The government’s announcement of a National Living Wage in this week’s budget leaves the Labour party ‘floundering’ says the Conservative leader of Trafford Council.
Councillor Sean Anstee has heralded the move for reducing low paid workers’ reliance on tax credits while Labour MP for Manchester Central Lucy Powell dismissed the chancellor’s move as a ‘sleight of hand’ that would leave Manchester workers out of pocket.
The Tories’ shock move into traditional Labour territory caught commentators from all sides by surprise and has prompted scepticism of the Chancellor’s motives from the left.
But Ms Powell told MM: “This isn’t a living wage. It’s George Osborne’s attempt to rebrand the minimum wage. The Chancellor wants to use his 11th hour conversion as a smokescreen to cover his raid on tax credits for working families.”
Powell’s view is echoed by North West TUC Regional Secretary Lynn Collins, who questions the basis on which the increase is calculated.
She said: “Let’s not call it something it isn’t – the Living Wage rate, set by the Living Wage Foundation and supported by Boris Johnson in London, is much higher (£7.85 in the UK and £9.15 in London), so the Chancellor’s plans are somewhat behind that curve.”
Councillor Anstee backed his party’s new-found commitment to the low-paid as part of a package of reforms designed to boost productivity and incentivise employment.
He said: “It is a recognition that if you are to move from an economy where people are working, but their income is topped up by the state, then you need to shift the balance to higher wages and allow companies to afford that through lower business taxes.
“It is the right budget for Greater Manchester, with its focus on moving from a dependency on benefits and high taxes to a more aspirational society where people can keep more of the money they earn through lower taxes, as well as earning more through higher wages.”
Other measures announced in the budget include a public sector pay cap that will see increases capped at 1% for the next four years.
Ms Collins told MM: “The government can talk of a pay rise for Britain; they just don’t want to mention the workers they employ won’t share in this. A 1% rise in each of the next four years, on top of the same cap in each of the last five years, will leave millions of workers worse off.”
When asked what he would say to constituents in the public sector who will see pay rises capped, Cllr Anstee said: “You can only have strong and sustainable public services if we have a strong economy.
“If you look at all changes together, a strong economy should be able to manage inflation and interest rates, which when taken alongside the increases in the personal tax allowance will help to mitigate a lower increase.”
The National Living Wage will be introduced from April 2016 at a rate of £7.20 an hour for the over 25s, rising to £9 an hour by 2020.
