Chamber reaction to minimum wage increases

Posted on April 3rd, 2017

National Living Wage (NLW) and National Minimum Wage (NMW) both increased from 1 April.

NLW, for over-25s, has gone up 30p an hour from £7.20 to £7.50.

NMW for workers aged 21 to 24 has risen from £6.95 to £7.05 an hour, for 18- to 20-year-olds from £5.55 to £5.60 and for under-18s from £4 to £4.05.

The apprentice hourly rate has increased from £3.40 to £3.50 for under-19 or aged 19 or over and in the first year of their apprenticeship. Over-19s on a second or subsequent year of apprenticeship are entitled to the appropriate age-related minimum wage.

George Osborne, when Chancellor of the Exchequer, said NLW would rise to £9 an hour by 2020.

Scott Knowles, Chief Executive at East Midlands Chamber, said: “Most of our members already recognise that their greatest asset is their staff and pay above minimum wages.

“But there are sectors such as catering, caring, hospitality, retail and leisure for instance, where minimum wages are the norm and they are struggling to meet rising wage bills.

“While supporting the need to pay living wages, the Chamber urges Government to take into account that employers have additional costs to pay for staff, including employers’ National Insurance Contributions, pensions, sick and maternity pay and holiday cover and even a relatively small increase in minimum wages can create cash flow problems for companies running on tight margins.

“It is vital that Government finds ways of mitigating these added costs, particularly at a time when inflation is rising and will add to the pressure to increase wages. One way would be to carry out the review we have been calling for of the ‘broken’ business rates system.

“Business is the driver of the economy, the creator of jobs and wealth, but it can’t keep picking up the cost of the Government’s initiatives at the risk of its own survival, no matter how well intentioned those initiatives might be.”