This talk about the minimum wage reflects the Tories’ growing optimism about the recovery

By Peter Hoskin
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Ahem. Remember when I said, about ten days ago, that it’s worth keeping an eye on the politics of the minimum wage? Well, your acuity will have been rewarded by yesterday’s edition of Newsnight. According to the programme’s political editor, Allegra Stratton, the Tory leadership are looking at ways to raise that minimum. One could be to offer tax breaks to companies that pay above the current level; another could be to lean on the body that sets the wage; another… oh, you’d be better off reading her blog-post for the full list.

If this happens, it would be something of a break from recent political history. Back in 2007, even Gordon Brown was eager to regionalise the minimum wage, so that it was lower in some areas than in others. That idea – as I’ve reported before – was subsequently championed by some within the Coalition, along with more radical options such as suspending the minimum wage for young people. Their concern was jobs; specifically whether the minimum wage dissuades companies from hiring. And it’s still a concern that some have now. As Stratton’s post notes, of the new developments, “this is meeting some resistance inside government amid fears it may alienate business leaders”.

But although it’s a break, it’s hardly a surprising one. The next election, we’re ceaselessly told, is going to be about the cost of living – and the Tory leadership need a response to the other parties’ collective push on both the minimum and the living wage. Besides, there’s an increasing number of Tories calling for the minimum wage to be strengthened, from David Skelton to Matt Hancock. The general atmosphere has changed, even if there are still pockets of nitrous opposition.

One of Stratton’s sources tells her that a minimum wage policy isn’t likely to come soon, but is rather “a contender for the Tories’ next manifesto” – which make sense. Not only will that maximise its electoral potential, but it’s probable that the economy will be in a better state then, which will nullify some of those concerns about employment. If anything, the fact it’s coming up now probably reflects one thing above anything else: Downing Street’s growing optimism about the recovery. Simply put, they’re moving out of a time when even the minimum seemed too much.