Skills minister Matthew Hancock says centre right are best placed to tackle low pay and need to be seen to be doing so
Conservative minister Matthew Hancock says the minimum wage gives people currently on benefits an incentive to find work. Photograph: Christopher Furlong/Getty
An influential Conservative minister, Matthew Hancock, has said the Tories should "not only support the minimum wage, but strengthen it" and that he was interested in ideas such as councils being given powers to help enforce the measure.
There has been a recent pick-up in penalties but some councils, such as Newham in east London, have been pressing to be given formal powers to enforce the minimum wage, just as they can enforce health and safety standards on small firms.
Hancock, the skills minister and a former aide to George Osborne, said his party needed to be seen to be tackling the causes not just of excessively high pay, but also unjustified low pay. Speaking at a Resolution Foundation meeting in London, he said: "Not only are the centre right best placed to tackle low pay, but we need to shout it from the rooftops."
He said it was an essential supply-side reform since it helped people currently on benefit into work by giving them an incentive to work. "The standard argument against the minimum wage is that a minimum wage would price people out of jobs. But the academic analysis doesn't back it up. The analysis of the impact of minimum wages is one of the most studied areas of economics," he said.
He pointed to two recent studies which found that "the minimum wage has little or no discernible effect on the employment prospects of low-wage workers".
But he said any policy on the minimum wage had to be seen alongside measures to boost skills and make the tax system more attractive for people in work.
The current main adult minimum wage (for workers aged 21 and over) rose last autumn by 11p to £6.19 an hour. The rate for 18-20 year olds will remain at £4.98 an hour. The rate for apprentices is £2.65.
Hancock also pointed to the successive increases in tax-free personal allowances, saying they had cut tax paid by minimum wage workers by 75%.
Other speakers at the Resolution Foundation claimed that raising personal allowances was extremely expensive and more could be achieved by targeted changes to tax credits.
Guardian
