Cameron to tell firms: It’s high time you gave Britain a pay rise

DAVID Cameron will today tell businesses enjoying their best conditions ‘for a long time’ that ‘it’s time Britain had a pay rise’.

He will also propose a minimum wage above £8 an hour by the end of the next Parliament.

Firms’ costs are falling thanks to the strongest economic growth for seven years and the lowest inflation for more than a decade, the Prime Minister will say.

His optimistic words echo the famous July 1957 speech by then Tory premier Harold ‘Supermac’ Macmillan that, at a time of low unemploy- ment and high growth, most Britons ‘have never had it so good’.

Mr Cameron, following a week of controversy over Labour’s ‘antibusiness’ rhetoric, will suggest the best answer business leaders can give to critics is to boost the pay and conditions of staff.

Pay has finally started to outstrip inflation, but firms should go further and ‘pass on the good economic news’, he is expected to tell captains of industry at the British Chambers of Commerce conference.

Tory strategists hope an increasing economic feelgood factor buoyed by jobs growth and low inflation putting more money in people’s pockets will translate into stronger wage increases by May’s general election. Wage growth has stubbornly low, allowing Labour to complain of a ‘cost of living crisis’.

The latest figures suggest pay has finally started to pick up, outstripping inflation. Pay rises increased by 1.7 per cent, including bonuses, in the three months to November.

Companies are thought to be sitting on £166billion in cash reserves after battening down the hatches in the recession. Profitability is at its highest level since 1998, as the economic recovery gathers pace and falling oil prices reduce costs.

Mr Cameron will say: ‘Now that our long-term economic plan is truly working, together we’ve got to make sure it works for everyone in our country. 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. Put simply – it’s time Britain had a pay rise.’

Mr Cameron will add that the recovery overseen by the Coalition has been marked by ‘astounding job creation’, with 1,000 more peo- ple in work, on average, every day since the election. Incredibly, more jobs were created in Yorkshire last year than in the whole of France.

The Prime Minister is expected to say: ‘To make sure more of those workers feel the effects of this recovery, this Government has already delivered the first realterms increase in the minimum wage since the crisis.

‘I want that to go further – indeed we are on a trajectory to over £8 an hour by 2020. As for business – 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 half a per cent.

‘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.’

Labour’s business spokesman Chuka Umunna will attempt to draw a line under his party’s row with business leaders, telling the conference that ‘we will work every day’ to make it easier for them to succeed. Shadow chancellor Ed Balls will claim Conservative plans for a referendum on EU membership risk damaging business, saying that ‘to walk away from Europe – our biggest trading market – would be a disaster for Britain’.

John Longworth, director general of the British Chambers of Commerce, will say that a reluctance to lend to small businesses remains a ‘chronic handicap’ to the economy.

Funding for small businesses continues to disappoint more than four years after the Mail launched its Make the Banks Lend campaign.

London Mayor Boris Johnson yesterday launched a strong attack on Labour leader Ed Miliband and Mr Balls, saying ‘everything they say or do seems redolent of a distaste for wealth creation’.

The Tories have moved three points ahead of Labour, the weekly survey commissioned by Lord Ashcroft shows – on 34 per cent, to Labour’s unchanged 31 per cent.

‘Astounding job creation’

‘Make sure it works for us all’