Government should honour increase in minimum wage, says FSB

The Low Pay Commission has recommended to the Government that the adult rate of the National Minimum Wage, which applies to workers aged 21 and over, should rise by 3 per cent to £6.70 from October 2015.

Responding to this recommendation, Gordon Millward, Regional Chairman of the Federation of Small Businesses (FSB), said:

“While a three per cent increase to the headline minimum wage rate is marginally more than the FSB recommended in its evidence to the Low Pay Commission, most businesses should be able to afford this rise.

“Firms operating in low margin sectors such as wholesale and social care will be the most likely to struggle with the increase, though it is clear that the LPC has taken into account the benign inflationary environment when making its recommendation. That should provide extra scope to raise wages across the economy, though wider pay growth will also require improvements in productivity in order to be sustainable.

“It is important that the Government now honours the independence of the LPC by accepting this recommendation, which was arrived at following consultations with both employers and workers representatives and represents a reasonable balance.”