Labour leader Jeremy Corbyn's plan for a £10 minimum wage by 2020 questioned by business groups

 
Mark Sands
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Jeremy Corbyn Takes The Public Bus To Stockton
Corbyn will announce the plans today at Luton Football Club (Source: Getty)

Labour leader Jeremy Corbyn will today push for an hourly £10 minimum wage by 2020, launching the policy with a speech at Luton Football Club.

Under current forecasts, the national living wage will reach £8.75 over the same period.

"We know that where work pays, living standards rise and reliance on benefits falls," Corbyn is expected to say.

Labour says workers between 21 and 24 years old would be £4,586 better off if its plan came into effect in 2020, while minimum salaries for older workers would rise by £2,548.

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However, some of the UK’s largest business groups have already questioned the logic behind the increase.

Currently the living wage is set by government after advice from the Low Pay Commission. Labour says policy should be dictated by an independent Living Wage Review Body using the same methodology as the current voluntary living wage.

Federation of Small Business chairman Mike Cherry said increases risked “causing job losses or damaging job creation”.

The warning was echoed by the CBI, which said changes that fail to account for affordability could damage employment.

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British Chambers of Commerce director general Adam Marshall agreed: “Minimum wage increases should be set according to economic conditions and not political objectives.”

And Institute of Directors head of employment and skills policy Seamus Nevin added firms are already facing a raft of new bills.

The apprenticeship levy, the increased National Living Wage, gender pay reporting and a £1,000 skills charge per non-EU worker all came into force this month.

“At a time of great uncertainty, with Brexit weighing on recruitment decisions, increasing pay ahead of productivity may well lead to fewer jobs. Labour can help by developing policies that allow businesses to create more and better paying jobs, rather than simply mandating pay rises, which will normally make it harder to take on staff,” Nevin said.

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