Last week the Chancellor said he supports an above-inflation increase in the minimum wage. I’m thrilled by this news - it’s something I have been campaigning for, both publicly before I became a minister and privately since.
When this Government came to power, it faced two inter-related challenges - first, rescuing our economy; and second, making work pay. Under Labour, many people found themselves trapped on benefits - they discovered they were little better off, or in some cases worse off, in work than out of work - and others were allowed to remain on out-of-work benefits for years. This was both unfair to those who were working and paying for the welfare system and to those trapped, or allowed to remain, on benefits - there's plenty of evidence that work is good for your health and wider wellbeing.
We've already done two important things to make work pay. We've raised the amount of money you can earn before you start paying income tax. This helps everyone in work, but particularly those on low pay - someone working full-time for the minimum wage is paying half the income tax under this Government that they were paying under Labour. And we've introduced a cap on the amount of benefits an out-of-work family can receive so that people who work hard don’t find themselves worse off than someone living next door to them who isn’t working.
But I’ve always thought we should also increase the minimum wage (whilst cutting the taxes that businesses pay when they employ someone so that any increase doesn’t lead to an increase in unemployment). I'm lucky - I have a job I love. I get up at half past five every morning looking forward to going to work. But many of the people I represent aren’t so lucky. They do something they don’t enjoy to put a roof over their families’ heads. If we want people on benefits to take jobs which, if we are honest, we wouldn’t want to do ourselves then we have to ensure that they get a fair reward for their effort.
Most of my constituents understand that tough decisions have to be taken to deal with the deficit, that although we are making progress we are not out of the woods yet. What they ask is that those decisions are fair - that everyone contributes, but those with the broadest shoulders contribute the most and that as the economy recovers everyone who works hard shares in that recovery. Last week’s news shows that the Government understands and shares that sentiment.
This column was first printed in The Croydon Advertiser on Friday 24th January 2014