From today, those aged 25 or over will be paid a minimum of £7.20 an hour – a 50p pay rise that George Osborne says will benefit 2.5 million employees.
Ministers are seeking a political dividend from the move. Skills minister Nick Boles has claimed it is "one of the biggest increases in the legal minimum wage that any government has done in the western world in living memory".
It is set to cost employers an extra £700m in additional salaries – or about 0.1% of the total wage bill – but this morning there were fears that some would look to make savings elsewhere to offset the additional cost.
B&Q, which employs 27,000 people, is threatening to sack staff unless they sign up to a new employment contract that could cost workers more than £1,000 in benefits, including cuts to Sunday and bank holiday pay.
And the makers of Ginsters pasties, Samworth Brothers, which employs 8,500 staff, is planning to cut Sunday and bank holiday pay and remove paid tea breaks altogether.
This morning experts expressed fears for the future of social care, with the labour-intensive industry having little scope to pass on extra costs incurred to consumers. Sir George Bain, former chairman of the Low Pay Commission, told the Today show:
“There are areas where this is going to be problematic. The rates in social care are set by local government and they don’t set it to meet the national minimum wage, or the new national living wage, and that makes it impossible to meet the standard of care required. Employers have tried to get around it by through employment practices - some of which are legal and some illegal.”
And the move to national living wage was also criticised today from within the cabinet, with culture secretary John Whittingdale warning the move would lead to increased immigration unless the UK left the EU. He said:
“Wages in the UK will be so much higher than the rest of Europe that this will fuel even higher levels of immigration, putting great strain on our schools and hospitals. If we vote Leave and take back control, we will be able to ensure that workers who are currently in the UK will get the full benefit of the rise in the living wage.”
George Osborne announced the move to a national living wage in his summer budget last year, shortly after the general election. He plans to increase the new minimum hourly rate for those aged 25 and over to £9 by 2020. Those aged under 25 remain on national minimum wage.
@Tom_Smithard
Photo: Kirsty Wrigglesworth / AP / Press Association Images
Culled from Total Politics.
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