British companies have provided backing to the new national Living Wagse but are urging the government to take care over future minimum wage rises.The Institute of Directors, in response to the Low Pay Commission consultation closing today, said it cautiously welcomed the living wage which will see the hourly rate for over-25s hit 7.20 next April. In many ways, the UK has a good jobs story to tell. Unemployment is low and vacancies are at a near record high. But one of the biggest disappointments of the recovery has been slow pay growth for workers. The chancellor has decided that now is the time to reward employees for their patience during the recovery and has offered businesses a lower tax deal in return,” said Seamus Nevin, head of employment and skills policy at the IoD. IoD members already recognise the benefits of letting their staff share in their success. Nine out of ten pay the full Living Wage, as set by the Living Wage Foundation, so they will mostly be able to accept the chancellors bargain. “Nevertheless, government cannot ignore the potential jobs cost, especially in the hospitality, retail and care sectors. The minimum wage must not become a political competition to see which party can offer the most, irrespective of what the economy and employers can afford. “The independent Low Pay Commission has done a good job in balancing the rate against inflation, economic growth and the effect rises would have on small businesses and people entering the jobs market. The chancellor must resist the temptation to turn the new national Living Wage into an instrument of political strategy.
Read more on the Living Wage:
- Cautious thumbs up given to increase of minimum wage
- Working families experiencing the biggest squeeze on living standards since Victorian times
- Premier League chief Richard Scudamore refuses to be drawn into Living Wage debate for football
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