George Osborne has indicated he wants to increase the minimum wage
17 January 2014
Chancellor George Osborne has said he wants to see an above-inflation increase in the National Minimum Wage (NMW).
Fri, 17 Jan 2014Chancellor George Osborne has said he wants to see an above-inflation increase in the National Minimum Wage (NMW).
Osborne said in a BBC interview with political editor Nick Robinson yesterday that the "economy can now afford" to raise the rate, currently set at £6.31 an hour for people over the age of 21, adding it would have to increase to £7 an hour by 2015 for its value to return to where it was before the economic downturn.
However, representatives of employers have questioned whether the economic recovery has reached a point where an NMW increase is feasible.
Alexander Jackman, head of policy at the Forum of Private Business, says: “The Forum of Private Business has been opposed to increases in the NMW until the UK has seen a sustained recovery and businesses are in a position to afford it. We have not yet reached that point. With many companies not yet profitable enough to service their own debts, the last thing we need is a huge, inflation-busting rise in the NMW.”
John Cridland, director general of the Confederation of British Industry, adds: “Recommending the rate of the NMW must be a matter for the Low Pay Commission, as the Chancellor recognises. An unaffordable rise would end up costing jobs and hit smaller businesses in particular. Any increase in wages must reflect improved productivity.”
The announcement was made before today’s speech from Ed Miliband. Miliband stressed the importance of the cost-of-living crisis and listed strengthening the NMW as one of five points for tackling this (including an energy price freeze, tackling the payday lenders, better childcare and abolishing the bedroom tax).
“Their [the Conservatives] economic policy is not the solution to the cost-of-living crisis. It’s part of the problem. They believe in a race to the bottom. Low wages, low skills. Not the race to the top Britain needs to tackle the cost-of-living crisis.
“Part of the reason as a country we rely too much on low-paid, insecure work is that the small- and medium-sized firms that could create the good, high paying jobs of the future can’t get the finance they need,” says Miliband.
Osborne said in a BBC interview with political editor Nick Robinson yesterday that the "economy can now afford" to raise the rate, currently set at £6.31 an hour for people over the age of 21, adding it would have to increase to £7 an hour by 2015 for its value to return to where it was before the economic downturn.
However, representatives of employers have questioned whether the economic recovery has reached a point where an NMW increase is feasible.
Alexander Jackman, head of policy at the Forum of Private Business, says: “The Forum of Private Business has been opposed to increases in the NMW until the UK has seen a sustained recovery and businesses are in a position to afford it. We have not yet reached that point. With many companies not yet profitable enough to service their own debts, the last thing we need is a huge, inflation-busting rise in the NMW.”
John Cridland, director general of the Confederation of British Industry, adds: “Recommending the rate of the NMW must be a matter for the Low Pay Commission, as the Chancellor recognises. An unaffordable rise would end up costing jobs and hit smaller businesses in particular. Any increase in wages must reflect improved productivity.”
The announcement was made before today’s speech from Ed Miliband. Miliband stressed the importance of the cost-of-living crisis and listed strengthening the NMW as one of five points for tackling this (including an energy price freeze, tackling the payday lenders, better childcare and abolishing the bedroom tax).
“Their [the Conservatives] economic policy is not the solution to the cost-of-living crisis. It’s part of the problem. They believe in a race to the bottom. Low wages, low skills. Not the race to the top Britain needs to tackle the cost-of-living crisis.
“Part of the reason as a country we rely too much on low-paid, insecure work is that the small- and medium-sized firms that could create the good, high paying jobs of the future can’t get the finance they need,” says Miliband.
