What an odd coincidence that on the eve of what’s being billed as a major economic speech by Ed Miliband, George Osborne sticks up his periscope and makes a big fat announcement on the minimum wage. The Chancellor and his colleagues have been mulling this increase for months, and have been making confusing but supportive noises over the past few weeks, and this evening would have seemed an odd time for the Chancellor to give an interview to the BBC on the subject if Osborne weren’t famed for being such an enthusiastic strategist. He told Nick Robinson that Britain could afford an above-inflation increase in the minimum wage:
‘The exact figure has to be set by the Low Pay Commission which talks to business, talks to other bodies in our economy, but if, for example, the minimum wage had kept pace with inflation, it would be £7 by 2015-16 – it’s £6.31 at the moment – so that’s an increase. I think we can see an above-inflation increase in the minimum wage, do it in a way that actually supports our economy precisely because the economy is recovering and many, many jobs are being created.’
The reason for the timing is simple: Osborne wants to rain on Miliband’s parade by making an eye-catching announcement that underlines that Labour, as the Opposition, is powerless, while the Tories in government are powering on and making decisions. He will also have noted that Labour’s minimum wage debate in the Commons yesterday, which had caused a little consternation in the party about messaging, was a rather awkward flop (although that hasn’t stopped some MPs trying to say ‘oooh, you didn’t back our non-binding opposition day debate motion!’), and so he can insert his announcement after that flop, and hopefully make tomorrow’s Miliband speech a flop too.
But it’s not just the timing. It’s also the language that the Chancellor used. He said ‘we’ve worked hard to get to this point’, underlining the contrast that he wants to draw between the Coalition’s ‘long-term economic plan’ and Labour’s policy. He wants to undermine Miliband’s credibility once more, just before the chap has even stood up to deliver his speech. And he wants to undermine Labour’s cost of living attack by making a gesture that suggests the Tories are interested in helping families struggling with rising prices (even if he can’t help them with their gym membership).
Update, 18:30: Iain Duncan Smith, not always an ally of Osborne’s (to put it mildly), has welcomed the move. He says:
‘I welcome this bold move by the chancellor. It shows that at the heart of all our reforms this government is concerned to improve the quality of life for the poorest in society. The commitment to a higher national minimum wage is all part of ensuring that the economic recovery delivers for people who want to work hard and play by the rules.’