What his policy is on the national minimum wage.

What his policy is on the national minimum wage.

Our aim is to maximise the wages of the low paid without damaging their employment prospects. We fully support the work of the independent Low Pay Commission in framing the pay rate recommendations for 2014. I have also asked it to consider the conditions that would be needed for faster, above inflation, increases in the national minimum wage.

I warmly welcome the Chancellor’s announcement of his support for raising the national minimum wage, which would be of huge benefit to the lowest paid in Burton and Uttoxeter, and across the country. Does the Secretary of State accept that it would also place extra costs on business, particularly on small business? Will he consider what could be done to reduce business taxes and regulatory burdens to help those businesses pay for an increase in the minimum wage?

Yes, of course we are conscious of the extra cost that would fall on business. That is why the Low Pay Commission tries to make a balanced judgment between the impact on employment and the increase in earnings for workers. It must be left to make its judgments and its independence must be respected. On the tax implications, given that the Chancellor is now heavily involved in this proposal and supportive of it, I am sure that he will be helpful on that front as well.

Some 14 million people are on the minimum wage, most of whom work in retail, hospitality or cleaning. They earn just over £12,000 a year and are hard-working people. It is rightly the ambition of the coalition to make work pay more than benefit. Does my right hon. Friend imagine that anyone thinks that an above-inflation increase in the minimum wage would not pay for itself and should not be available to help those who are working hard?

My right hon. Friend reflects the thinking that framed the advice I gave to the Low Pay Commission. Indeed, such thinking is not merely attractive in that it gives an incentive for people to work and improve their earnings, but it has positive implications for public finances.

The Government would have us believe that they are now great supporters of the national minimum wage, yet we know that many sitting on the Government Benches today voted against it in 1997. If the national minimum wage is so important to the coalition, why have the Government allowed its value to fall by 5% since the election?

The real value of the minimum wage started to fall under my predecessors in the wake of the financial crisis, and on each occasion, I, like my Labour predecessor, have followed the advice of the Low Pay Commission. The levels that have been set reflect that independent advice.