This article is more than 6 years old

This article is more than 6 years old

The Liberal Democrats on Tuesday accused the Tories of "nicking" their ideas after Iain Duncan Smith joined forces with supporters of George Osborne to press for a noticeable increase in the national minimum wage.

Vince Cable said he hopes the low pay commission will introduce "significant rises" to the minimum wage as Lib Dem sources described the Conservatives as "latching" on to their fairness agenda.

The Lib Dems, whose leader Nick Clegg warned on Monday that Osborne is in danger of making a "monumental mistake" by pressing for welfare cuts of £12bn in the next parliament, turned on the Tories again amid signs of a Tory push for a dramatic rise in the minimum wage as a way of signalling that the party is keen to champion low-paid workers.

A Lib Dem source said: "This is the fourth or fifth thing the Tories have tried to nick from us – the raising of the income tax threshold, payday lending, the triple lock on pension and now this.

"Having tried to turn themselves into being more compassionate they went back to basics and now they are latching on to the fairness agenda."

The Lib Dems hit out as it became clear that Duncan Smith, who is clashing with the chancellor over his plans to impose £12bn cuts in the in-work welfare budget after the next election, has found common cause with skills minister Matt Hancock to push for a rise in the minimum wage.

Hancock, a former chief of staff to Osborne, is lining up with Downing Street policy board head Jo Johnson and the Cabinet Office minister and prime ministerial aide Oliver Letwin to make a historic break with the Tories' original opposition to the minimum wage in the late 1990s.

One Tory source said: "We need to raise the minimum wage as part of a major overhaul of the welfare system.

"Why should the state subsidise businesses through tax credits in a growing economy when companies should simply be paying their workers decent wages?"

Osborne is understood to be supportive of an increase in the minimum wage and may even try to steal the thunder of Cable, who urged the low pay commission last September to move towards restoring real terms rises in the minimum wage, in his budget in March.

The low pay commission is due to make a recommendation on the annual October rise in the minimum wage shortly before the budget.

The Tory support for a rise in the minimum wage was reported by the BBC Newsnight political editor Allegra Stratton in early September shortly before Cable announced in a Guardian interview that he would write to the low pay commission to press for it to rise more closely in line with inflation.

Ryan Shorthouse, the director of the Tory modernising Bright Blue thinktank, told the Guardian last month that Downing Street should focus on a "balanced, moderate message" – to include an increase in the minimum wage – rather than trying to "outdo Ukip" on immigration.

The strong Tory support for a minimum wage rise was highlighted by the Times columnist Rachel Sylvester on Tuesday.

She reported that such a move would meet what Cameron's former director of political strategy, Andrew Cooper, calls a "10,000 volt initiative".

Officials in Cable's department will send their final batch of evidence to the low pay commission within days. The commission will then hear from employers' organisations and the TUC.

In a surprise move, the CBI director-general John Cridland said in his New Year message that businesses must do more to lift wages of the low paid.

Cable would like to see, as the economy recovers, a gradual increase in the minimum wage to make up for lost ground in the five years since the economic crash.

The minimum wage has not increased in line with inflation since the crash, depressing wages for the low paid.

The business secretary strengthened his language on Tuesday evening to say he hopes the commission will set the minimum wage on a path to rise close to – if not actually in line with – the rate of inflation measured by the consumer prices index.

He said: "The national minimum wage strikes a key balance between protecting the low paid and making sure they can find work.

"But as the economy starts to recover, the benefits of growth must be shared fairly and equally by everyone.

"This is why last September I asked the independent low pay commission what economic conditions would be needed to allow for significant rises in the national minimum wage without damage to employment.

"Strengthening the national minimum wage needs to happen hand in hand with tough enforcement. Those who do not pay it can expect to feel the full force of the law.

"From this spring, we are hiking up penalties on rogue employers who do not play by the rules, as well as making it easier to name and shame employers who fail to pay their workers what they are due."

Gavin Kelly, the chief executive of the Resolution Foundation, who invited Hancock for a speech on the minimum wage, said: "There are serious Tories who are concerned about the plight of the low paid. But there will be some opposition to that too. There is a genuine debate."

Kelly added said he does not expect any dramatic moves by the low pay commission.

He said: "It is right that we are exploring how, over a number of years, we can recover that lost ground rather than simply sticking to the current rolling 12-month cycle of just looking at it in isolation each year at a time subject to the recovery continuing."