Wages beginning to move

Guido as usual overstates the case, but it was clear that the depression of average wages could not continue as confidence returned to the economy, employment rose and unemployment fell. Ed Miliband's tactic of switching his attack to a "cost of living crisis", rather than the unequal benefits cuts, seems about to backfire. I sometimes wonder if there is a Conservative plant in Ed Miliband's office, handing the Labour leader such defective weapons as the prediction of a triple-dip recession (which never happened), abolition of the benefits cap (one of the coalition's most popular policies) and the flood of benefit claimants from eastern Europe (cue picture of half-empty Victoria Coach Station on New Year's Day).

What the opposition (and I include Liberal Democrats in this particular case) should be concentrating on in my opinion is the uneven way in which pay is rising and will rise. Certain skills are at a premium, which will be affected only slightly by immigrants from new EU accession countries. Unskilled work is another matter and I would see immigrants keeping the wage floor down at the national minimum level. Thus there will be a stratification of skilled workers and professionals doing very nicely thank you, and the rest. The calculation probably is that the former are likely to vote and the latter have probably already given up on politicians. It may be Realpolitik, but it is not right.

Some things can be done straight away. Minimum wage legislation should be enforced; too many rogue employers are ignoring it. The cost of employing extra enforcement staff will be partly offset by an increase in the tax take. The penalties could be increased, as party president Tim Farron has advocated.

But we need to go further. Not only should the personal tax allowance be raised to the current level of the minimum wage, in line with LibDem party policy, but the minimum wage level itself needs to be recalibrated. It cannot be right that, for instance, among the users of food-banks are people who actually have jobs.