Changes are being made to the National Minimum Wage.
• The first stage is a rise to £6.70 per hour, in October 2015
• The second is the introduction of a new ‘National Living Wage’ for over-25s, at £7.20 ph from next April
• Thirdly, the ambition is to raise this ‘National Living Wage’ to £9.00 by 2020.
British Chambers of Commerce plans to provide evidence to the Low Pay Commission and is keen to receive business comments especially on the two questions below.
In March 2015, the government committed to increasing the National Minimum Wage by 3% to £6.70 from October 2015.
1. What will be the effect of this 3% increase to the NMW? What will be the effect of the 3.3% to £5.30 increase to the Youth Development Rate (18-20 year olds), the 2.2% to £3.87 increase to the 16-17 Year Old Rate, and the 20.9% to £2.80 increase to the Apprentice Rate? (all due to take effect in October 2015)
Previous measures announced aimed at reducing business costs include:
– cut Corporation Tax to 19% (2017) then 18% (2020)
– cut employer NICs by £1,000 by raising Employment Allowance to £3,000 (2016)
– abolish under-21 NICs for under 21s (April 2015)
– abolish under-25 apprentice NICs (2016)
2. Will the impact of higher NMW be offset by changes to other costs, like those listed above? What will the impact be on business of the £7.20 ‘25+’ level (2016), e.g. employment, hours, earnings/pay, progression, contract type, profits?
If you have any views you wish to share on this, please email PolicyRepresentation@wnychamber.co.uk by Tues 22 Sep.