Chancellor George Osborne has said he wants to see an above-inflation increase in the minimum wage.
He told the BBC the "economy can now afford" to raise the rate, currently set at £6.31 an hour for people over the age of 21.
The call comes after Labour claims that the economic upturn has not translated into improved living standards. But Mr Osborne said it was Labour's fault that they had fallen and he was aiming to make people better-off.
The value of the minimum wage, paid to an estimated 1.35 million people, has fallen in real terms since the financial crisis of 2008.
The current rate of inflation is 2%.Conservative Mr Osborne told BBC political editor Nick Robinson it would have to increase to £7 an hour by 2015 for its value to return to where it was before the economic downturn struck.
The rate is recommended the Low Pay Commission, which is overseen by Liberal Democrat Business Secretary Vince Cable.
He said the coalition, since coming to power in 2010, had "rescued the country from the brink of disaster and got us into a position where we can now see the minimum wage going up for people and, more broadly. I want living standards to go up for the whole country as we fix the economy."
'In touch'
Attacking Labour's record in power, he said: "Britain is poorer because of what happened to it in the great recession. People in the country are poorer because of what happened in the great recession."
Mr Osborne added: "I want to make sure we are all in it together, as part of the recovery, which is why I want to see above-inflation increases in the minimum wage, precisely because the British economy can now afford that."
The minimum wage rate for workers aged 18 to 20 is £5.03 an hour, while it is £3.72 for under-18s. Some Conservatives have urged the chancellor to call for a minimum wage increase to demonstrate the party's concern over living standards, particularly those of the working poor.
Nick Robinson said the announcement was likely to trigger an argument within the coalition with Liberal Democrats accusing the Conservatives of stealing their policy ideas. The Conservatives opposed the creation of the national minimum wage in 1999.
Mr Osborne said: "The Conservative Party in the 1990s was on the wrong side of the argument. The Conservative Party has changed. It's a modern Conservative Party in touch with the country."
He added that the government was planning another "big increase" in the amount of money people can earn before paying income tax and defended his plans to remove a further £12bn from the welfare budget.
bbc.co.uk
The call comes after Labour claims that the economic upturn has not translated into improved living standards. But Mr Osborne said it was Labour's fault that they had fallen and he was aiming to make people better-off.
The value of the minimum wage, paid to an estimated 1.35 million people, has fallen in real terms since the financial crisis of 2008.
The current rate of inflation is 2%.Conservative Mr Osborne told BBC political editor Nick Robinson it would have to increase to £7 an hour by 2015 for its value to return to where it was before the economic downturn struck.
The rate is recommended the Low Pay Commission, which is overseen by Liberal Democrat Business Secretary Vince Cable.
He said the coalition, since coming to power in 2010, had "rescued the country from the brink of disaster and got us into a position where we can now see the minimum wage going up for people and, more broadly. I want living standards to go up for the whole country as we fix the economy."
'In touch'
Attacking Labour's record in power, he said: "Britain is poorer because of what happened to it in the great recession. People in the country are poorer because of what happened in the great recession."
Mr Osborne added: "I want to make sure we are all in it together, as part of the recovery, which is why I want to see above-inflation increases in the minimum wage, precisely because the British economy can now afford that."
The minimum wage rate for workers aged 18 to 20 is £5.03 an hour, while it is £3.72 for under-18s. Some Conservatives have urged the chancellor to call for a minimum wage increase to demonstrate the party's concern over living standards, particularly those of the working poor.
Nick Robinson said the announcement was likely to trigger an argument within the coalition with Liberal Democrats accusing the Conservatives of stealing their policy ideas. The Conservatives opposed the creation of the national minimum wage in 1999.
Mr Osborne said: "The Conservative Party in the 1990s was on the wrong side of the argument. The Conservative Party has changed. It's a modern Conservative Party in touch with the country."
He added that the government was planning another "big increase" in the amount of money people can earn before paying income tax and defended his plans to remove a further £12bn from the welfare budget.
bbc.co.uk
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