B1135 - Minimum Wage Amendment Bill 2017 (Second Reading) Watch

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adam9317
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Minimum Wage Amendment Bill 2017, TSR Conservative & Unionist Party

A

BILL

TO

Make provision for an amendment to the minimum wage

BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:—

1 Definitions
(1) The employment target is an employment rate of 72%.
(2) A mid cap firm is defined as a company which has a market capitialazation over £1,000,000,000.
(3) A large cap firm is defined as company which has a market capitalization over £5,000,000,000.
(4) Inflation is the annual percentage change in the consumer price index.

2 Repeal
(1) Section 2 of V731 is hereby repealed.

3 Minimum wage changes
(1) If employment is higher than the employment target the minimum wage will rise two and a half times the rate of inflation for that year. The pay rise will occur on the 1st April each year.
(2) If there are two consecutive quarters of negative economic growth than the minimum wage shall be frozen for the following 12 months.
(3) The minimum wage shall not rise by more than 7.5%.

4 Mid cap and large cap firms
(1) If a mid cap firm or large cap firm has an annual revenue growth greater than 10% then they must give their lowest quartile of staff an annual 3% pay rise. The pay rise will occur on the 1st April each year.

5 Extent, short title and commencement
(1) This Act extends to the United Kingdom.
(2) The provisions of this Act come into force on the 1st January 2018.
(3) This Act may be referred to as The Minimum Wage Amendment Act 2017.

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V731 is here.

Currently on TSR the living wage is determined by the Living Wage Foundation. It is currently £9.75 per hour in London and £8.45 in the UK. You can visit the website here. The Conservative Party believe that provided the employment target is being met, raising the minimum wage 2.5x the rate of inflation is a much better way to raise wages for the poor and to lift people out of poverty. To start off with the rates will be determined by the Living Wage Foundation will be the starting point.

This Bill sets an employment target. If the employment target is being met this causes the minimum wage to rise. This means that the poorest in society will also benefit from high employment. The Conservative Party have picked 72% as an employment target because since 2000 the employment rate has steadily been above 72% and only fell below this rate when the 2008 recession occurred (we would expect this to be the same in the next recession). The current and past employment statistics are here.

If the economy goes into recession or there is a decline in employment then the minimum wage shall be frozen to ensure a minimum amount of lay offs occur.
We have also inserted a cap to ensure the minimum wage does not raise more than is sustainable.
Lastly, we are implementing our manifesto promise which states that if a mid cap/large cap company makes a big profit, the poorest workers should receive some of the benefits and not just those at the top.

This Bill benefits the poorest in society and allows them to benefit from employment figures and the Conservative Party sincerely believes no one should be left behind.
As Theresa May said on the steps of downing street,"we will work not for a privileged few, but for all of you".

Changes for second reading:
1) Inserted a cap.
2) Defined inflation as the percentage change in the consumer price index.
3) Made the minimum wage rise 2.5x the rate of inflation.
4) Froze the minimum wage in the event of recession.
5) Changed the definition of large cap and mid cap companies. (Using market capitalisation instead of payable tax)

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username2585877
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Owain5
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Jammy Duel
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And this has not fixed the bill, inflation remains far higher than is desirable, even if the price wage spiral is suppressed

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username2808800
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(Original post by Jammy Duel)
And this has not fixed the bill, inflation remains far higher than is desirable, even if the price wage spiral is suppressed

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It is capped and have you heard of the bank of England?
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Rakas21
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Aye.

(Original post by Jammy Duel)
And this has not fixed the bill, inflation remains far higher than is desirable, even if the price wage spiral is suppressed

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As you pointed out yourself, a small minority will be caught by this so the inflationary effects will not be significant.
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Mr T 999
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I'm leaning towards an aye.....

But my concern is won't this cost businesses more if min wage increases 2.5x the inflation rate?
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(Original post by mr T 999)
I'm leaning towards an aye.....

But my concern is won't this cost businesses more if min wage increases 2.5x the inflation rate?
The minimum wage last year rose 6%, the minimum wage at the end of this month will rise 4%. If the BOE does their job then this bill will see the minimum wage rise 5%, if it does not then we still cap the rise at 7.5%.

The beauty of this bill is that if the minimum wage ever does get too high and employment declines, then the rate will stop rising. That is the beauty of tying the rate to employment.
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No, I do not supporting forcing businesses to increase their costs when circumstances may mean businesses cannot afford to increase their costs. This can be a bill to bind state employers, however, I am not going to support a bill to bind private companies, with unemployment the result.
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Jammy Duel
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(Original post by fleky6910)
It is capped and have you heard of the bank of England?
(Original post by Rakas21)
Aye.



