Business groups hit out at minimum wage rise

Government measures to increase the minimum wage will be fiercely resisted, business groups have told AccountingWEB.

The Low Pay Commission is reported to want to increase the minimum wage (currently £4.85 per hour) to £5.05 in October, and £5.30 in 2006.

A spokesman for the Federation of Small Business (FSB) told AccountingWEB that the FSB believed the wage hike to be engineered to win votes, and that timing of the announcement, so close to the general election, was suspect.

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Comments

Small business, small minds?

Anonymous | | Permalink

An increase of £8 per week in 2005 and £10 per week in 2006 for those on the lowest pay in the country. Can the FSB state precisely what they believe the minimum wage should be? Slashing bureaucracy and simplifying the tax code would bring more durable and tangible benefits to SMEs whose lobbyists should focus more on. Keeping workers on the lowest legal wage is a recipe for discontent, economic stagnation and employee turnover. PR statements complaining about the minimum wage may be perceived by employees as an attack on their standards of living. As an electoral ploy, it will probably not impress the lowest paid too much, as they have been priced out of the housing market completely, and also subject to stealth taxes and generally rising prices. What will work for New Labour is the perception that they are on the side of the low paid, something that becomes an issue only when employer groups attack the minimum wage and come across as miserly in media interviews.

richard.murphy's picture

Well said Liam

richard.murphy | | Permalink

I am astonished that anyone thinks it possible to build a successful business in the UK based on paying less than £5 an hour wages. Does anyone seriously expect someone to live on about £10,000 a year now?

Business should see its job as being to raise the stakes for all, not to crush some down. Clearly on this issue the FSB is seeking to pursue an old (and I would have hoped) long forgotten Marxist agenda.