Chambers of Commerce rails against minimum wage rise

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Derbyshire, Nottinghamshire and Leicestershire Chambers of Commerce (DNCC) has railed against chancellor George Osbourne’s call for the minimum wage to be raised to £7.

A spokesman for DNCC said the rise would effect small firms disproportionately and the extra cost could force then to make job cuts.

Chris Hobson, head of Information and Representation at DNCC, said: “For most businesses, their staff are their most important asset and paying a fair wage is an important part of their overall recruitment policy.

“In a survey of members midway through last year, looking back over the 12 previous months, more than half had awarded a general pay rise and this was during a time when the economy was really struggling.

“However, there is a bigger discussion to be had about the cost of doing business generally, of which the debate about National Minimum Wage is just one component.”

Mr Hobson said ministers should remember that as well as their wage bill, businesses faced a raft of other costs to employ people, including iniquitous and punitive business rates, national insurance contributions and auto-enrolment pension contributions.

He added: “There is also a danger that the impact of such an increase would fall disproportionately on firms with only small staff numbers – the very companies which have helped drive the recent growth in our local economies and, in the main, those least able to manage the additional cost at this stage of the recovery.

“A business with ten staff on minimum wage, for example, would have to cut numbers by one member of staff to retain the same wage bill if the National Minimum Wage rose to £7, as is being reported.

“As the economic recovery is finally starting to take root, it’s absolutely vital that nothing throws it off course.

“Government should therefore focus its efforts on bringing down the cost of doing business in the UK, ensuring there is a long-term plan in place to underpin economic growth and prosperity and making sure the education and training system becomes more responsive to the needs of employers.”