The annual announcement of the new Living Wage rates (£8.25 nationally; £9.40 in London) on Monday follows a busy few months of debate on so-called “living wages”. The Chancellor kicked things off at the summer budget by announcing a new minimum wage rate for over 25s; to the chagrin of many Living Wage campaigners he called it the “National Living Wage” even though, at £7.20 per hour, it will be much lower than the Living Wage, which is independently determined by the Living Wage Foundation.
The head of the Confederation of British Industry (CBI), John Cridland, has entered the debate calling Osborne’s minimum wage hike a “gamble”. He joins several business leaders, including the chief executive of Next, who have raised concerns about the new higher minimum wage. They claim that the new hourly rate may be too expensive for some businesses, forcing them to make unsavoury choices, such as reducing the number of jobs available, or passing the costs through to consumers in the form of higher prices. Work by the Office for Budget Responsibility suggests there is substance to these objections: it estimates that 60,000 jobs could be lost by 2020 as a direct result of the policy.
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