Minimum wage should not go any higher, suggests Badenoch

Conservative leader Kemi Badenoch has questioned whether businesses can afford the current minimum wage and suggested that it should not increase further.

In an interview with the BBC, Badenoch said she had increased the minimum wage when she was in government, but “a lot of businesses” had then told her that, as a result, they had had to lose staff.

She added: “I don’t think we should be raising it any more for example, we’ve seen that too many businesses can’t pay for it.”

Chancellor Rachel Reeves announced the minimum wage would rise 4.1% to £12.71 an hour for workers aged over 21 from April in her Budget last month.

The National Minimum Wage for 18 to 20-year-olds will also increase by 8.5% to £10.85 per hour, and the rate for 16 and 17-year-olds as well as those on apprenticeships, will increase by 6% to £8 per hour.

Asked if she believed the rates were now too high, Badenoch said: “When I was business secretary I raised the minimum wage and a lot of businesses told me that yes, you’ve raised it but we can’t afford it and we’ve got to let go of staff.”

Questioned whether that meant businesses had been right and she had been wrong, Badenoch replied: “We need to listen to what businesses are saying. It’s not government ministers that create jobs, it’s business that creates jobs.

“We need to make sure that we set the minimum wage at a good level but we also need to make sure that their other burdens, their business rates, their corporation taxes, all of the things they do – the endless regulation, the employment rights bill: they’re just sick and tired of so much happening.

“Let’s lighten that burden.”

Pressed on whether the minimum wage is currently at the right level, Badenoch said that the government had set it at the rate the Low Pay Commission had said, but businesses needed to be consulted.

“I don’t think that we should be raising it any more for example, we’ve seen that too many businesses can’t pay for it.

“You can make the minimum wage £1,000 per hour, if businesses can’t pay it none of us are going to have a job.”

Asked if she therefore believed that there should be no further increases in the minimum wage, Badenoch said: “Stop government intervention. The government mandating minimum wage increases is not creating jobs. The jobs are disappearing. So that’s clearly not the problem.”

In a speech titled Getting Britain Working, Badenoch said Labour had got the balance between welfare and business wrong, and had tipped things too far against workers.

Badenoch talked about visiting a cafe owner called Ruth, who burst into tears over how hard it was to run her business when costs for staff and taxes kept going up.

“What last month’s budget shows us is that Labour has given up on working people like Ruth,” she said.

“While she was struggling millions of people who refuse to work are going to be rewarded.

“We’re paying more than the entire population of Norway to sit at home…this is economic suicide.”

The Tory leader said the party would carry out a “full review” of which conditions qualify a person for welfare support, saying the system was currently not designed to handle “the age of diagnosis which we now live in”, where she said “one in four people class themselves as disabled”.

Badenoch claimed there were “a lot of people not taking jobs because they think those jobs are beneath them” and questioned whether “mild” conditions, which she specified as including anxiety and attention deficit hyperactive disorder (ADHD) should be counted as disabilities at all.

“Being diagnosed with anxiety can be worth more than £20,000 to some families,” she said, adding that “sick-fluencers” were teaching people how to “game the system” on social media platforms.

Sir Keir Starmer was forced to abandon welfare cuts planned earlier this year in the face of a major backbench rebellion, though the government is carrying out its own review and has insisted it will press on with reforms to the system.

A Labour Party spokesperson said that under the Conservatives, the benefits bill had “rocketed by £114bn and nearly a million kids were plunged into poverty”.

“The Tories’ message on welfare is: we broke it, now put us back in charge,” they said.

“This Labour government is reforming the welfare and the skills system to get people back into the work and out of the doom loop of joblessness which spiralled out of control under the Tories.”

Lib Dem MP Layla Moran, who is the chair of the health and care select committee, said there was “a mental health epidemic” and people were being turned away from mental health services too often.

“I really worry about this rhetoric that people with mental illness are somehow making it up or in some way need pushing to get better,” she said.

“They know full well that if they got a job they would feel better about life – it’s quite often the lack of a job that is causing the anxiety and depression – but the answer to that is not to pull out the rug from under them.”