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Conservative leader Kemi Badenoch has expressed doubts about whether businesses are able to sustain the current minimum wage and has indicated that further increases should be reconsidered. Speaking to the BBC, Badenoch reflected on her time in government when she implemented a rise in the minimum wage, noting that many businesses reported losing staff as a consequence. She stated, “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.”
The Chancellor, Rachel Reeves, announced in last month’s Budget a 4.1% increase in the minimum wage to £12.71 per hour for workers aged over 21, effective from April. In addition, the minimum wage for the 18 to 20 age group will see a rise of 8.5% to £10.85 per hour, while 16 and 17-year-olds and apprentices will receive a 6% increase raising their rate to £8 per hour. When questioned about whether these new rates were too high, Badenoch reiterated that businesses had previously communicated their struggles with affordability following similar wage increases. She emphasized the importance of listening to businesses, as “it’s not government ministers that create jobs, it’s business that creates jobs.”
Badenoch also highlighted other challenges facing businesses, such as high business rates, corporation taxes, extensive regulation, and employment legislation, and called for reducing these burdens to support economic growth. She insisted that although the minimum wage had been set according to the Low Pay Commission’s recommendations, ongoing consultation with businesses was essential. On the prospect of further wage increases, she warned, “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.” She advocated for less government intervention, arguing that mandated increases were not fostering job creation; rather, jobs were disappearing under the current approach.
In a speech titled “Getting Britain Working,” Badenoch criticized Labour’s approach to welfare and business balance, suggesting it favored welfare recipients at the expense of workers. She recounted meeting a café owner named Ruth, who was emotionally overwhelmed by rising staff and tax costs. Badenoch said, “What last month’s budget shows us is that Labour has given up on working people like Ruth. 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 also announced plans for a comprehensive review of welfare eligibility criteria, particularly concerning conditions such as anxiety and ADHD, which she questioned as disabilities. Badenoch expressed concern that some individuals might be exploiting the system, describing social media influencers teaching people how to “game the system.”
Labour has pushed back against these criticisms, with a party spokesperson highlighting the increase in the benefits bill by £114 billion and nearly a million children experiencing poverty under Conservative governance. They asserted, “The Tories’ message on welfare is: we broke it, now put us back in charge,” and emphasized Labour’s commitment to reforming welfare and skills to reduce joblessness. Meanwhile, Liberal Democrat MP Layla Moran, chair of the health and care select committee, addressed the mental health implications of these debates, warning against dismissive attitudes toward mental illness. She said, “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,” and noted the risk of exacerbating anxiety and depression by reducing support, underscoring that employment alone is not a straightforward solution
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