Chancellor says UK ‘can afford’ above-inflation rise in minimum wage

Britain can afford an above-inflation increase in the national minimum wage, Chancellor George Osborne has said.

Mr Osborne indicated he was ready to contemplate a rise in the £6.31-an-hour minimum wage to £7.

His comments came shortly after the Department for Business made its submission to the Low Pay Commission, which will shortly produce its recommendations on the rise.

Mr Osborne told the BBC: “I think Britain can afford a higher minimum wage. I think we have worked hard to get to this point and we can start to to enjoy the fruits of all that hard work.”

He added: “The exact figure has to be set by the Low Pay Commission, which talks to business, talks to other bodies in our economy.

“I think we can see an above-inflation increase in the minimum wage and do it in a way that supports our economy precisely because the economy is recovering and many, many jobs are being created.”

A rise to £7 per hour would represent a rise of almost 11% from the present rate.

Welcoming Mr Osborne’s comments, TUC general secretary Frances O’Grady added: “The Chancellor should be more ambitious about achieving decent pay rises across the whole of the UK workforce.”