As you pointed out yourself, a small minority will be caught by this so the inflationary effects will not be significant.
(Original post by Rakas21)
The minimum wage last year rose 6%, the minimum wage at the end of this month will rise 4%. If the BOE does their job then this bill will see the minimum wage rise 5%, if it does not then we still cap the rise at 7.5%.

The beauty of this bill is that if the minimum wage ever does get too high and employment declines, then the rate will stop rising. That is the beauty of tying the rate to employment.
Your entire argument relies on the BoE being able to "do its job" without any serious implications. How are they going to suppress the inflation from 7.5% wage growth? Put the base rate up. How high? God knows, especially when people have more money than they think they will ever need and say "sod this, I'm going to start spending" either they spend it domestically and contribute to inflation, or we get a big outward flow of money as people spend it abroad, or on foreign products.

And I see you there defending it with higher than normal minimum wage increases from the Tories forgetting they aren't new labour, but there are a few things to consider. First and foremost that before that 6% increase there had been about half a decade of ~2% year on year increases. Second that 6% is basically one off. But the most important factor needs a paragraph to itself.

If we look at historic increases you see a nice little pattern: the increases are 3-4% a year, in other words they're more or less in line with organic, market driven increases, as you yourself noted the purpose of the minimum wage is to ensure that no full time employee is in ARBITRARILY DEFINED relative poverty. And we must nor forget that relative poverty is arbitrarily defined, what does it actually mean for an individual to be in relative poverty, well, not much; it doesn't mean they can't go on holiday, it doesn't mean they can't have sky, it doesn't mean they can't be getting a new flagship phone every few years, all it means is they earn less than 60% of the average. There are no real indicators of relative poverty, you can't look at somebody and say whether they're in relative poverty or not if near the cut off, it exists entirely statistically. And that close relationship between average and minimum growth is not minimum driving average, it's clearly average driving minimum, the average wage growth rate has been as it is for decades, the introduction of the minimum wage has not changed it, nor reduced those with hourly rates which translate to relative poverty, or the cut off point.

What this bill does is take that indirect organic growth and make it government mandated inorganic growth. From the market driven growth to state enforced growth. Within a decade that 40% gap becomes 0, if the average were to grow organically (Obviously it wouldn't, you're inorganically forcing it up at the expense of jobs); what is the average wage now would be, adjusted for natural and organic wage growth, the minimum by 2030, even if we assume the BoE is able to do it's job perfectly it is still only pushed back to ~2040.

If you want a minimum wage that is market led no changes are needed (vs real life policy).

And of course, let us not forget that the 72% threshold means that anything short of a significant recession is likely to keep the employment level high enough when were using RL employment levels.

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Basiil17
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TheDefiniteArticle has this addressed your concerns?
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BobBobson
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The fundamental idea of the bill is flawed. No extra readings will fix that.
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Jammy Duel
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Interesting how neither Rakas nor Fleky have come back on why their argument is flawed

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username2808800
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(Original post by Jammy Duel)
Your entire argument relies on the BoE being able to "do its job" without any serious implications. How are they going to suppress the inflation from 7.5% wage growth? Put the base rate up. How high? God knows, especially when people have more money than they think they will ever need and say "sod this, I'm going to start spending" either they spend it domestically and contribute to inflation, or we get a big outward flow of money as people spend it abroad, or on foreign products.
The minimum wage last year rose 6%, the minimum wage at the end of this month will rise 4%. If the BOE does their job then this bill will see the minimum wage rise 5%, if it does not then we still cap the rise at 7.5%.
So the minimum wage wage has actually been rising more than we have proposed.
We have also triggered a freeze in the recession( I suggested a 15% decline but that' would get shot down by the house).
The bank of England raises interest rates to curb inflation.
Also you yourself pointed out that very few people will be affected by this so there should be no inflationary spiral should occur.
I shall also consider putting a £15 cap( so it can never rise about £15 ever )

(Original post by Jammy Duel)
Ynt factor needs a paragraph to itself.

If we look at historic increases you see a nice little pattern: the increases are 3-4% a year, in other words they're more or less in line with organic, market driven increases, as you yourself noted the purpose of the minimum wage is to ensure that no full time employee is in ARBITRARILY DEFINED relative poverty.
So this bill roughly does the same so there is no really an argument here.

