Employment

Lord Soley Excerpts

Wednesday 15th January 2014 Lords Chamber

[Lord Freud]

My Lords, that is, of course, a reference to the Bank of England’s target of 7%. Unemployment has been falling pretty dramatically: it fell 0.3 percentage points to 7.4% in the latest three-month period. It is not the job of a government Minister to predict when unemployment will hit any particular rate; all I can say is that these trends are immensely encouraging. We should all look for them to continue to improve and I have no doubt that they will.

[Lord Soley (Lab)]

Bearing in mind his first Answer, can the Minister tell us what discussions there are in government about the relative economic merits of raising the minimum wage?

[Lord Freud]

There are two distinct factors. The higher the minimum wage, the more people will not go into the market. Estimates show that if we were to go with the recommended living wage, we would lose 300,000 jobs, particularly among youngsters. On the other side of the argument, there are benefits in terms of pay, particularly for the Government, because—as my noble friend mentioned—the tax credit system boosts the pay of low-paid people. That is the balance of the debate.