Archive for January, 2014

Conservative Chancellor Wants Above-Inflation Minimum Wage Rise

Friday, January 17th, 2014

George Osborne MPChancellor George Osborne has said he wants to see an above-inflation increase in the minimum wage.

He has said the “economy can now afford” to raise the rate, currently set at £6.31 an hour for people over the age of 21.  The call comes after Labour claims that the economic upturn has not translated into improved living standards.

But Mr Osborne said it was Labour’s fault that they had fallen and he was aiming to make people better off.  The value of the minimum wage, paid to an estimated 1.35 million people, has fallen in real terms since the financial crisis of 2008.  The current rate of inflation is 2%.

Conservative Mr Osborne said it would have to increase to £7 an hour by 2015 for its value to return to where it was before the economic downturn struck.  The rate is recommended by the Low Pay Commission, which is overseen by Liberal Democrat Business Secretary Vince Cable.

He said the coalition, since coming to power in 2010, had “rescued the country from the brink of disaster and got us into a position where we can now see the minimum wage going up for people and, more broadly.  I want living standards to go up for the whole country as we fix the economy.”

Mr Osborne said, “Britain is poorer because of what happened to it in the great recession.  People in the country are poorer because of what happened in the great recession.

“I want to make sure we are all in it together, as part of the recovery, which is why I want to see above-inflation increases in the minimum wage, precisely because the British economy can now afford that.  This government, and I as chancellor, are on the side of hardworking people.  I want a welfare system that supports work, that’s fair to those who use it and those who pay for it.”

He added that the government was planning another “big increase” in the amount of money people can earn before paying income tax and defended his plans to remove a further £12bn from the welfare budget.

The minimum wage rate for workers aged 18 to 20 is £5.03 an hour, while it is £3.72 for under-18s.