Kemi Badenoch, the Conservative leader, has raised significant concerns about the current minimum wage during a recent visit to a café struggling with increasing operational costs. She challenged the argument from business that they cannot continue to absorb the current minimum wage and argued against increasing it more. Badenoch’s comments came in the wake of a call from the Chancellor, Rachel Reeves for such place-based initiatives. She announced the minimum wage would go up for the first time by 4.1% to £12.71 per hour for workers aged over 21 from April.
During her visit to Ruth’s café, Badenoch saw firsthand the struggles small businesses are going through. Sharply rising staff wages and tax expenses are squeezing them. The owner of the small café was frustrated that she couldn’t keep her budget balanced and keep employees on staff. Badenoch recognized these challenges and stressed the importance of a prudent approach to wage policy.
Badenoch called it “irresponsible” to raise it any higher. We understand it’s hard for many businesses to afford, she said. She explained in more detail that employers need to have a way to raise wages without needing to fire employees.
Badenoch was further questioned on if she thought existing minimum wage levels were excessive. At first, she replied by pointing out that the government was following the recommendations of the Low Pay Commission by only raising the minimum wage to those levels. She said any further changes should come after discussions with business owners have been included.
“Stop government intervention. The government mandating minimum wage increases is not creating jobs. The jobs are disappearing. So that’s clearly not the problem.” – Kemi Badenoch
In her speech, “Getting Britain Working,” Badenoch focused on the opposition Labour party. She blasted them for making capitalism and business the focus of life, leaving welfare to take care of everything else. She said it’s misguided for the balance to have tilted so heavily in the wrong direction against workers. She promised that her party would launch a full review of labor policy toward the age of diagnosis.
As Badenoch highlighted, even popular things like increasing the minimum wage might sound good, but may end up hurting jobs in the long run. You can change the minimum wage to £1,000 per hour. But if businesses cannot absorb it, then we all get laid off,” she added.
She reemphasized the need to consult with business on what their ability to absorb wage hikes is. “We need to listen to what businesses are saying. It’s not government ministers that create jobs, it’s business that creates jobs,” she concluded.
As debates on wage policies heat up, Badenoch’s comments shed light on a troubling reality. Policymakers should be concerned about the sustainability of these minimum wage increases, especially in the current economic climate that is stressing small businesses across the country.