David Skelton is the director of Renewal, an organisation dedicated to broadening the appeal of the Conservative Party
The recession that followed the financial crash in 2008 was grim for everybody. Unemployment rocketed upwards by almost 1 million in a year, businesses both large and small went to the wall and workers saw their hours and wages squeezed.
At the same time, the country stood on the brink of near bankruptcy, threatening the strength and vibrancy of our economy for years to come.
The corner has now, thank goodness, been well and truly turned. Whereas in 2010, the British economy was in dire straits, it is now one of the fastest growing economies in the Western world, praised by Christine Lagarde and President Obama.
Labour’s legacy of mass unemployment has been replaced with a genuine move towards full employment, with 2.2 million private sector jobs being created since the election and millions being empowered by the move from the dole queue to work.
Making the UK one of the best places in the world for the private sector to create jobs has helped to enable this move towards full employment and seen the creation of 760,000 more businesses over the past few years.
Doubling of rate relief, doubling of the investment allowance and cutting corporation tax so it’s the lowest in the G20 have all contributed to an unapologetically pro-business environment, where jobs are created and profits are close to a record high.
Conservatism at its best is both pro-business and pro-worker, both rewarding entrepreneurship and ensuring that work pays. We are, rightly, always on the side of the entrepreneurs who take risks in order to create jobs.
And we’re also on the side of the hard-working man or woman, who’s had to make sacrifices over the past few years during economic hard times.
This pro-worker conservatism was seen with cuts in fuel duty, taking the poorest out of tax altogether and raising the minimum wage by above inflation for the first time since the financial crash.
The Prime Minister is right to push for firms to turn their growing profits into higher wages. The Low Pay Commission should now consider a sizeable increase in the Minimum Wage, given that unemployment has been falling for over three years and the UK economy is now the strongest in Europe.
Big businesses should also be encouraged to pay the Living Wage, of which Boris Johnson has been a tremendous champion in London.
The climate is now right to see rising profits translated into higher wages, with a low business tax environment, strong growth and falling energy costs are translated into higher wages.
Corporate profitability is at a 16 year high and shareholder dividends are at a record high. It’s crucial that this success is shared with the workers who helped create it and shows up in their pay packets.
Workers have made considerable sacrifices over recent years and it’s only right that these sacrifices are rewarded.
As Conservatives, who believe in enterprise, we should philosophically support such a step for a number of reasons.
First, it shows that enterprise is not only the best way of creating jobs and wealth, it’s also ensures that everybody grows more prosperous, with workers having a stake in corporate success. In short, rebuilding the link between economic growth and higher wages will do more than anything else to restore faith in business.
Second, higher wages mean that workers can spend more time with their families – helping to strengthen the family unit that stands at the centre of conservatism.
The strong economy means that we’re now in a position to see sustained increases in wages. But the link between a strong economy and higher wages for workers should never be forgotten. Despite Labour’s rhetoric, median wages stagnated from 2003 as they focussed purely on the City of London.
It was Labour’s economic mismanagement that meant that the minimum wage lost value from 2008 until last year. If Labour are allowed to crash the economy again, it’s working people who will suffer the most.
We know that Labour are anti-business, but the reality of their policies is that they’re not in the interests of workers either. Conservatives should be strongly making the case that we’re the party who champions the low paid and will deliver higher wages.
By showing that economic growth delivers higher wages, we can prove that Conservatism is strongly on the side of workers and of responsible business.