Has The National Living Wage Created ‘Unsustainable’ Cost Rises?
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The British Chambers of Commerce has released its annual workforce survey which shows that the National Living Wage, Apprenticeship Levy and Pensions Auto-enrolment could lead to reduced opportunities for investment and wage growth due to increased costs for businesses.
The BCC’s annual workforce survey interviewed some 1,400 businesses, citing these introductions as having increased business costs. A ﬁfth of businesses complained that the apprenticeship levy was forcing up costs, while eight per cent said the same about the immigration skills charge. Finally, three quarters of companies report an increase in costs as a result of pensions auto-enrolment.
The Oﬃce for Budget Responsibility forecasts an increase in the national living wage to £8.75 by 2020, 38 per cent of businesses said they would put up the prices of their products or services – and 25 per cent said it would reduce pay growth. The changes to employment legislation were designed to help improve wages and prospects for workers, but the BCC is concerned that high employment costs will have a negative impact on employees.
The trade body wants the government to ensure no new upfront costs or taxes are imposed on businesses for the remainder of this Parliament. Jane Gratton, Head of Business Environment and Skills at BCC, said businesses are “under increasing pressure” from the burden of employment costs and she said this would inﬂuence the choices they make and outcomes for employees.