Fix pay floor for years, call to Osborne

CHANCELLOR George Osborne is being urged to shake up the system for setting the minimum wage and to announce its level for five years instead of just 12 months.

The Federation of Small Businesses says longer-term planning in this month’s Budget would help to eliminate uncertainty and allow companies to make informed decisions on investment and recruitment.

The Low Pay Commission advises the Government on changes to the minimum wage each year, but does not indicate what the rate should be beyond that point.

The Federation is calling for the minimum wage to be set out over a five-year period in line with the Office for Budget Responsibility’s economic projections, with the new rate coming into effect at the start of the financial year in April rather than in October.

John Allan, national chairman for the Federation, said: ‘Businesses need greater certainty of the future value of the minimum wage and that is why we are calling for a new, longer-term approach.’

Meanwhile, Stephen Herring, head of taxation at the Institute of Directors, is urging Osborne to freeze business rates until the postponed re-rating in 2017 and is also calling for corporation tax and national insurance contributions to be simplified.

He said it is unfair that a large number of businesses which will secure lower business rates after 2017 will be expected to meet higher business rates until that date.

The IoD estimates that freezing business rates until 2017 would cost £1billion.

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