Originally written by Timothy Adler on Small Business
The Institute of Directors says that the Government’s pledge to increase the minimum wage to £10.50 an hour by 2025 is divorced from reality.
Tek Parikh, chief economist at the Institute of Directors, told this morning’s Today radio show that the Chancellors’ minimum wage pledge “will certainly concern smaller businesses and retailers”.
Chancellor Sajid Javid announced plans for a compulsory minimum wage to be the highest in the world, extending the rate to all workers aged 21.
The move will affect four million low-paid workers.
See also: Protecting employees from overworking and minimum wage underpayment
Last week, the Labour Party pledged a £10 an hour minimum wage compared with £8.21 an hour currently for workers aged 25 and over.
However, business groups including the Federation of Small Businesses (FSB) and the British Chambers of Commerce (BCC) also raised their eyebrows at yesterday’s announcement.
Parikh said: “The announcement yesterday seems to be a bit unilateral and not in tandem with the reality that many businesses are currently facing.”
The IoD chief economist said that the Government should have consulted with business first, considering business conditions.
“The challenge for businesses now is that this announcement comes at a particularly difficult time for them. Costs