Member Article

Small businesses call for balance as Cable eyes further minimum wage growth

The National Minimum Wage rises to £6.31 per hour this morning, as small businesses say the Government must “strike a balance” between consumer spending and economic competitiveness.

A rise of 12p on the adult rate is accompanied by a 5p rise on the ‘development rate’ for workers aged between 18-20, now £5.03.

The rise, a recommendation of the Low Pay Commission (LPC), was first announced in April, and the Federation of Small Businesses (FSB) say economic confidence has grown since then.

Business Secretary Vince Cable said he will instruct the LPC to investigate how National Minimum Wage could rise in the future, by more than current conditions allow.

The Government has been talking tough on employers who fail to pay the National Minimum Wage and from today “public naming and shaming” of those businesses will commence.

Mike Cherry, national policy chairman at the FSB, said: “While most businesses believe the increase will have no significant impact on their bottom line, a significant minority of firms will find it difficult to absorb the rise - particularly those run on very fine margins in sectors such as retail and hospitality.

“In matters such as this, the Government must strike a balance between boosting consumer spending and economic growth, while ensuring the UK’s small businesses stay competitive in a period of economic recovery. As part of this task, it is critical that Government redoubles its efforts to substantially reduce the cost of doing business.

“We urge policymakers to continue to tackle the issues holding back enterprise and small business growth today, such as business rates and late payment by big companies to their suppliers.”

Frances O’Grady, TUC general secretary, added: “As the recovery takes hold we will need to see far bigger increases to the minimum wage to ensure that ordinary people and not just the super rich benefit from economic growth. This will need more than any one off pre-election boost - we will need sustained stronger rises if the real value of the minimum wage is to be restored.

“In addition, ministers must honour their promise to crack down on minimum wage cheats. Those who break the law must be prosecuted, publicly named and shamed and handed far heftier fines than at present.”

This was posted in Bdaily's Members' News section by Tom Keighley .