MANCHESTER (BLOOMBERG) – Boris Johnson’s insistence that higher UK pay is worth the pain of supply chain turmoil is generating buzz among Conservative Party members he’s planning to raise the minimum wage in his keynote speech on Wednesday (Oct 6).
This week’s annual conference has seen Johnson’s top team, including Chancellor of the Exchequer Rishi Sunak and Foreign Secretary Liz Truss, addressing crowds with little new policy to announce.
That’s led senior business figures to expect the prime minister to have a few policy rabbits to pull out of his hat – and a minimum wage hike could be one.
The government has asked its commission on low pay to report its recommendations this month, and an obvious time to announce a change would be in Sunak’s budget announcement on Oct 27.
Still, an announcement this week would have the advantage of letting Johnson show he’s taking action as fears grow over a cost of living crisis in the United Kingdom.
Households are facing higher energy and food bills just at the time the government removes its pandemic-era emergency support.
People familiar with the matter said Johnson’s speech would be more focused on laying out his government’s vision, rather than specific policy announcements.
Johnson has repeatedly sought to play down a supply chain crisis that’s seen empty supermarket shelves and gas stations running dry, calling it a “turning point” in a post-Brexit transition away from a low wage, low skill economy.
That narrative, linking rising costs stemming from the disruption to a positive outcome in higher pay, would be bolstered by a rise in the minimum wage.
It would also put the Tories firmly in Labour Party’s territory, potentially upping the pressure on opposition leader Keir Starmer.
During his media round on Tuesday, Johnson hinted that it’s on his mind, telling Times Radio he will accept the pay commission’s recommendations.
The rate for workers aged 23 and over currently stands at 8.91 pounds (S$16.45) an hour, after a 2.2 per cent rise in April. But that was less than the 9.21 pounds projected by the panel, which Sunak blamed on the pandemic.
The commission says it is currently analysing its consultation on boosting the rate by 5.7 per cent to 9.42 pounds, its “central projection for next April’s rate.”
With Bank of England officials expecting inflation to climb above 4 per cent by the end of this year, any increase would have to be significant to avoid an outright squeeze on the lowest incomes.
Asked directly if Johnson would include it in his speech, Conservative Party chairman Oliver Dowden said it was the Tories who introduced the current version of the minimum wage in 2016, and also “massively increased” it.
“I’m not going to reveal any of the contents of the prime minister’s speech,’ he said.
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