Theresa May has issued a cautious defence of the national living wage after businesses called on the government to moderate increases

 
Mark Sands
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Conservative Party Autumn Conference 2015 - Day 3
May is not enjoying a quiet recess (Source: Getty)

Downing Street has issued a cautious response to business demands for a delay in the implementation of the national living wage.


Business groups including the Federation of Small Businesses (FSB) wrote to business and energy secretary Greg Clark to call for targets for the programme to be pushed back.

The national living wage is aimed at making sure that over 25s can earn at least 60 per cent of median earnings by 2020.

The exact rate is set by the Low Pay Commission, which will move away from a previous remit that explicitly required it to consider the impact on jobs relating to minimum wage increases.

Read More: Consumers facing hiked prices after 100 days of the national living wage


Prime Minister Theresa May has made improving conditions for Britain's poor a central pillar of her premiership, but Downing Street has stopped short of issuing a full-throated backing for the living wage programme, a key legacy of former chancellor George Osborne.

“The Prime Minister has been clear that we have to build an economy that works for everyone where people are able to share in the benefits of economic growth,” a spokesman for Theresa May has said.

“Making sure that people can earn a decent days wage is a big part of that.”

The FSB, the British Hospitality Association, the National Farmers Union, the Federation of Wholesale Distributors and the British Beer and Pub Association were part of a 16 strong group that wrote to Clark in late July.

In their letter, they stated that member companies were revising growth, investment and employment plans ahead of predicted wage increases.

"We recommend the Government restores the Low Pay Commission's powers to objectively assess the impact of wage increases on businesses, and recommend future living wage and minimum wage rates with regard to their impact on employment opportunities." the group said.

"While we are concerned about the principle of the Commission having to work to any politically set target, we want to engage constructively with the Commission over how to go about reaching this target. We are concerned that focussing on a fixed figure based on projections four years into the future risks a front loading of National Living Wage increases, which would adversely impact investment decisions made this year and next.

"We strongly recommend the Commission takes an approach to reaching their targets on a year- by-year basis, and which, now more than ever, avoids front loading National Living Wage rates."

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