How do the Conservatives continue to tackle the deficit, grow the economy, and persuade voters that they are – as the Home Secretary Theresa May put it in her measured keynote speech to the ConHome ‘Victory 2015’ conference yesterday – a party for all? There’s a chance that the answer to all three problems might be to make targeted increases to the minimum wage. Americans are starting to look at the potential stimulus effects of a similar increase in their minimum wage, and this may be the time for the Treasury to contemplate something radical.
Whilst the electorate continue to view Ed Miliband as out of his depth, one of the biggest problems faced by the Conservative party is in becoming a party seen as acting in the interests of everyone. Given the backdrop of a likely Labour victory, this is the moment for David Cameron and George Osborne to be bold. If Conservativism is anything, it is a movement which wants to see everyone prosper. Nothing would illustrate this motivation more clearly than a promise to raise the minimum wage as soon as possible.
Current perceptions of the Conservatives among the electorate are that they are not for ordinary people, scoring -24 per cent in polling on that question compared with +7 per cent for having a good team. The problem persists that whilst the Conservatives have implemented policies which are extremely popular, such as getting a grip on welfare spending and immigration levels, on the crucial issue of whether the voters feel that the Conservatives share their values there is a serious problem.
When in 1998 the National Minimum Wage Act was introduced, Conservatives were in opposition, but in time we have come to realise that it did not have the effects on employment levels that had been feared.
Now, with growing income inequality and a shrill political debate in which the opponents of necessary austerity paint the government as uncaring and ideologically motivated, the Conservatives must find a way to respond which shows that they are driven by a concern for the very poorest in society. Unlike alterations to the tax system, which can seem fiddly and distant from the lives of working people, promising to up the minimum wage when clear economic tests were met would gain traction in the minds of voters and have instant appeal: not only would it help struggling families, but it would give the Conservatives much-needed political cover for the Corporation tax reduction required to make the British economy more competitive.
Conservatives should learn from their opposition to the minimum wage, and be proud of London Mayor Boris Johnson’s support for an increase in the London living wage. As the Mayor says, it is not just about helping the poorest working families, it is also about giving them spending power to help drive economic consumption.
An increase in the minimum wage would send a clear message that the government is on the side of working people – it is the ultimate ‘blue collar’ measure which may restore faith in a party which all too often is portrayed by opponents as out of touch. It’s a policy guaranteed to wrongfoot Ed Balls and to recapture public trust. It is exactly the sort of policy which would show that the Conservatives believe in reforming the British economy so that it works for all.