The minimum wage is no longer affordable. Before any work has been done, an employer must commit £28,308.52 – the minimum amount of money required to cover a full-time national living wage salary, employer national insurance contributions and pension auto-enrolment. Many employers now can’t pay it. The result: our minimum wage laws have become a major driver of youth unemployment.

When Tony Blair’s New Labour introduced the minimum wage in 1999 – set at £3.60 for people above 22 years and £3.00 for workers aged 18–21 – it was 46 per cent of the median wage. At the time, Tory MPs such as Michael Fallon warned that a statutory minimum wage would add to public spending, damage competitiveness and discourage people from upskilling. Low-paid workers would become too expensive to hire and wage inflation would spiral.

The job losses did not come then, Tories seemed to change their minds and in 2005 David Cameron stated that the minimum wage ‘has been a success’. The sceptics were not wrong about the underlying economics, however; they only misjudged the scale.

We need to face the fact that the minimum wage is a blunt instrument to combat poverty

We need to face the fact that the minimum wage is a blunt instrument........

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