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Low Pay Commission backs 3% rise in minimum wage

26 February 2014

3:42 PM

26 February 2014

3:42 PM

So after all the to-ing and fro-ing over whether the minimum wage will get a big fat rise, the Low Pay Commission has recommended that the rate rise by 3 per cent to £6.50 an hour from October 2014. George Osborne had said that he wanted to ‘see an above-inflation increase in the minimum wage’, pointing out at the same time that ‘if, for example, the minimum wage had kept pace with inflation, it would be £7 by 2015/16’ (full quotes and audio here, if you need a reminder). If he did want it to rise to £7 by 2015/16, that would mean a much bigger rise from the LPC next time round, which is possible.

This is a reminder of a problem politicians have encountered in a completely different policy area over the last few weeks: they don’t have much power any more. The Low Pay Commission was created to ‘depoliticise’ the minimum wage, while the Environment Agency was supposed to take the politics out of environmental policy. Both are illustrations of what little esteem politicians hold themselves in that they cannot trust their own decisions and know the public cannot trust their decisions either.

But given the Chancellor wanted an above-inflation increase in the minimum wage and the LPC has recommended one, today’s announcement still means the Chancellor has got his way: this is the first real terms increase since 2008. And it’s no bad thing if some of the reporting of this announcement points out that Osborne suggested £7/hour: arguing for a higher minimum wage is hardly the most unpopular thing Osborne has had to do whilst Chancellor.

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Show comments
  • Daniel Maris

    OFFS – “They don’t have much power any more” – they are elected by us and could reclaim the power any time they wanted. Pathetic comment.

  • Mr Creosote

    Another example of politicians giving away other people’s money – a bit like their propensity for giving away “free” childcare, which is actually underwritten by private nurseries, many of which teeter on the brink of bankruptcy and can barely afford to pay the already low wages that take up 80% of turnover, thanks to historic over-regulation.

    • Daniel Maris

      Let me give you an example then…the profit of companies like Adidas and Nike comes from children and women being hit to make them work harder.

  • HookesLaw

    Politician’s do have power, but what they should not have is the power to ignore reality. That’s why independent commissions are a good thing. Brown should not have had the power to ignore economic reality.

  • Alexsandr

    its OK for the low pay commission. its not their money they are spending.
    If we want better wages for the lowest paid take them out of PAYE and NI (Incl employers NI)

  • David Lindsay.

    So What?

    “Given that 20% of the UK workforce is paid less than the living wage, the minimum wage does not of itself constitute a policy for tackling low pay, according to the Resolution Foundation’s commission on living standards.

    The commission supported greater pay transparency and recommended that large companies be required to report the proportion of their workforce paid below a low pay threshold, such as the living wage.

    Despite the impressive success of the living wage campaign, the idea of a living wage is problematic. Wages cannot take account of family size and the idea that a living wage can accommodate diverse family circumstances of workers is misleading.

    The notion of a decent wage better captures the idea that every worker deserves a decent reward for their efforts. It also chimes with the broader vision of decent work promoted by the International Labour Organisation among others. Decent work is about working conditions and security, as well as pay and is premised on recognition of human dignity.”

    • Fergus Pickering

      But a decent wage is a meaningless noise. What’s decent for you may not be decent for me. It goes along with fairness.