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Coffee House

George Osborne: Minimum wage rise must not cost jobs

9 January 2014

1:54 PM

9 January 2014

1:54 PM

Amid continuing confusion on what on earth the Tories do think about raising the minimum wage, George Osborne has had a go at clarifying things. He has just told Sky News:

‘Well look, I think everyone wants to see an increase in the minimum wage. I’d like to see an increase in the minimum wage, but it has to be done in a way that doesn’t cost people their jobs, because that would be self-defeating and we have the Low Pay Commission as a body that exists to make exactly that judgement, and what we’ve got to do as a country is get that balance right between supporting business, growing our economy and making sure it’s a recovery for all and that is what our long term plan is all about delivering.’

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Oddly, this is being written up as ‘Chancellor rules out big rise in minimum wage’ when this isn’t quite the case. He started out by saying ‘I’d like to see an increase in the minimum wage’ before saying that any rise couldn’t cost jobs, which even those on the left acknowledge (which is why Ed Miliband has made his support for a living wage about encouraging firms through tax breaks and social pressure to raise wages, rather than raising the minimum wage level to match the living wage across the board).

The key sentence in this short clip is it has to be done in a way that doesn’t cost people their jobs, which might be a hint at the plan reported by the Mail for tax breaks for firms to ease the blow of a higher hourly rate. This, incidentally, is not a million miles away from the tax breaks that Miliband has been mooting for a while for firms who pay the living wage, which might lead some in the party to despair that David Cameron and co are now outsourcing their policymaking to the Labour party (see Douglas Carswell’s post for us on the importance of a party having the courage of its convictions). The Chancellor clearly wants to signal that he’s not just going to hand out expensive goodies in the run-up to the election as he wants to show that fiscal discipline is the cornerstone of his approach to the economy. But he’s not ruling a rise out by any means.

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