This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/society/2014/jan/09/minimum-wage-increase-above-inflation-george-osborne-cautions-jobs

The article has changed 3 times. There is an RSS feed of changes available.

Version 0 Version 1
Minimum wage should rise but not at the cost of jobs, says George Osborne Minimum wage should rise but not at the cost of jobs, says George Osborne
(about 1 hour later)
The chancellor has cautioned against "self-defeating" increases in the level of the national minimum wage, amid reports that some cabinet ministers are pressing for an above-inflation rise of 50p or more. George Osborne has struck a cautious note about increasing the minimum wage, warning it would be "self-defeating" if it cost people their jobs.
George Osborne said he wanted to see low-paid workers' earnings rising, but not at the cost of jobs. In his first intervention in the recent debate, the chancellor said he would like to see an increase in the minimum wage but dampened speculation that there could be a big inflation-busting rise from the current rate of £6.31 per hour.
Reports have suggested that ministers including the business secretary, Vince Cable, and the work and pensions secretary, Iain Duncan Smith, are pushing for an above-inflation hike in the £6.31-an-hour minimum wage, even if it means overruling the recommendations of the low pay commission when it reports next month. There have been reports that the Conservatives are considering a rise of more than 50p an hour in a move that would steal some of Labour's thunder on the issue, after Ed Miliband promised his party would introduce an increase if it won the next election.
Asked if a big rise was on the cards, Osborne said: "I think everyone wants to see an increase in the minimum wage. But it has to be done in a way that doesn't cost jobs, because that would be self-defeating. On Wednesday Sajid Javid, a Tory Treasury minister, said there was a "strong case" for an increase, and sources said Iain Duncan Smith, the work and pensions secretary, was among the senior cabinet figures pressing for a big rise.
"We have a low pay commission as a body that exists to make exactly that judgment. Conservative support for the policy has been driven by Matthew Hancock, a former chief of staff to Osborne and business minister, who has lined up with Jo Johnson, the Downing Street policy board head, and Oliver Letwin, the Cabinet Office minister and prime ministerial aide, to make a break from the Tories' original opposition to the minimum wage in the late 1990s.
"What we have got to do as a country is get the balance right between supporting business, growing our economy and making sure it is a recovery for all, and that is what our long-term plan is all about delivering." In response, Liberal Democrat sources have accused the their coalition partners of once again attempting to steal their policies, after Vince Cable, the business secretary, urged the low pay commission last September to move towards restoring real-terms rises in the minimum wage.
His comments came during a visit on Thursday to Ridgeway Garages in Enfield, north London, to highlight the forthcoming introduction of the new employment allowance, which will allow businesses to claim £2,000 a year off their employers' national insurance contributions. However, Osborne appeared to play down the idea of a big rise on Thursday, saying it should not be allowed to jeopardise the economic recovery.
The chancellor said the move, announced in last year's budget and due to take effect on 6 April, was effectively cashback on the jobs tax for every business in the UK. "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," he said during a visit to a garage in north London.
"It takes £2,000 off the jobs tax of a business like this and it means a company can hire more people, invest more, do all the things we need to see as part of our long-term plan for Britain to increase jobs and bring economic prosperity to this country," he said. "We have the low pay commission as a body that exists to make exactly that judgment 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."
After meeting mechanics at the garage, Osborne said that 450,000 small firms across the UK will no longer pay employers' NICs at all, thanks to the new employment allowance. Managers at the garage were aiming to put the money towards taking on an extra member of staff and installing tyre-changing equipment, he said. He was visiting Enfield to highlight a policy coming into effect in April that will allow businesses to claim £2,000 a year off their national insurance contributions.
Ryan Shorthouse, director of the Tory modernising thinktank Bright Blue, told the Guardian last month that Downing Street should focus on a "balanced, moderate message", including an increase in the minimum wage, rather than trying to "outdo Ukip" on immigration.
Our editors' picks for the day's top news and commentary delivered to your inbox each morning.Our editors' picks for the day's top news and commentary delivered to your inbox each morning.