Businesses 'disappointed' at NMW hike

Date: 14th May 2009

Businesses have expressed their disappointment at the government's decision to increase the rate of National Minimum Wage (NMW).

According to the British Chambers of Commerce (BCC), companies would have been better served by a freeze, but instead will face higher costs on their payroll.

The change, which will see the rate for employees aged 22 and over earn at least £5.80 per hour, will come into effect in October.

Director general of the BCC, David Frost, said: "We pressed for a freeze to the minimum wage because of the severity of the downturn and the daily loss of jobs."

Despite this, Mr Frost added that he was "pleased that the increase is only a modest one", which he said demonstrated that the government understood the pressures facing small firms.

Following the decision to increase the NMW, Business Secretary Lord Mandelson suggested it could create "a level playing field" British industry.