Mil­lions to ben­e­fit from pay in­crease

Manchester Evening News - - NATIONAL -

AL­MOST three mil­lion work­ers are to ben­e­fit from the “big­gest ever” in­crease in the na­tional liv­ing wage, min­is­ters have said.

How­ever, em­ploy­ers’ or­gan­i­sa­tions warned that the above-in­fla­tion in­crease – due to take ef­fect in April – would “pile fur­ther pres­sure” on busi­nesses’ cash­flows.

Ac­cord­ing to data from the in­de­pen­dent Low Pay Com­mis­sion, the 51p in­crease in the na­tional liv­ing wage to £8.72 from £8.21 is the largest since the rate was in­tro­duced in April 2016.

The pre­vi­ous big­gest in­crease was in April 2016, when the rate rose by 50p from £6.70 to £7.20 per hour.

The na­tional liv­ing wage is the name for the min­i­mum wage level payable to adults over the age of 25. Those un­der 25 and ap­pren­tices are paid at a lower rate.

Younger work­ers who re­ceive the min­i­mum wage will see their pay boosted by be­tween 4.6% and 6.5% de­pend­ing on their age, with 21 to 24-year-olds see­ing a 50p in­crease from £7.70 to £8.20 an hour.

Han­nah Es­sex, co-ex­ec­u­tive direc­tor at the Bri­tish Cham­bers of Com­merce, said an above-in­fla­tion pay in­crease came at a dif­fi­cult time for busi­nesses.

She said: “Busi­nesses want to pay their staff a good wage. But many have strug­gled with in­creased costs in a time of great eco­nomic un­cer­tainty.

“Rais­ing wage floors by more than dou­ble the rate of in­fla­tion will pile fur­ther pres­sure on cash­flow and eat into train­ing and in­vest­ment bud­gets.”

Craig Beau­mont, Fed­er­a­tion of Small Busi­nesses direc­tor of ex­ter­nal af­fairs, urged min­is­ters to im­ple­ment promised pro-busi­ness mea­sures be­fore the in­crease takes ef­fect.

He said: “This Gov­ern­ment has promised a re­duc­tion in the jobs tax through an in­crease in the employment al­lowance.

“With a na­tional liv­ing wage in­crease of this size now on the hori­zon, it’s crit­i­cal that it de­liv­ers swiftly.”

Prime Min­is­ter Boris John­son, how­ever, hailed the “big­gest ever cash boost to the na­tional liv­ing wage” – which was first an­nounced by Chan­cel­lor Sa­jid Javid in Septem­ber.

Mr John­son said: “Hard work should al­ways pay, but, for too long, peo­ple haven’t seen the pay rises they de­serve.”

Mr Javid said the wages of the low­est­paid full-time work­ers had in­creased by £3,600 since the na­tional liv­ing wage was in­tro­duced in 2010.

He added: “But we want to do more to level up and tackle the cost of liv­ing, which is why the na­tional liv­ing wage will in­crease fur­ther to £10.50 by 2024 on cur­rent fore­casts.”

The Gov­ern­ment said nearly three mil­lion work­ers were set to ben­e­fit from the in­creases and it was “on track” to meet its cur­rent tar­get for the NLW to reach 60% of me­dian earn­ings by 2020.

The new rate starts on April 1, 2020 and will re­sult in an in­crease of £930 over the year for a full-time worker on the na­tional liv­ing wage.

Boris John­son has hailed the wage rise

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