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George Osborne cautious on 'self-defeating' minimum wage rises | George Osborne cautious on 'self-defeating' minimum wage rises |
(about 20 hours later) | |
Chancellor George Osborne has warned that "self-defeating" increases to the minimum wage could "cost jobs". | Chancellor George Osborne has warned that "self-defeating" increases to the minimum wage could "cost jobs". |
Cabinet ministers including Business Secretary Vince Cable and Work and Pensions Secretary Iain Duncan Smith are reportedly pressing for an above-inflation rise of 50p or more. | Cabinet ministers including Business Secretary Vince Cable and Work and Pensions Secretary Iain Duncan Smith are reportedly pressing for an above-inflation rise of 50p or more. |
Mr Osborne said he too wanted to see the £6.31 hourly minimum wage rise. | Mr Osborne said he too wanted to see the £6.31 hourly minimum wage rise. |
But he said it should be left to the Low Pay Commission to set the appropriate level. | But he said it should be left to the Low Pay Commission to set the appropriate level. |
His comments came during a visit to Enfield, north London, to highlight the forthcoming introduction of the new Employment Allowance, which will allow every business and charity to claim the first £2,000 a year back off their National Insurance bill. | His comments came during a visit to Enfield, north London, to highlight the forthcoming introduction of the new Employment Allowance, which will allow every business and charity to claim the first £2,000 a year back off their National Insurance bill. |
The chancellor said the move, announced in the 2013 Budget and due to take effect on 6 April, would mean companies could "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". | The chancellor said the move, announced in the 2013 Budget and due to take effect on 6 April, would mean companies could "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". |
'Self-defeating' | |
But Mr Osborne downplayed the prospect of the government over-ruling the Low Pay Commission if it fails to call for a "significant" rise to the minimum wage when it reports next month. | But Mr Osborne downplayed the prospect of the government over-ruling the Low Pay Commission if it fails to call for a "significant" rise to the minimum wage when it reports next month. |
Mr Osborne said: "I think everyone wants to see an increase in the minimum wage. I would like to see an increase in the minimum wage. | Mr Osborne said: "I think everyone wants to see an increase in the minimum wage. I would like 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. | "But it has to be done in a way that doesn't cost jobs, because that would be self-defeating. |
"We have a Low Pay Commission as a body that exists to make exactly that judgment. | "We have a Low Pay Commission as a body that exists to make exactly that judgment. |
"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." | "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." |
'Key balance' | |
Mr Cable said he would only back a substantial rise in the minimum wage if it did not damage jobs. | |
"This is why I asked the independent Low Pay Commission what economic conditions would be needed to allow for significant rises in the minimum wage without damage to employment," he said. | |
"The minimum wage strikes a key balance between protecting the low paid and making sure they can find work," he added | |
"But as the economy starts to recover, the benefits of growth must be shared fairly and equally by everyone." | |
Downing Street rejected the suggestion of any cabinet split over the minimum wage, saying that the government was not going to pre-judge the outcome of the Low Pay Commission's review of the minimum wage. | Downing Street rejected the suggestion of any cabinet split over the minimum wage, saying that the government was not going to pre-judge the outcome of the Low Pay Commission's review of the minimum wage. |