With an economy recovering according to the Government, Chancellor George Osborne has said Britain “can now afford” to raise the minimum wage above inflation. It currently sits at £6.31 an hour for those over 21.
This comes amid claims from Labour that living standards among Britons are not improving in line with positive economic reports. Osborne has laid the blame for low standards of living on Labour’s doorstep and says his plans will help many financially.
Currently the minimum wage is paid to around 1.35 million people and, since the 2008 crisis, has been falling in real terms. With the inflation rate down to 2% currently, it seemed like the situation would begin to improve.
The Chancellor would like to see the rate rise to £7 an hour by 2015. This would make the rate as valuable as it was prior to the financial collapse. The Low Pay Commission, overseen by Business Secretary Vince Cable, are the ones who recommended this rate.
These plans from the Conservatives is likely to cause friction as the party were against the implementation of a national minimum wage back in 1999.
TUC General Secretary, Frances O’Grady has welcomed the plans but also said Osborne should be “more ambitious.”