Chancellor George Osborne is hoping to raise the National Minimum Wage above the rate of inflation (NMW), according to comments made to the BBC yesterday.
The current NMW stands at £6.31 for over 21s, but the Chancellor is expected to call for a rise to £7 per hour to help bring wages in line with rising living costs.
The chancellor’s comments come after a four-fold increase in fines was implemented for businesses that fail to pay minimum wage.
The suggestion has been put forward to the Low Pay Commission, which will have the final say on whether wages are set to rise and by how much. A decision is expected to be made in a few weeks and any changes are likely to be put into place in October this year.
However, despite the positive aspect for employees, there are fears that a rise in NMW could negatively affect businesses. Alexander Jackman, head of policy at the Forum of Private Business, said “The Forum of Private Business has been opposed to increases in the National Minimum Wage until the UK has seen a sustained recovery and businesses are in a position to afford it. We have not reached that point.”