Would the minimum wage be safe in Tory hands?

By Mike Ion

Ten years ago, a legally binding minimum rate of pay was introduced in Britain for the first time. Back in 1999, all adults had to be paid at least £3.60 an hour and workers under the age of 22 were entitled to get no less than £3 an hour. The change benefited about two million people – more than half of them in the service sector – and was a noble attempt to end the disgrace of what supporters of the move called the culture of “poverty pay”. Introduced by Labour and supported by the Liberal Democrats, the bill was opposed by the Conservatives who maintained that it would add to business costs and lead to job losses. When he was the Tory PPC for Stafford (in 1996-97) the young David Cameron told a local paper (the Chronicle) that:

Labour’s plans for minimum wages, the Social Chapter and large increases in spending and taxes would send unemployment straight back up. When David Cameron became leader in 2005, he told the Observer’s Andrew Rawnsley that:

I think the minimum wage has been a success, yes. It turned out much better than many people expected, including the CBI.

Another Cameron “flip-flop” on policy? Not really. Cameron would never attempt scrap the minimum wage – he knows all too well that such a move would be impossible. However calling the minimum wage a “success” does not mean the Tories wouldn’t make changes if they could get away with it. This week a small but significant group of Tory MPs gave their backing to Christopher Chope’s 10-minute rule bill that would allow for individuals and, de facto, employers, to opt out of the minimum wage. According to Chope, giving people the freedom to opt out of the minimum wage would help not only those who are out of work but those in the hard-pressed businesses such as retail and hospitality. In other words, if some people (probably economic migrants) are prepared to work for less then we should allow them to do so.

Such a move would clearly be open to abuse by unscrupulous employers and would no doubt result in companies cutting wages to below the national minimum. It would hardly be voluntary when the choice would be between taking a wage cut and getting the sack to be replaced by someone who will accept lower pay. An opt-out from the minimum wage would end up driving wages down and would probably worsen the current tension between foreign workers and British workers.

I accept that Chope’s bill will fail, but I also think it provides an indication of the future direction of travel if the Tories were to gain office. The minimum wage wouldn’t be scrapped under a Cameron-led government, it would be allowed to wither on the vine via a series of small, insignificant and probably below inflation rises.

Is this what the Tories mean by “progressive” Conservatism?

Mike Ion also blogs at mike-ion.blogspot.com.