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10 April 2017

With a £10 minimum wage and free school meals, Labour is raising its game on policy

Both are simple and popular pledges for Jeremy Corbyn to make.

By George Eaton

You wait for one Labour policy and two come along at once. After last week pledging to fund universal free school meals by imposing VAT on private school fees, Jeremy Corbyn has today vowed to raise the minimum wage to £10 by 2020. The policy isn’t technically new (it was first announced by John McDonnell in 2015) but as all spinners know, repetition is a virtue in politics.

Labour is wisely using the space provided by the parliamentary recess to win positive headlines for simple and attractive policies (another intervention will follow tomorrow). Corbyn’s decision to focus on living standards is a wise riposte to both his internal and external opponents. A frequent criticism levelled by Labour MPs is that their leader lacks policies. The 10 pledges announced by Corbyn during the 2016 leadership election have been little developed since. But the last week suggests that is beginning to change. Corbyn has pragmatically downplayed stances such as Trident abolition in favour of focusing on areas where there is party unity (such as education and health).

Since entering Downing Street, Theresa May has made it her stated mission to raise living standards for all, most notably the “just about managing”. But weaker earnings growth means the minimum wage (or the “National Living Wage” as George Osborne rebranded it) is now forecast to reach £8.75 by 2020, rather than Osborne’s original £9 target. Under Corbyn’s £10, full-time workers will be £2,500 better off by the end of the parliament. Labour has also pledged to abolish the lower rate for under-25s, who will be £4,500 better off. 

The resultant warning from economists is that a higher minimum wage would cost low-skilled jobs. But, unsurprisingly, polls have shown consistent support for the policy from voters. Real average earnings are forecast by Resolution Foundation to only return to their pre-crisis peak (2007) in 2022 and are facing a renewed squeeze from rising inflation and benefit cuts.

When Labour pledged to provide universal free school meals, Theresa May warned that the party would “bankrupt Britain” but, tellingly, did not dismiss the policy (prompting speculation that the Conservatives themselves could embrace it). They have similarly avoided dismissing a pay rise for 5.6 million workers (instead warning that “the only way you can raise the minimum wage is with a strong economy”). After remorselessly grim polls, Labour is beginning to raise its game on policy. Though the party is prodigiously far from being a government-in-waiting, or even a strong opposition, it is at least acquiring some of the features of the latter.

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