However, the Labour government elected in 1997 has taken the view that the UK should sign the Social Chapter. The Chapter arose because the members of the EU were concerned that increased competition within the single market would put downward pressure on wages and working conditions, thereby worsening living standards. Countries therefore reached and agreement that workers should have certain basic minimum rights, such as fair and reasonable rewards, minimum wage and access to training. .
The introduction of the minimum wage is still probably the most controversial part of the Social Chapter. There is no doubt that its introduction has been a success, with little employment cost or inflationary cost. This has prompted many to back a significant rise in the minimum rate. After all, if it has not hurt inflation or jobs by now and it has not significantly increased businesses' costs, why should it in the future? But there are reasons why the national minimum wage has yet to damage the competitiveness of UK businesses. It is argued that the current level of £3.70 benefits relatively few people. This, in turn, has minimised the knock-on impact on jobs and inflation. Analysis done in the mid-1990s suggested that a minimum wage of £4.50, which some see as a likely EU-wide rate would have a much bigger impact on prices and jobs. The rise would affect small business in particular by rising their costs. Therefore, although a success so far, there should be an alternative to a minimum wage. If the minimum wage is raised to a level at which it is jeopardising job creation, this cannot be good for society as a whole. Benefits are one way in which the government can top up income, although Labour has tended to fear that these would create a culture of dependency on the state. .
Statistics suggest that the chief cause of low income in the UK is unemployment. Unemployment has always been an issue of mutual concern of both the government and the businesses.