Friday 28th October 2016                 Change text size:

Economy ‘can now afford’ a minimum wage rise, says Osborne

George Osborne 3

George Osborne has said that Britain was now in a position to accommodate an above-inflation rate of minimum wage, adding that he would like to see an increase.

The chancellor said that due to a recovering economy, Britain “can now afford” to raise the rate, which is currently set at £6.31 for anyone over the age of 21.

He said that Britain had “worked hard” to get to this stage in an interview with the BBC.

“We have worked hard to get to this point and we can start to enjoy the fruits of all that hard work”, he added.

Osborne said the coalition 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.”

While his comments have been largely welcomed, the chancellor does not have the power to make the decision to increase the national minimum wage. Labour criticised his pledge, saying that he was “flailing under pressure”.

Labour’s shadow chief secretary to the Treasury Chris Leslie said, “Ed Miliband and Ed Balls said last year that we need above inflation rises in the minimum wage in order to catch up the lost value over the last few years. And both the Tories and Lib Dems voted against Labour’s motion yesterday which called for action to make this happen.”

Osborne suggested that the minimum wage would have to be increased to £7 in order to reach similar levels to before the financial crisis in 2008.

A report from November claimed that one in five workers were being paid less than the living wage – an informal benchmark, higher than the minimum wage, designed to allow workers to live comfortably – which was followed by calls from investors for companies to pay their workers the living wage.

The living wage is currently set at £7.65, or £8.80 inside London.

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