Small business group warns over effects of wage hike
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The Federation of Small Businesses (FSB) has urged caution on chancellor Sajid Javid’s plans to significantly increase the national minimum wage, saying many of its members would prefer ten years to implement the rise rather than five.
Michael Mealing, employment policy chief at the FSB, also warned that for low-pay areas such as care and retail, “the advent of a very much higher national living wage, will make the problem in those sectors significantly worse”.
At his Conservative conference speech in Manchester yesterday, Javid announced that the “national living wage” would rise to £10.50 by 2024, around two-thirds of median earnings, and be extended to all above 21.
Speaking at an event in the City organised by cloud software accountancy firm Free Agent, Mealing said: “Small businesses are agile and can adjust to change but they’re also fragile and need the maximum amount of time so that they can plan and change very much their cost base.”
He said he thought five years was reasonable, but added: “I think many small businesses would consider ten years would have been better.”
Small business owner Joanna Iwanska, who was also speaking at the event, said she “would be very happy to see from the government’s side maybe some kind of grants and funds… not to put all the costs on us”.
Both Mealing and Iwanska said they welcomed the broad aim of the government’s policy to increase people’s wages.
(Image credit: Getty)