This is what you get with a Conservative majority: A national living wage

 
Matthew Hancock
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The Conservatives say Britain needs a pay rise (Source: Getty)

Why do we care about the economic recovery? Sometimes economists seem to forget, that we care about recovery not for some statistics on a chart, but because recovery creates more jobs giving people the dignity of work, and pay rises for those in work. In short, the purpose of economic recovery is to make people better off.

Ultimately, then, it is our task in government to ensure that the recovery is secure, and then to ensure that it benefits all parts of society.

This means vigorously supporting job creation. And it also means making sure those on the lowest pay benefit too.

Over the last five years we have seen the equivalent of 1000 new jobs created every day. We want to see this direction continue, and have a goal of creating two million more jobs by 2020.

But we have got to make sure those jobs pay well too. This is why the new national living wage is so important, giving a £5000 pay rise to someone working full time on the minimum wage.

Some are surprised that it is a Conservative government that have introduced the national living wage. I think it is the opposite.

First, the pay rise can only be afforded because it is being brought in alongside a relentless focus on improving productivity and on supporting the environment for enterprise. To keep up the supply of more jobs and offset the one per cent of gross profit the national living wage is expected to cost employers, we have cut corporation tax and employers national insurance contributions.

Second, to increase the demand for jobs, we are combining the new national living wage with radical welfare reform; we are making sure work always pays, as well as sharpening incentives to work.

So the national living wage is part of a package, aimed at supporting the creation of jobs, and incentivising more people into those jobs.

All of this has a purpose. To switch Britain from a high tax, high welfare, low wage economy, to a higher wage, lower tax, lower welfare society. And in so doing to spread recovery to all parts of society, and help Britain become the most prosperous major nation on earth within a generation. That is a realistic goal and a noble cause.

That's what you get from a majority Conservative government.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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