The Tories in Bournemouth: Minimum wage 'just privatisation of Family Credit'

A MINIMUM wage would in effect be a way of privatising Family Credit, and discussion of it should no longer be taboo in the Tory party, Alan Howarth, the former higher education minister and Conservative MP for Stratford on Avon, said yesterday.

His revolutionary way of looking at the minimum wage came in a fringe speech to the Child Poverty Action Group in which Mr Howarth said: 'We should not worry as to whether the means of relieving poverty are public or private; what matters is that we find the most effective combination of ways to do so.'

His comments came as the bill for Family Credit - the benefit paid to those in work - is shooting up. The numbers receiving it have roughly doubled in three years to 500,000, and the pounds 1bn a year cost is set to rise further.

Global competition would no doubt over time create wealth, Mr Howarth, a liberal on social policy, said. 'But many people and their families are at risk of being casualties in the process. The family wage, for many in our society, is already a dim memory, and families must be supported.

'We can support them, as we are doing, through Family Credit, though we had better recognise that the bill could rapidly become very large.' Labour's alternative was to require employers to pay a minimum wage, which 'would in effect be the privatisation of Family Credit. It is interesting, therefore, that discussion of the minimum wage is taboo in the Conservative Party.'

That irony, Mr Howarth added, illustrated two things: 'It shows us that the concepts of left and right have largely ceased to be useful, in social policy at least. It also reminds us that the costs of poverty are inescapable.

'They can be borne by the taxpayer, including the corporate taxpayer, through the social security system, or they can be borne directly by employers'.

They could also be borne through ill-health, higher crime and poor educational attainment and skills. Or they could be borne through constructive social policies.

In a jibe at Michael Portillo and his advocacy of minimal state involvement in welfare, Mr Howarth added: 'It would seem obvious that the latter course is preferable,' but he warned that 'will entail more than a nugatory state'.