Bryan Sanderson advises the government on the minimum wage. He discussed the problem of enforcement and how Brexit could erode years’ worth of progressby Alex Dean / August 14, 2018 / Leave a comment
The introduction of the minimum wage in 1999 was one of New Labour’s greatest achievements. Overnight, millions of workers saw their pay leap up. Such was the level of success that in 2015 a Conservative Chancellor tried to get in on the act: George Osborne announced in his Budget a new national living wage.
This was really just a rebranding, but it confirmed that today there is something approaching consensus on the idea of a legal minimum. Few politicians on either side want to scrap the “wage floor” altogether. Since the financial crisis, the low-paid have seen their earnings increase far faster than the average worker—counter to the usual media narrative.
Few know more about the impact of the minimum wage than Bryan Sanderson, Chair of the Low Pay Commission. The LPC is the independent body which has advised the government on rates for the NMW and NLW since their introduction. Now in his late 70s, Sanderson spent years in industry and finance before taking the helm last year.
Over the course of our conversation it became clear that all is not well. Sanderson is increasingly worried, and told me earlier this month that the lowest paid could be about to suffer an economic blow. Brexit storm clouds are gathering.
We discussed first the progress that has been made. “If we go back to the banking crisis, the real wages of people on the minimum are up 11 per cent since then,” he told me. Those on low wages “started from a low base, which, of course, you wouldn’t wish, but they have done well. They’re ahead of the game.” There are various different age bands for the minimum wage: for those aged over 21 the sum is now £7.38. The national living wage is essentially a minimum for those aged 25 plus, and is currently £7.83 (this differs again from the “real living wage,” a higher sum voluntarily paid by 4,000 employers.)
Sanderson would be expected to brag about the impact of the minimum wage. But the truth is he’s right. The NMW has boosted pay significantly. It has also helped those further up the system: there is a ripple effect which means millions more benefit when the wage floor is lifted, and Sanderson puts the number directly or indirectly affected at seven million. There has…