Labour can’t afford to get outflanked by Osborne on the Minimum Wage

It seems that George Osborne has had a rather sudden damascene conversion to a higher Minimum Wage. His announcement this evening that the government could (but not would) back a Minimum Wage in the region of £7 per hour should be welcomed. But it seems rather odd that Osborne has allowed the Minimum Wage to depreciate in value for three and a half years before musing on the need for it to be higher.

Even stranger is that Osborne voted against a Labour motion to strengthen the Minimum Wage only yesterday – I’m sure that his decision to vote against yesterday but speak vaguely in favour today has nothing – nothing – to do with Ed Miliband’s economy speech tomorrow morning…

Although it’s pleasing that Osborne’s argument – that a higher minimum wage could be revenue neutral thanks to increased tax and spending from low earners – is one that those on the Left have been making for years. It’ll be harder for the Tories to refute such arguments when they surface again in future.

Labour must now be careful not to get outflanked on the Minimum Wage. Support for those at the thin end of the economic wedge has always been a Labour touchstone, yet whilst it’s pleasing to see Osborne playing on Labour turf, Miliband can’t afford to be outflanked on low-pay if his cost-of-living mantra is going to stay in play through to 2015.

Fortunately, both Miliband and Balls have repeatedly called for a higher minimum wage to make up for the real-terms decline it’s undergone in recent years – so if they’re quick and smart they can point out that Osborne is only following Labour, not leading. There’s not only that commons vote yesterday, but a call to raise the Minimum Wage featured in both of their conference speeches.

Yet now isn’t a time to be resting on our low-pay laurels. Miliband will inevitably be asked tomorrow after his economy speech whether he supports Osborne in wanting a higher minimum wage. Miliband should take the opportunity to seize the initiative and go one further – pledge to have the Living Wage become the Minimum Wage over the next parliament, and challenge Osborne to back him.

Otherwise what Osborne – and Miliband – are pledging to do is swap one form of poverty wages for a higher level of poverty wages. Britain can do better than that…