National Living Wage

Lord Forsyth of Drumlean Excerpts

Monday 17th January 2022 Lords Chamber

[Lord Callanan (Con)]

I know the noble Baroness feels passionately about this and, as I said in response to earlier questions, I think the whole House is united in wanting to see increases in the minimum wage and the living wage as much as possible. However, it benefits nobody if it drives people into unemployment and further poverty. We want to see increases in the national minimum wage, but we want to see them on a sustainable basis.

[Lord Forsyth of Drumlean (Con)]

My Lords, listening to these questions, is my noble friend satisfied that the Bank of England is correct in assuming that inflation is going to be a transient phenomenon? Was it not a mistake that it continued with its programme of QE even when the economy was growing rapidly? If people push for wage increases, that is how inflation takes off, and it will be very difficult for the Bank of England to control it.

[Lord Callanan (Con)]

My noble friend also makes an important point. Inflation has a pernicious impact on the economy and, of course, it impacts most on the lowest paid. I am sure the Bank of England wants to take all these factors into account. I will not stand here and give it advice on this matter, but it is important that we take account of inflation in calculating the minimum wage, and that is exactly what the Low Pay Commission does.