Wednesday, July 08, 2015

Time to raise the bar

When even David Cameron's own former chief strategist recognises the plight of the working poor and publicly calls for the introduction of a living wage, then you know the direction in which the Tories are currently headed is very wrong indeed.

Steve Hilton is absolutely right to be disgusted at the way that businesses are able to shift the burden of responsibility onto the government, paying their employees peanuts and expecting the government to step in and add what is effectively a subsidy in the form of benefits like tax credits.

But then it's in the government's power to put an end to this situation, by replacing the minimum wage with a more realistic living wage. Hilton claims there's significant cross-party support for the move, and surely it makes even more sense in light of the proposed cuts to tax credits, if poverty and inequality are to be kept at least partly in check and the Tories' rhetoric about supporting "hard-working families" isn't to prove to be mere hot air (not that they really care on either point).

George Osborne has already shown he's more than happy to pass the financial buck when it comes to the BBC - but then they're very definitely perceived as the enemy, and sadly it's doubtful he'd risk upsetting his allies in the business community by forcing them to cough up to cover the cost of a living wage.

(Thanks to Guilliana for the link.)


Would you believe it? No sooner had this post gone up than Osborne made the surprise announcement that he really would be introducing a living wage. However, if you look a little closer, all is not quite what it seems.

What Osborne calls a living wage (£7.20 an hour from next April) is not what the Living Wage Foundation calls a living wage (£7.85 an hour right now) - so it's really just an increase to the minimum wage, and applies only to those over the age of 25 (rather than 21, for the minimum wage). The living wage will rise to £9 an hour by 2020 - but it should already be £9.15 an hour in London, according to the Living Wage Foundation. Labour had pledged to introduce a living wage of £8 an hour, which puts the Tories' move into perspective - it's a sly way of (marginally) softening the blow of benefits and tax credits cuts.

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