Osborne's minimum wage move is a huge political opportunity for Labour

By conceding that a large rise would not cost jobs or damage the public finances, Osborne has made it harder for the Tories to credibly oppose a more radical offer from Miliband.

Margaret Thatcher memorably described New Labour as her "greatest achievement". In the same spirit, Labour can greet George Osborne's announcement that he favours "above-inflation increases" in the minimum wage as a remarkable act of political flattery. When Tony Blair and Gordon Brown introduced the policy in 1999, the Tories rejected it as a jobs killer; they are now competing with Labour to promise the biggest rise. There is no better example of how Miliband's party has shifted the centre ground to the left. 

But in both its content and its timing (the day before Miliband's long-trailed speech on the economy this morning), Osborne's gambit is uncomfortable for Labour. It is a reminder of the biggest advantage that a government has over the opposition: while the latter can only talk, it can act. But Osborne's move also opens up new political opportunities for Labour. If the Tories want to enter a bidding war with the opposition on living standards, Labour should be confident that it is one it can win.

Having shifted from denying the living standards crisis to seeking solutions to it (while attempting to blame the last government), it will become harder for the Tories to fend off reminders of how much ground has been lost since 2010 (with the average family, as Labour never lets us forget, £1,600 a year worse off). After the biggest fall in real wages under any government in recorded history and the retoxification of the Conservative brand through the abolition of the 50p tax rate , the danger for the Tories is that a rise in the minimum wage just looks like crumbs from the table. While the Conservatives enjoy a convincing poll lead on the economy, they have long trailed Labour as the party that would do most to improve family incomes. Osborne's announcement might have left the Tories in a better position than before, but they will still struggle to win an election defined by living standards. A tactical victory could become a strategic defeat. 

By conceding that a rise in the minimum wage (which has fallen back to its 2004 level) would not cost jobs and would have a neutral effect on the public finances (with the anticipated fall in corporate tax receipts offset by higher income tax receipts and lower benefits), Osborne has also made it harder for the Tories to oppose a more radical offer from Labour. Many on the left would like Miliband to respond by pledging to introduce a universal living wage, which would see the minimum wage rise from £6.31 to £7.65 in the UK and £8.80 in London. But with respected forecasters such as NIESR estimating that such a move would reduce labour demand by 160,000 jobs, the equivalent of a 0.5% rise in unemployment, this remains unlikely (although a poll last year found that 60% support a universal living wage even if it costs jobs).

It's worth remembering, however, that Labour has already gone further than any of the other main parties by suggesting that it should become compulsory for all public sector contractors and government departments to pay the living wage and by promising tax incentives for private sector employers to do so. When Miliband announced his plan last November, the Tories responded by claiming, with no accompanying evidence, that the policy was "unworkable" and would have "a substantial extra cost to the Exchequer". But after Osborne's embrace of higher wages, such stock lines will be less convincing than ever. If Labour outlines a plan that is both credible and radical, and that the Tories, for ideological reasons, are unable to support, the Chancellor may well regret playing on Miliband's pitch. 

George Osborne delivering his speech on EU reform in London on Wednesday. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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