(Original post by Jammy Duel)
And of course, let us not forget that the 72% threshold means that anything short of a significant recession is likely to keep the employment level high enough when were using RL employment levels.
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Ok what do you propose?
Tie to inflation or 1.5x and then if we exceed a higher employment rate increase it more?(2.5X)
As you pointed out this bill will increase the minimum wage less than it is currently rising.
And currently I see no inflationary spiral(although inflation is on the rise but this is due to the weak pound)
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TheDefiniteArticle
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(Original post by fleky6910)
TheDefiniteArticle has this addressed your concerns?
I'm opposed to sections 3(2) and 3(3). You could change that by adding a provision to the effect of 'except by order of the Secretary of State' (pick a Secretary).
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(Original post by fleky6910)
The minimum wage last year rose 6%, the minimum wage at the end of this month will rise 4%. If the BOE does their job then this bill will see the minimum wage rise 5%, if it does not then we still cap the rise at 7.5%.
So the minimum wage wage has actually been rising more than we have proposed.
We have also triggered a freeze in the recession( I suggested a 15% decline but that' would get shot down by the house).
The bank of England raises interest rates to curb inflation.
Also you yourself pointed out that very few people will be affected by this so there should be no inflationary spiral should occur.
I shall also consider putting a £15 cap( so it can never rise about £15 ever )



So this bill roughly does the same so there is no really an argument here.



Ok what do you propose?
Tie to inflation or 1.5x and then if we exceed a higher employment rate increase it more?(2.5X)
As you pointed out this bill will increase the minimum wage less than it is currently rising.
And currently I see no inflationary spiral(although inflation is on the rise but this is due to the weak pound)
You do realise that simply repeating your argument does not constitute a refutation, merely a repudiation? Try to actually refute.

You like to talk a lot about the BoE "doing its job", well, this is what that looks like when you don't have a rate of minimum wage growth that destroys job creation:

This policy would have stopped the recovery happening because the jobs market would not have picked up, you'd either be looking at recession and a lack of money to hire, and then when out of recession we would dip straight back in because businesses would not be able to afford the wage increases.

You'll also find a MASSIVE difference between 3% and 5% which means that you will in a matter of years be going from 5% to 10% to 20% of the workforce on the minimum, at least the ones that still have their jobs, employment will be stuck at 72% and as soon as a recession comes god help us, but then I guess you didn't get that far before going "oh ****, repudiate, repudiate!"

Rakas wants a market lead minimum, if he wants that, and you want that, you would withdraw this bill.
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username2808800
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(Original post by Jammy Duel)
You do realise that simply repeating your argument does not constitute a refutation, merely a repudiation? Try to actually refute.

You like to talk a lot about the BoE "doing its job", well, this is what that looks like when you don't have a rate of minimum wage growth that destroys job creation:

This policy would have stopped the recovery happening because the jobs market would not have picked up, you'd either be looking at recession and a lack of money to hire, and then when out of recession we would dip straight back in because businesses would not be able to afford the wage increases.

You'll also find a MASSIVE difference between 3% and 5% which means that you will in a matter of years be going from 5% to 10% to 20% of the workforce on the minimum, at least the ones that still have their jobs, employment will be stuck at 72% and as soon as a recession comes god help us, but then I guess you didn't get that far before going "oh ****, repudiate, repudiate!"

Rakas wants a market lead minimum, if he wants that, and you want that, you would withdraw this bill.
There is nothing more to be said.
What about the changes I proposed to make?
I shall confer with Rakas.
If it were linked to the RPI it would have decreased so that may have played out in our favour.( changing it to RPI may help)
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Rakas21
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Thoughts.

iEthan
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toronto353
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(Original post by fleky6910)
There is nothing more to be said.
What about the changes I proposed to make?
I shall confer with Rakas.
If it were linked to the RPI it would have decreased so that may have played out in our favour.( changing it to RPI may help)
We had RPI in the first reading but Jammy asserted that was bad because the BOE have no RPI inflation target hence why we offered this CPI compramise despite RPI being a more accurate measure of inflation.

For now we call on our hand (poker).
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(Original post by Rakas21)
Thoughts.

iEthan
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Airmed (proxied by PetrosAC)
toronto353
chelseadagg3r
Birchington
mr T 999
hazzer1998
LifeIsFine



We had RPI in the first reading but Jammy asserted that was bad because the BOE have no RPI inflation target hence why we offered this CPI compramise despite RPI being a more accurate measure of inflation.

For now we call on our hand (poker).
Happy to support this Second Reading.
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