Will Ed Miliband’s pledge on the Living Wage, made in today’s Independent on Sunday, work? Actually, that’s not really the most important question: the experience of the weeks following the autumn conference season is that you don’t actually need a workable pledge to be able to set the terms of debate.
The Labour leader’s plan is for private and public sector employers to receive a tax rebate – on average £445, but up to £1,000 – for 12 months for every employee whose pay is lifted to living wage level of £7.45 an hour. He says this will be paid directly through increased tax and national insurance receipts.
The big question now is how the Conservatives respond to this. Currently the response is a CCHQ attack from Grant Shapps, pointing out that Ed Balls once mentioned a scheme of this kind would incur higher borrowing. Shapps said this afternoon:
‘Even Labour’s own Shadow Chancellor Ed Balls says Ed Miliband’s latest unworkable policy would have a substantial extra cost to the Exchequer. Labour got us into a mess with too much borrowing and too much debt. And now they’re calling for yet more borrowing and more debt.’
These sorts of attacks and reminders of a party’s inconsistencies have their place. But as we have seen with the ‘energy price con’ that Miliband unveiled in conference, they aren’t enough to shoot the beast. The Conservatives have flown two kites in the past few months on wages: there was the Newsnight report that the party was looking at substantial increases in the minimum wage, and then the FT report that the party was considering substantial increases in the personal tax allowance. The party can choose to use either of those kites in its response: in fact, it should have used them before Miliband got in there. But it shouldn’t drag things out any longer than necessary. The last thing the party needs is to look as though all its policy announcements have been shaped by the leader of the Opposition.
So the question isn’t whether or not this Miliband pledge will work, but what on earth the Tories will do about it – and how fast.Tags: Ed Miliband, Labour, Living wage, UK politics