Government must strike right balance on wage growth - Chamber

The government must strike the right balance between boosting wages and avoiding placing firms under further financial pressure, business leaders said today.  

It comes after Chancellor Jeremy Hunt announced yesterday that he would increase the national living wage.

Speaking at the Conservative Party Conference yesterday, Mr Hunt said he would accept the Low Pay Commission’s recommendation to raise the baseline to at least £11 an hour from April 2024.

He said it would equate to a pay rise two-million workers.

Business leaders in Greater Birmingham said the Chancellor must strike the right balance to avoid burdening businesses who are already struggling to contain wage inflation on top of other rising costs.  

Raj Kandola (pictured), director of external affairs at Greater Birmingham Chambers of Commerce, said: “While it’s important that wages rise proportionately to maintain living standards and ensure people can cope with the cost-of-living crisis, there is a limit to how much businesses can absorb.

“The government needs to be pragmatic in setting future wage rate rises - business conditions remain among the hardest in generations due to unprecedented energy costs, significant skills shortages, rising interest rates and wage inflation.

“The right balance must be struck between boosting pay and ensuring the very survival of some firms is not put in jeopardy.”