Call us on 0844 324 5840

NEWS

The Living Wage Budget

Living Wage | HR Solutions

This week Chancellor George Osborne unveiled the first completely Conservative budget since 1996, which he used to propose drastic rises to the minimum wage.

 

The new national living wage budget initiative, originally proposed by the Labour Party in the run up to the election, will see the minimum wage increase to £7.20 in April 2016 for over-25s. By 2020 that will rise to £9.00 per hour. Osborn predicted that the increase would affect 6m workers.


“This will be a Budget for working people. A Budget that sets out a plan for Britain for the next five years to keep moving us from a low wage, high tax, high welfare economy; to the higher wage, lower tax, lower welfare country we intend to create.”

 

Osborn said that his promise to lower corporation tax to 18% by 2020 should help secure industry support for the wage increase. Meanwhile he also announced £17 billion in cuts to the welfare budget, with the aim of getting as many people into work as possible.

The Office of Budget Responsibility predicted that the minimum wage increase would lead to a loss of 60,000 jobs across the country as small businesses in particular look set to struggle to pay salaries. However, Osborne countered that these losses were in the context of the predicted creation of a further 1m jobs.


“I am offering economic security to the country. I am offering businesses lower taxes but I am saying we have to be more productive, have higher wages and better skills.”

 

Critics of the budget have suggested that a one-size fits all minimum wage is not appropriate given that the cost of living is much higher in London and the South than the rest of the country. The latest living wage is set at £9.15 for London and £7.85 for the rest of the country, figures which, in no small part thanks to the cuts to welfare benefits, are sure to rise by the time the new minimum wage comes in next April.

This budget will cause a drastic rebalancing of the books for many small and medium businesses as they assess the impact of a higher wage bill. For people in low paid employment, who will be 13% better off by 2020, the surprise is a welcome one.

HR Solutions are experts when it comes to managing employment law issues. Call us on 0844 324 5840 or contact us online to find out how we can help.

SHARE THIS:

Instagram

GET IN TOUCH

Got questions? Looking for advice?

RELATED RESOURCES

Explore our comprehensive library of related resources to gain valuable insights, expert tips, and helpful tools for optimising your HR practices.

01
Employment and the 2017 General Election
6 June 2017
02
Recruiter email accusing jobseeker of lying on CV sent to him by mistake
24 May 2017
03
McDonald’s UK zero-hours workers could switch to fixed contracts
19 May 2017

Strategic HR thinking whitepaper

Our latest HR whitepaper offers an in-depth analysis and strategic framework aimed at transforming Human Resources into a pivotal element of business success in the rapidly evolving corporate environment of 2024.

PARTNER REGISTRATION

Register your details below and we will contact you regarding how HR Solutions can support your organisation.

MAKE A GENERAL ENQUIRY

We’re here to assist you with any questions or enquiries you might have. Simply fill out the form below, and our dedicated team will get back to you.

REQUEST A PROPOSAL FROM US

We’re here to assist you with any questions or enquiries you might have. Simply fill out the form below, and our dedicated team will get back to you.

BOOK YOUR PLACE

Please complete the form and one of our team will call you back to discuss your query/booking.

Request your free trial

Register your details below and we will contact you about your 30 day free trial of the HR Knowledge Base.

REGISTRATION FORM

Register your details below and we will contact you about access to the HR Knowledge Base.  As part of your approved industry membership organisation you can get access to the HR Knowledge Base, created by Business HR Solutions, which is the go-to resource for thousands of business owners and managers across the UK.

2023/2024 SME BUSINESS SURVEY

Our latest 2023/24 SME Business Survey sheds light on the intricate dynamics shaping the SME sector and unveils critical insights that can guide businesses toward sustainable success.

IF YOU WISH TO PURCHASE HR ADVICE LINE TIME, PLEASE COMPLETE THE FORM BELOW.

HR Solutions are here to help. We offer a standard hourly rate package for ad hoc HR advice which means you can pay for what you need, whenever you need it, and then quickly get advice. Our highly experienced advisors are on hand to provide you with practical employment advice to help you manage your workforce.  You can purchase HR Advice Line time now, and the time purchased will be valid for 12 months.