National Minimum Wage

Lord Campbell-Savours Excerpts

Thursday 6th November 2014 Lords Chamber

[Lord Newby]

My Lords, I completely agree with my noble friend; the increase in the tax threshold has made a major impact on living standards. That is why real household disposable income, which is the key figure looking at living standards, increased by some 2.2% in quarter 2 2014, and why the OBR forecast that earnings will rise faster than inflation from the second half of this year for every year to 2018.

[Lord Campbell-Savours (Lab)]

My Lords, when the Labour Government introduced the national minimum wage in 1997, we were told that unemployment would go up. In fact employment went up. Why does the Minister think that employment went up when we introduced the national minimum wage?

[Lord Newby]

My Lords, there are a number of reasons. One was that it was introduced at a time when the economy was growing, which made it easier for people to pay higher wages. That is why I am so pleased that the economy is growing so strongly now, which means that wages are rising again.