Poll: Does Britain need a pay rise?

Prime Minister David Cameron. Photo: Peter Byrne/PA Wire

Prime Minister David Cameron. Photo: Peter Byrne/PA Wire - Credit: PA

David Cameron will urge business leaders to pass on the benefits of growth and low oil prices by giving employees a pay rise.

The Prime Minister will say that economic success should be demonstrated not just in the GDP figures but in the contents of workers' wallets.

He will highlight the above-inflation rise in the minimum wage as a sign that the Government is doing its bit as he tells bosses: 'It's time Britain had a pay rise.'

In a speech at the British Chambers of Commerce annual conference, he will say: 'Economic success can't just be shown in the GDP figures or on the balance sheets of British businesses ... but in people's pay packets and bank accounts and lifestyles.

'The most recent figures show that wages are already growing faster than inflation and as the economy continues to grow it's important this continues and that everyone benefits.

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'Put simply - it's time Britain had a pay rise.'

The Prime Minister, who hopes that growing economic confidence will boost the chances of Tory success at the general election, is making a direct appeal to business chiefs to share the proceeds with their workforces.

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He will say that the 'astounding job creation' in the economic recovery meant '1,000 more people in work, on average, every single day since the election' in 2010.

The Prime Minister will highlight the Government delivering 'the first real-terms increase in the minimum wage since the crisis' and indicate that he wants to go further, with the current trajectory set to take the benchmark to over £8 an hour by 2020.

He will tell the conference in Westminster: 'The conditions have not been this good for a long time. We've got the strongest growth for seven years.

'We are seeing falling oil prices, meaning businesses up and down the country have lower prices on their inputs.

'Inflation is at 0.5%.

'Now that your costs are falling and it's cheaper to do business, I'm confident that more businesses will pass on that good economic news to their workers in rising pay cheques and higher earnings.

'That's good for your employees, it's good for you to have happier and more productive staff and frankly it's good for anyone who wants to make the argument for business.

'Because for us business is not a conspiracy of runaway profits, depressed wages, inequality and unfairness ... it is the best generator of growth, wealth, work and opportunity there is and there would be no better way to demonstrate that right now than to give Britain a pay rise.'

The TUC's general secretary Frances O'Grady dismissed Mr Cameron's call as 'no more than pre-election mood music'.

She said: 'Since David Cameron became Prime Minister, the average wage is worth £2,500 less a year, the worst fall in living standards since Queen Victoria was on the throne.

'Saying it would be nice if wages went up is no more than pre-election mood music. If elected again his policies would do the opposite.

'Huge cuts would take spending back to the same share of the economy as in the 1930s. This would depress the economy and mean public sector wages would fall every year. On top of that he would make strikes almost impossible, holding back pay across every sector.'

Unite general secretary Len McCluskey said: 'If Cameron was serious about giving Britain a pay rise then he'd put his money where his mouth is and immediately boost the minimum wage by at least £1.50 an hour with the promise of a living wage. Instead we have empty words, which don't put food on the table or pay the rent.'

Unison's general secretary Dave Prentis said: 'If Jeremy Hunt was following David Cameron's lead, he would have implemented the NHS pay review body's recommendations in full last month.'

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