Living Wage

Lord Forsyth of Drumlean Excerpts

Monday 9th June 2014 Lords Chamber

[Viscount Younger of Leckie]

I certainly agree with the noble Lord that we are encouraging more employers to be productive. Much work has been done to that effect but I point out to him that the minimum wage is now increasing faster than earnings. The rise of 3% in the adult rate will mean that low-paid workers will enjoy the biggest cash increase in their pay packets since 2008. A rigid formula does not allow for changing economic circumstances, for example imposing a target set by politicians. That would result in job losses if it is set too high and lower earnings if it is set too low.

[Lord Forsyth of Drumlean (Con)]

My Lords, does my noble friend not agree that the most important thing is take-home pay and that therefore the Government’s efforts to reduce the burden of tax on the low aid are what matter? Does he not think that an Opposition who refuse to deny that they would increase national insurance if they were in government have a cheek talking about the effect on living standards of taxation?

[Viscount Younger of Leckie]

My noble friend makes some good points. The only real way of achieving sustainable increases in living standards is through focusing on economic growth, employment and reducing taxes for the low paid, as he said. Christine Lagarde, the managing director of the IMF, said recently that the IMF had,

“underestimated the growth of the UK economy”.

In a significant turnaround, the fund’s latest assessment found that the UK economy had rebounded strongly.