The group’s work, ‘Renewing Capitalism’, is supported by Robert Halfon, the Tory MP who is always trying to work out ways of broadening the Conservative appeal. He says: ‘It was a big mistake for the Conservative party to oppose the minimum wage. We must right that wrong by at least increasing it in line with inflation. We should not make the same mistake. We must move on to ensure that everyone, in the north and the south, on low wages as well as high, can benefit from the proceeds of growth. If we say that the Conservative Party is on the side of hardworking people then we have to really mean it.’

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This isn’t particularly surprising coming from Robert Halfon, whose views on the labour market and Conservative appeal are well known. But what is interesting is the way the Conservative party is conducting itself on this debate about raising the wage. Broadcast producers are struggling to find anyone who will come on to argue that this is a bad idea. Last week Halfon found himself having a debate on Newsnight with another Tory MP, Mark Reckless, who also agreed that the minimum wage should go up and that the party made a mistake opposing it in the past. Meanwhile, other MPs normally associated with the Right of the party such as Stewart Jackson, have also publicly said that the party made a mistake and that they too are lobbying the Chancellor for a rise. This has caused some excitement from those watching the debate, who think that even the Right now see the case for a rise.

It is certainly true that some on the Right of the party now see the case. But this debate actually rather usefully highlights the shape of the Tory party and particularly its right wing. The Tory Right is not a mass that thinks the same on everything. It has a key divide when it comes to economic thinking between those Free Enterprise Group MPs, mostly elected in 2010, who worry that higher minimum wages would cost jobs and argue that there is a desperate need for dramatic scaling-back of employment regulation, and other MPs, often from earlier intakes and particularly from the 2005 intake, who are now more sanguine about wages and other issues. In June 2012, James illustrated the sharp distinction between these two groups, writing:

‘They are a movement, not a faction, so it is impossible to assign firm membership. But it is safe to say that all of them are in the ‘Free Enterprise’ group of 39 Tory MPs, convened by Truss. A few years ago, ‘Free Enterprise Conservative’ might have sounded like a tautology. But when these MPs arrived in Westminster, they were aghast at the intellectual flabbiness they found. They worried that the party had stopped arguing from first principles. Their aim is to ensure that the case for the market and a smaller state is not lost by default. The group’s members have been prepared to argue for things that many Tories think but fear to discuss: freezing the minimum wage, abolishing the Low Pay Commission.’

Earlier that month, the FEG proposed exempting small businesses with up to three employees from employment regulation including maternity and paternity leave and the minimum wage. At the time, it looked as though they and those who feel anxious about the effects of a higher minimum were winning the debate. But their colleagues who worry more about focus groups and political messages now seem to be in the ascendancy, while those who might be campaigning internally for exemptions and freezes are staying very quiet indeed, as you’d expect when something appears to have the Chancellor’s backing.

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  • andagain

    Personally, I would want to liberalise the labour market. Then again, I want to liberalise the planning system, too.

    If the Tories were consistantly in favour of economic liberty, people might believe they thought it was a good thing, rather than an excuse to benefit themselves and their friends.

  • HookesLaw

    What you should really say is ‘The group’s members have been prepared to argue for things that many Tories think but – sensibly realise would be political suicide’

    • southerner

      Sadly the many Tories you mention arguing for genuinely conservative policies do not include Cameron and all the other lefties at the top of the non-conservative party.

      • HookesLaw

        Your suggestion does not hold water. The facts speak otherwise. As I point out elsewhere, NI for employers has gone down and it cancelled a propose labour increase and tax allowances have gone up. Corporation tax has been cut.
        It has embarked on welfare reform and the only thanks it gets is for the media to misrepresent them (eg the misnamed ‘bedroom tax’). its pushing to end benefits for under 25’s.

        Yet despite the orchestrated opposition from the real left you spout your miserable complaints. You seek to invent a tory party that never existed. The present tory party is the same as its always been. Broadly right of centre.

        And in any event the govt is not operating from a position where political and financial largesse is possible. it is faced with the weight of its horrible economic inheritance. And the tories are part of a coalition.

        • southerner

          Hook you can cherry pick all you like. Any true conservative knows this is a left of centre shower.

          To your Corporation tax cut I call you with Cameron’s pledge to fight to keep us in Europe. And I raise you gay marriage.

          And ah yes – the coalition fig leaf. If only those Lib Dems weren’t about we’d have a real conservative government. Hilarious. Cameron is terrified of a majority. He’d have to reveal that his agenda this term is what he wanted anyway before heading off to a nice job in Europe.

          “You seek to invent a tory party that never existed.” Exactement my friend. Exactement. That is why this country has been destroyed piece by piece over the last 40 years.

