Business raises concerns over national living wage

BUSINESS has pushed back on government’s plan to raise the national living wage to one of the highest levels in the developed world by 2020.

A group of 18 trade associations have written to the new Secretary of State for Business, Energy and Industrial Strategy (BEIS) Greg Clark, recommending the government slow of even scrap the 2020 target to increase the national living wage.

In the letter, the trade associations recommend the government restore the original powers of the Low Pay Commission to assess the impact of wage rates on business.  The letter also called on the government to create a new steering group to allow businesses to discuss the impact of the national living wage with government.

The national living wage was introduced last year by former chancellor George Osborne. The rate started at £7.20 an hour from April 2016 for all workers aged over 25 and will increase to £9 an hour by 2020.

The increase, which will give around 2.5 million people an average wage rise of £5,000 over five years, is offset by a 50% increase to the National Insurance employment allowance small companies to £3,000 from 2016.