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| CBI urges caution on minimum wage | CBI urges caution on minimum wage |
| (40 minutes later) | |
| Business group the CBI has called on the government to slow the rate of minimum wage increases. | Business group the CBI has called on the government to slow the rate of minimum wage increases. |
| The legal wage minimum rises by 25p to £5.35 an hour on 1 October but a big hike in 2007 would hurt business and boost the black economy, the CBI said. | |
| However the TUC, which represents many workers, says that businesses can afford more wage rises. | However the TUC, which represents many workers, says that businesses can afford more wage rises. |
| The positive economic outlook means a minimum wage of £6 by 2008 should be "easily affordable", it said. | The positive economic outlook means a minimum wage of £6 by 2008 should be "easily affordable", it said. |
| Energy drain | Energy drain |
| In a submission made to the government's Low Pay Commission, the CBI said that the minimum wage would have risen by 27% since 2002 - faster than average wage growth of 18%. | In a submission made to the government's Low Pay Commission, the CBI said that the minimum wage would have risen by 27% since 2002 - faster than average wage growth of 18%. |
| Rising energy costs, lower 2007 growth forecasts and the cost of employment regulation meant firms could not cope with further heavy minimum wage rises, it added. | Rising energy costs, lower 2007 growth forecasts and the cost of employment regulation meant firms could not cope with further heavy minimum wage rises, it added. |
| Continuing heavy annual increases are simply not sustainable Susan AndersonDirector of HR Policy, CBI | Continuing heavy annual increases are simply not sustainable Susan AndersonDirector of HR Policy, CBI |
| And it said that some sectors, including hospitality and food producers, had been forced to cut staff and reduce benefits in order to afford the wages while remaining competitive. | And it said that some sectors, including hospitality and food producers, had been forced to cut staff and reduce benefits in order to afford the wages while remaining competitive. |
| Others were being under-cut by employers paying cash-in-hand on the black market, circumventing the law. | Others were being under-cut by employers paying cash-in-hand on the black market, circumventing the law. |
| "The minimum wage has improved living standards for many workers, but continuing heavy annual increases are simply not sustainable," CBI director of HR policy Susan Anderson said. | "The minimum wage has improved living standards for many workers, but continuing heavy annual increases are simply not sustainable," CBI director of HR policy Susan Anderson said. |
| "We hope that [in 2007] the rise will be more modest so that employers can consolidate costs to date and restore the vital differentials in pay that have been flattened by the minimum wage which encourage people to train and take on extra responsibilities in the workplace." | "We hope that [in 2007] the rise will be more modest so that employers can consolidate costs to date and restore the vital differentials in pay that have been flattened by the minimum wage which encourage people to train and take on extra responsibilities in the workplace." |
| 'Tougher enforcement' | 'Tougher enforcement' |
| The TUC said it wanted the CBI to back its calls for the minimum wage to be more rigorously enforced by HM Revenues and Customs. | The TUC said it wanted the CBI to back its calls for the minimum wage to be more rigorously enforced by HM Revenues and Customs. |
| It also wants a crackdown on firms that victimise staff who claim the minimum wage, and for more regulation of agencies that abuse workers rights. | It also wants a crackdown on firms that victimise staff who claim the minimum wage, and for more regulation of agencies that abuse workers rights. |
| "The CBI is right to attack bad bosses in the cash-in-hand economy who undercut good employers by paying as little as £1 per hour, but they need to go further," said TUC General Secretary Brendan Barber. | "The CBI is right to attack bad bosses in the cash-in-hand economy who undercut good employers by paying as little as £1 per hour, but they need to go further," said TUC General Secretary Brendan Barber. |
| "I look forward to employer groups supporting our calls for tougher enforcement of the minimum wage including the naming and shaming and even imprisonment of rogue employers." | "I look forward to employer groups supporting our calls for tougher enforcement of the minimum wage including the naming and shaming and even imprisonment of rogue employers." |
| Earlier this month the British Retail Consortium (BRC) claimed that the introduction of the minimum wage had led to 78,000 job losses on the High Street. | Earlier this month the British Retail Consortium (BRC) claimed that the introduction of the minimum wage had led to 78,000 job losses on the High Street. |
| It predicted more would result from October's the increase in the wage | It predicted more would result from October's the increase in the wage |
| In its submission to the Low Pay Commission, the BRC urged the government to delay the latest rise. | In its submission to the Low Pay Commission, the BRC urged the government to delay the latest rise. |