  • Smithersjones2013

    Indeed its cheap politicking by a party who knows its heading for another almighty kick-in over the next two years (hence the complete meltdown over the EU in recent days)..

    Basically all this will do is punish small business who have less funds to play with whilst big business will use it to avoid more tax. Its the same old corporatist Tory Party.

    As an alternative how about a graduated minimum wage based on turnover and profit. The bigger the turnover and profit the higher the minimum wage? That would push the wages of those in McDonald’s and KFC up!

    • HookesLaw

      The minimum wage is a legitimate topic for discussion. It exists and needs to be discussed.

      How is it that only big businesses can use it to avoid tax?

      • Smithersjones2013

        Of course its legitimate.

        But the Tories don’t start talking about such concessions until they realise they are in electoral trouble for the upcoming elections (particularly as they are now in meltdown over Europe), After all that was said in the last manifesto was that they would “keep it”. That hardly sounds like they had enthusiastically embraced it. It’s desperation!

        Big business has the wherewithal to maximise their financial position,.smaller businesses lack such capacity by degree.

        • HookesLaw

          You still do not explain any link between a higher wage and avoiding tax between big and small businesses.

          In the last budget it was announced that up to 450,000 small businesses will no longer pay national insurance contributions from next year ie the financial year about to start. Apparently thats a third of all employers. The govt have been targetting a lot of help to small businesses.

          The trouble is you lot howl at the moon but forget what is happening in the real world. All you want is to spout useless slogans and in the process hand over the govt to socialists.

          • Smithersjones2013

            Keep telling yourself that Hooky as you snarl and spit and splutter your way to defeat.

  • AnotherDave

    This isn’t a debate about the merits of the minimum wage.

    The Conservatives are just desperate, and attempting to buy votes.

    If they’d cut government spending, they’d be offering income tax cuts. But they haven’t, so they can’t.

    • HookesLaw

      The govt are cutting govt spending. Large numbers of public jobs have been made redundant. The NHS spending is going up in line with inflation but this is far less than health inflation and the NHS is going through a 20 billion saving plan. There are further plans to cut spending post 2015.

      We have a big deficit – Brown ran deficits when we had growth. I think that makes it difficult to offer more tax cuts – and of course we have already had cuts in allowances. So you are wrong on all counts.

      Throughout all this we are getting endless complaints about cuts. You may have noticed the tories behind in the polls. The tories are doing the right thing and doing it sensibly – yet the hysterics simply howl and complain and act to see a return of a labour govt. How thick is that?

      • AnotherDave

        The gov’t are moving money from one department budget to another.

        Total spending is not reducing.

        • HookesLaw

          There is such a thing as inflation. If there are not cuts why do we get the complaints?
          And if you want another example of cuts and the political consequences here is this

          ‘The controversial reductions, which include 14 fire engines and 552 firefighting jobs as well as the stations, have sparked an intense debate over their impact on response times and safety.’

          Barristers were protesting only the other day about cuts to legal aid.
          Back in December the IFS were saying ‘there was little left to squeeze’

          The plain fact is you are wrong and then base all your absurdities on that illusion.

          • Smithersjones2013

            There is such a thing as inflation

            Yes indeed something that the Government/ B of E has singularly failed to get back on target.even though the compound effect of such excessive inflation means the cost of living is well above what it should have been under government plans…

            And please don’t insult people’s intelligence with your wilfully ignorant use of Osborne rather ridiculous disposable income line


            However, Mr Nickell highlighted that the Government’s measure was not divided per capita. “Total disposable income can go up because each person has more income, or because each person has the same or even less disposable income but there are more people,” he said.

            • HookesLaw

              There is such a thing as inflation which affect govt spending. There is no cost of living crisis, disposable incomes have gone up. And from this April there will be another big increase in the tax allowance.

              There have been and are continuing to be spending cuts which are giving the govt political grief, but need to be carried out. Sadly you are too dim to see you need to support the govt not attack them.

              • Smithersjones2013

                In 2009 Public Spending was 633.81 billion (UK Public

                If you put that through an inflation Calculator that comes out as 719.75 billion when inflated to 2014 rates (according to this is

                What is the governments scheduled spending for 2014 (according to

                £718.80 billion.

                So in three and a half years the government have actually cut spending by just £950 million pounds pro rata. Whoopsy Doo! That’s not even a rounding error in Osborne’s budget

                And I’m fine with Tories telling everyone there is no standard of living crisis until the cows come home. In fact do it twice on the days when they receive their energy bills, pay their rail season tickets and check bills to see how much VAT they are paying. I’m sure they will appreciate Tories for exactly what they are for doing so!

                You can bleat as much as you like about disposable income but people know how much they’ve had to tighten their belts and they are not loosening them yet.

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