In its response to the Low Pay Commission Consultation, the British Chambers of Commerce calls for a cautious approach to setting the National Living Wage (NLW) but one which will help low-paid workers deal with the consequences of inflation without pricing people out of jobs.
BCC has recommended an increase of 2.7% in the National Living Wage to compensate for the rise in inflation. The cautious approach is to reflect the costs and pressures faced by employers and increasing uncertainty in the economy.
With firms facing mounting pressures from existing policies such as pensions auto-enrolment, the Apprenticeship Levy, and the Immigration Skills Charge, many are struggling to absorb the rising cost of employment. The latest rise in the NLW in April 2017 increased wage bills further for businesses across a range of sectors, with the need to maintain wage differentials multiplying costs for employers.
Jane Gratton, Head of Business Environment and Skills Policy at the British Chambers of Commerce (BCC), said:
“The BCC has recommended an increase in the National Living Wage to help low paid workers manage inflationary pressures which are eroding their spending power.
“Setting the National Living Wage must be done cautiously, comprehensively taking into account economic circumstances, so that people are not priced out of jobs. The Government’s current policy was set before the EU referendum and so does not reflect the uncertainty caused by Brexit.
“Businesses are already facing high costs when it comes to employing staff – including the Apprenticeship Levy, pensions auto-enrolment and skills charges. The rise in the National Living Wage in April this year, brought a further increase in wage bills for business across a wide range of sectors, with the need to retain wage differentials multiplying their costs further.”