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Vince Cable in York: Society still very divided
BRITAIN is a deeply unequal society, business secretary Vince Cable admitted on a flying visit to York yesterday. The question was, what can we do about it?
Addressing a meeting of business, community and policy leaders hosted by the Joseph Rowntree Foundation, Dr Cable admitted there were no easy answers.
The national minimum wage – introduced by Labour in 1999, and currently set at £6.19 an hour – had helped raise the standard of living of the lowest-paid, he said.
So had the lower tax thresholds for those on lower incomes introduced by his Government.
These had ensured that, through the recession, 40 per cent of adults earning the minimum wage had seen a real-terms increase in income.
But Dr Cable admitted there was still a “very big gap between people at the top and bottom of society”.
The business secretary told the meeting at York St John University that he had serious reservations about introducing as policy a national “living wage”, which would set minimum incomes at £7.45 an hour, considerably higher than the minimum wage.
“My heart is with it, but my head is in a different place,” he said.
If imposed as policy, the living wage would have “serious economic consequences”, he said. Hundreds of thousands of people, many of them younger people, would lose their jobs.
Undoubtedly there are companies that could afford to pay their lowest-paid staff more, he conceded. And as a moral example, and a measure for employers to aim for, the living wage was a good idea.
“But I do worry about it becoming a policy tool. A general application of the living wage at the kind of level discussed would have a very considerable impact on employment.”
Earlier, Joseph Rowntree Society chief executive Julia Unwin had pointed out that, because incomes had not kept pace with the cost of living, there was now a real problem of people in work still living in poverty. It was no longer a problem only for the unemployed, she said.
Cable revels in home comforts
YOU could tell there was someone important in town from the gaggle of protesters gathered in Lord Mayor’s Walk.
“Say no to the bedroom tax!” and “Stop the war on benefits!” read their placards. Had they known David Cameron was going to be at Portakabin, across town, no doubt they’d have been there instead.
As it was, they settled for picketing the arrival of a scarcely less prominent national politician – the business secretary Vince Cable.
The man himself appeared entirely unruffled by their presence when he arrived at York St John University shortly before 10am.
He spent 15 minutes closeted with Julia Unwin, the chief executive of the Joseph Rowntree Foundation, which had organised the meeting to talk about low pay.
Then he took the podium to address an audience of 100-or-so business, community and policy leaders.
He began with a warm tribute to York.
“I responded to this invitation with real enthusiasm because I love coming back,” he said. He went to school here – at Nunthorpe Grammar – and he attended Quaker meetings here. “So I was brought up very much in the Rowntree tradition.” His father’s family grew up in Layerthorpe, where Rowntree did much of his early work on poverty, Dr Cable noted – and which, he remembered, always “smelled of gas”.
And so on to the issue of the day – low pay. Dr Cable made no policy statements, and gave no sweeping assurances. There was one sideswipe at Government colleagues who had failed to back the idea of a Mansion Tax. And there was some surprisingly straight talking. Britain was a “very unequal country”, he said, and there was a “very big gap between the people at the top and the bottom”.
He also gave an incise analysis of the recession. It was unlike any in recent times, he said, because instead of a massive rise in unemployment, what we saw was a big drop in wages.
“Ever since the Second World War, wages have risen even in recession. Yet since the period of the economic crash in 2008/9, real-terms wages have fallen by about 12 per cent.”
Questioned about the gap between the lowest paid and the highest paid, Dr Cable said new legislation which came into force this month meant shareholders would have to approve the pay rises of senior executives. “We will see how that works.”
But the greatest inequality was not in wages, but in wealth, he said – mainly because of the boom in property prices. Which was when he couldn’t resist taking that swipe at government colleagues.
“Some of us,” he said pointedly, “have advocated a Mansion Tax.”
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