Living Wage
Debate between Kwasi Kwarteng and Anne Main(11 years, 10 months ago)
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Mrs Anne Main (in the Chair)
Order. The hon. Gentleman is not giving way. I would appreciate it if he were not barracked.
Kwasi Kwarteng
The reason wages have gone up over the past 50 years is economic growth; that is what has driven the rise in real wages, not laws passed by Governments, the minimum wage or anything like that. The one way to secure economic growth is to create a situation in which businesses can thrive. I would like to see lower taxes and more people taken out of taxation—the Government have successfully done that—so that they can spend more of their own money. I would also like the burdens placed on employers through national insurance to be reduced. Such measures will be far more effective in driving up our workers’ standards of living than Westminster or Whitehall imposing a living wage right through the country.
I am pleased that my hon. Friend the Member for Christchurch mentioned that there was some regional variation between London and the rest of the country. In the debates about the minimum wage, it was seen as a national minimum wage that did not recognise any variation in the cost of living between London and rural Scotland.
Kwasi Kwarteng
I have said this about three times in my speech: everybody wants people to have higher wages—[Interruption.]
Kwasi Kwarteng
No one is arguing against higher wages. We are arguing about the most effective way of raising living standards and economic prosperity for the whole country. I am suggesting, as a matter of theory, history and experience, that the socialist approach of using Government diktat is not the most effective way of dealing with this issue.
We can argue about this specific issue. Parties in London are suggesting that we have a living wage, but that is something for companies and councils. I object to the idea that Whitehall and Westminster should set a national living wage that applies right through the country.
Let me finish where I started—with the theoretical debate. There is a big debate about whether a free market system will produce better outcomes than an essentially state-controlled system. All through the world, the most successful economies are free market systems.
Kwasi Kwarteng
In China, the state contributes only 20% of spending. In terms of state spending as a proportion of GDP, China is a far more private sector-driven economy than the UK or other western European countries.
Mrs Anne Main (in the Chair)
Order. May I ask the hon. Gentleman to bring his remarks to a close?
Kwasi Kwarteng
The notion that we can go back to socialism and that that will somehow increase living standards is false, but I fear that that is what this living wage proposal is about. It is simply trying to impose more regulation, more rules and more of a straitjacket on business, thereby inevitably impeding and impairing our ability to grow the economy and create genuine prosperity.