We should help companies pay a better wage to bring down our welfare bill

Today we’ve seen a procession of campaigners and politicians take to the news channels to tie themselves in knots about who should earn a minimum or living wage.

I’ll start by saying I applaud any effort to raise the pay and living standards of working people, but throughout the morning we’ve heard TV news presenters ask: “Well, if you’re saying people live in poverty on the minimum wage, shouldn’t everyone be on more?” – or words to that effect.

The answer should be an overwhelming “Yes”.

If people cannot get by on the National Minimum Wage, then that minimum wage is too low.

In a recent Class publication I argued this very point, because there are over 2.6 million people who earn the minimum wage or no more than 50p above it; for the first time ever, most people classed as living in poverty are in working families.

That’s not without a cost to the rest of us. Whoever is in power after the next election will wrestle with how to decrease the welfare bill, but when we hear politicians talk about how to do that, I end up shouting at the telly.

Where people earn the minimum wage, the taxpayer is often subsidising that income through tax credits. The living wage itself is a calculation based on workers receiving in work benefits as well as their wages.

Working people – many of whom are in the employ of large companies who make billions of pounds in profits every year – need their wages topped up by you and me.

It’s time we flipped that on its head. Let’s call the current situation what it is and treat it as such because what we have now is ‘corporate welfare dependency’. The ‘scroungers’ and ‘skivers’ get a lot attention, but the companies who force their workers into benefits dependency don’t get a look in.

So let’s legislate to ensure that companies making vast profits pay a wage that allows their workers to live without reliance on state benefits.

For those companies who genuinely would struggle – and I admit there will be some, especially small businesses – corporate tax credits should be available upon proof of their profits. That’s no more than we ask from working families at the moment.

Making work pay is good for workers, it’s good for the economy and it’s good for the taxpayer too.