EVESHAM’S MP has warned the National Living Wage could have a negative effect on businesses and called on the Chancellor to monitor the impact of the rise.
From April anyone over the age of 25 will have to be paid at least £7.20 an hour, rising to £9 by 2020- a wage increase which has been backed by Nigel Huddleston.
But the Mid-Worcestershire MP has spoken with farmers, care homes, hoteliers and publicans from across the Vale.
While most support the national living wage, Mr Huddleston said they were concerned about the pressure it will put on their ability to hire local people.
He has since raised their concerns with George Osborne in a recent debate in the House of Commons where he urged the Chancellor to ‘carefully monitor the implementation of the national living wage’ and to make sure there won’t be any ‘unintended consequences.’
George Osborne responded by saying: “We will of course monitor the impact of all our policies on the economy and on particular sectors.
“That is one of the reasons why, alongside introducing the national living wage, we have introduced the new council tax supplement for the social care sector.”
The Government has brought in measures to try and ease the impact of the living wage on businesses with a 50 per cent increase to the Employment Allowance which will drastically cut their national insurance bills.
Speaking after the debate, Mr Huddleston said: “For too long those on low incomes were caught in a system where low earnings were taxed on the one hand, but given back in the form of various tax credits and allowances on the other.
“This is an inefficient way to support workers and taxpayers should not have to subsidise businesses that pay the lowest wages.
“I am glad bold action has been taken to introduce a National Minimum Wage while cutting their taxes so they keep more of the money they earn.
“But we must ensure that the living wage does not have a negative effect on the businesses which employ people and support our local economies.
“I will continue to speak to local employers and monitor the situation,” he added.