Minimum wage rise could hurt small businesses
Business unions have spoken out against the proposed 2.5% rise in the national minimum wage for adults from October. On Thursday, ministers accepted a recommendation from the Low Pay Commission to raise the minimum wage in the UK by 15p an hour to £6.08 from October. The statutory wage for 18-20-year-olds will increase by 6p to £4.98 an hour. The rate for 16-17-year-olds will increase by 4p to £3.68 an hour and the rate for apprentices will increase by 10p to £2.60 an hour. While the increases will benefit around a million workers in the UK, unions have said it could harm business growth, particularly for small businesses such as independent salons and spas. Director general at the British Chambers of Commerce David Frost called the rise 'the wrong increase, at the wrong time', suggesting the government's priority should be on getting people back into the job market. He added: 'It's clear from speaking to businesses that a significant number are having to freeze wages in 2011. These changes will be a barrier to job creation, and ultimately economic recovery.' Director general of the British Retail Consortium, Stephen Robertson, said the rise was 'out of step with reality'. 'Employers have just been hit by an increase in National Insurance. Business rates have soared and retailers are still absorbing much of the increase in VAT. This increase in the minimum wage is yet another challenge,' he added. 'In the current climate it is the private sector which is driving the economic growth that will provide the jobs and tax revenues of the future. The minimum wage must reflect the economic realities businesses are dealing with.'