Tackling low pay has been a central policy theme for Labour while in opposition, and it’s not hard to see why. While the economy is growing, wages aren’t rising in real-terms and people don’t feel better off. Ed Miliband knows this and has sought to focus his party’s strategy on the cost of living crisis as a result.
Today, one of Labour’s senior advisers on low pay may have given us a peek into what the party’s big conference announcement will be next week, by revealing an open letter calling on business leaders to get behind a faster rise in the minimum wage.
Former KPMG chief executive Alan Buckle’s letter calls on businesses to commit to supporting a faster rise over the coming months, so is he seeking big companies to back a headline Labour announcement by Ed Balls early next week?
The coalition has already backed Low Pay Commission proposals to increase the minimum wage to £6.50 an hour in October this year and business secretary Vince Cable has signalled his support for increasing the rate more quickly as the economy recovers. A Tory source said of the letter: “The Conservative Party could sign this letter – we agree with every word. While there is more to do, our long term economic plan is securing the recovery, meaning we have been able to afford the first above-inflation minimum wage rise since Labour’s great recession began.”
A Labour insider hinted that Buckle is acting alone on this one, but a formal comment is on the way.
Here's Buckle's letter to businesses:
I hope you don't mind me contacting you out of the blue. I'm getting in touch to see whether you would be interested in supporting an open letter from business leaders on the issue of low pay.In preparation for our two separate reports into how to tackle the problem of low pay earlier this year, Sir George Bain and I came to the conclusion that the time has come for measures to strengthen the minimum wage.All three political parties have expressed concerns about the level of the minimum wage over the past year, and we think the business community should also signal its commitment to the public to work towards a more productive, higher wage, higher skill economy.While care must be taken to retain flexibility in the face of economic shocks and avoid an adverse impact on employment, our analysis suggests that more can be done to ensure that the lowest paid in society benefit from the recovery. This is also an opportunity to improve public finances by reducing reliance on tax credits.The letter is calling for the minimum wage to rise faster in the years to come than it has in the recent past.I've copied the letter below, and would welcome your support - we are signing in a personal capacity.Yours,Alan Buckle
And here's the open letter:
The economy is growing. Business confidence is returning. And as the recovery takes hold, we must ensure that all employees are benefitting - and especially the lowest paid in society who find it hardest to make ends meet.The challenge for employers and business owners is to invest in growth that creates more well-paid jobs and opportunities to progress. To deliver this requires long term investment, certainty from government, and improvements in the skills we need to succeed.We also share concerns that the value of the minimum wage has fallen in recent years.Over the last 15 years, the National Minimum Wage has been successful in boosting pay at the bottom of society without leading to a loss of jobs. For businesses, it has created a level playing field, enabling employers to improve business performance and staff conditions without fear of being undercut by companies competing on lower wage rates.The Low Pay Commission was right to be cautious during the economic downturn. Now, as the economy recovers, we believe the minimum wage should rise faster than it has in the recent past. A stronger minimum wage will benefit businesses, improve public finances, and help tackle low pay.