CBI President: Living Wage Will Hit Profits and Jobs
Financial Times reports that according to CBI president, Paul Drechsler, ministers have underestimated the “dramatic impact” of the national living wage on companies’ profitability and hiring. Chancellor George Osborne says company bosses have been supportive of the plan to increase the rate to £9 by 2020, but Mr Drechsler says several chief executives have warned the change will have a big impact on their profits.
This follows the FSB warned that the prospect of a rise in the minimum wage was affecting recruitment and growth prospects.
Mr Drechsler also expressed doubts about the efficacy of the government’s apprenticeship levy, which will force all large employers to pay a percentage tax on their payroll to fund Britain’s apprenticeship system. Meanwhile, Whitbread – which runs the Premier Inn and Costa coffee chains – says it will be forced to raise some prices at its hotels, restaurants and coffee shops in response to the national living wage.