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Can I start today with a mea culpa.

I used to be an economist. Worse, for a while I was an economic forecaster.

My only defense is that I was young and naive. I think the main thing I learned as an economist is to know just how little we know.

And while my past attempts to forecast the economy might make us laugh, there is another aspect of the economists’ trade that makes me cringe, and it’s about what we we’re here to talk about today.

I want to make an argument about why low pay matters, and what we can do about it.

My central argument is this:

First, that tackling low pay is both a moral and an economic imperative.

Second, that the modern Conservative Party are, must be, and must be seen to be, the Party of the low paid.

And third, that the policies of the centre right are the best to get us there.

Taking each in turn. First, that increasing low pay is both a moral and economic mission.

There are some on the right who argue, rightly, that Britain needs to be more competitive, but then argue, wrongly, that lower unit labour costs are the route to get there.

But that fundamentally misunderstands that these so-called unit labour costs are not a means to an end. For one person’s unit labour costs are another’s wages. Low labour costs mean low pay. And pay is prosperity and is a goal in itself. Higher pay does not make a country less competitive: it makes a country more prosperous.

Now there are those on the left who accept the importance of higher pay, but reject competitiveness as a route to it. They argue that higher taxes or borrowing are the route to higher pay. But this ignores the crucial question of where the pay – the prosperity comes from. We have no God-given right to pay and prosperity higher than most of the rest of the world. We have to earn it, not borrow it from our children.

So increasing low pay is morally and economically right.

Second, it’s vital the modern Conservative Party is and is seen to be the party of the low paid.

That’s what it means to be a modern Conservative.

Of course, a modern Conservative Party needs to be comfortable with modern Britain. We must constantly reassert our strong and heartfelt commitment to public services, like passionate support of the NHS free at the point of delivery, and raising standards in education for all.

And of course we recognise Britain’s social and cultural changes.

Now, today, the Tories are the energetic, forward looking party, excited by new technology, optimistic about the future: where once we’d campaigned against phone masts, now we were pushing for superfast broadband.

But being comfortable with modern Britain isn’t enough.  We must be on the side of the low paid.  I am delighted that this is one of the main themes emerging from Bright Blue’s forthcoming book, Tory modernisation 2.0.

This means being fair in the deficit reduction: that we are all in this together. The biggest burden rightly falls on those most able to bear it – the top ten per cent bear the greatest burden, so inequality actually fell sharply in 2010/11 to a level last seen under the last Conservative Government.

It’s why raising the tax threshold is such an important policy: so if you’re on the minimum wage your income tax bill has been cut in half.

And where we directly control pay, in Government, the public sector pay freeze excluded those earning less than £21,000. Our public sector pension reforms benefitted the lowest paid, and the highest paid took the greatest hit.

But it’s also about tackling low pay across the economy – outside areas directly under Government control.

That’s the third point: that it’s the policies of the centre right that are best placed to deliver for the low paid. What you could call conservative means for progressive ends.

Being a modern conservative party means ruthlessly supporting each and every person to reach their personal best. And here the modern, inclusive, social policies and economic policies are intertwined.

Britain cannot compete unless every person reaches their potential. And the best way to do that is by radical education reform.

Britain cannot deal with our deficit without tackling the social injustice of youth unemployment. That means radical welfare reform, supporting those who work hard and want to get on in life.

Measures like Traineeships announced today, and high quality Apprenticeships to give all young people the skills they need to get a job, and then a better paid job.

The only way to compete in the global race is to tackle low pay by tackling low productivity, to ensure globalisation is a race to the top, not a race to the bottom. That’s not just an economic challenge but a vitally important social challenge too.

Supporting the low paid in this way means tackling immigration. While challenging for some businesses, is right for the low paid whose wages were undercut.

It means building housing by reforming planning, so people can afford to buy a home.

It means passionately supporting the minimum wage, and indeed strengthening it, as we did when we introduced the Apprenticeship minimum wage.

This is a vital economic mission, but it’s a social mission too.

My argument has always been that capitalism is stronger when the link between effort and reward is stronger, at every level of the income scale. That’s why in the past I’ve railed against rewards for failure for the highest paid.

Now we must deliver rewards for success for the lowest paid.

Tories are in touch with modern Britain. Supporting those who want to work hard and get on in life: that is modern Conservatism in action.

Matthew Hancock MP is Minister for Skills