David Cameron urges business leaders to offer pay rises in bid to thwart Labour

http://www.theguardian.com/politics/2015/feb/10/david-cameron-urges-business-pay-rises-thwart-labour

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David Cameron will tell Britain’s business leaders on Tuesday that the best way to protect themselves against “attacks” from Ed Miliband is to reward their workers with a pay rise.

In an intensification of his assault on Labour as the “anti-enterprise, anti-business” party, the prime minister will say that the best way to avoid charges that business leaders run a “conspiracy of runaway profits” is to respond generously to the upturn in the economy.

“Put simply, it’s time Britain had a pay rise,” Cameron will tell the British Chambers of Commerce conference as he reiterates comments he made in Washington last month.

The prime minister will issue his plea as Labour reaches out to business leaders by saying that any debate on the party’s central mission – to create a fairer society – is “academic” without business. Pledging to “strain every sinew” with business leaders to make their lives easier, the shadow business secretary Chuka Umunna will tell the conference: “I’ve always argued that if we want a fairer society we need a stronger economy – with more higher skilled, better paid, secure jobs. It is you – our businesses – that will create these jobs. Any debate on building a fairer society is academic unless there are businesses creating wealth.”

The British Chambers of Commerce conference will hear on Tuesday from the prime minister, Umunna and the shadow chancellor Ed Balls after a bruising week for Labour in its relations with business. The prime minister last week accused Labour of being “anti-enterprise, anti-business” after it attacked Stefano Pessina, the acting chief executive of the newly-merged Walgreens Boots Alliance, in the wake of his warning that Labour would have a catastrophic effect on business if it lived up to its rhetoric in government.

The prime minister will say that a gesture on pay, in the wake of low inflation and falling oil prices, will help to make the case for enterprise and undermine those who believe business is guilty of entrenching inequality. In an echo of Harold Macmillan’s famous declaration in 1957 that Britain has “never had it so good”, Cameron will say that British businesses have not experienced conditions “this good for a long time”.

Related: Labour extends lead over Conservatives despite attacks from business

Cameron, who regards Macmillan as something of a hero, will say: “Now that your costs are falling and it’s cheaper to do business – I’m confident that more businesses will pass on that good economic news to their workers, in rising pay cheques and higher earnings.

“That’s good for your employees, it’s good for you to have happier and more productive staff and frankly it’s good for anyone who wants to make the argument for business. Because for us business is not a conspiracy of runaway profits, depressed wages, inequality and unfairness. It is the best generator of growth, wealth, work and opportunity there is and there would be no better way to demonstrate that right now than to give Britain a pay rise.”

The prime minister also hopes to undermine one of Miliband’s central election themes on the cost of living crisis, after a lengthy period in which wage increases were outstripped by inflation, by pointing out that this trend has now been reversed.

Balls will suggest that the prime minister is being complacent as he says that working people are now worse off by £1,600 a year since 2010. The shadow chancellor will say: “This is set to be the first time since the 1920s when working people are worse off at the end of the parliament than they were at the beginning. So at a time when, even as our economy recovers, most people are not yet seeing the benefit in their wages and living standards, this is no time for complacency.”

But Balls will seek to reach out to business leaders by saying that a Labour government would lead EU reforms but would not flirt with a British exit from the EU.