Raising minimum wage won't solve 10p tax row

25 April 2008
Raising minimum wage won't solve 10p tax row

The Government has been slammed for proposing to raise the minimum wage to defuse the row over the scrapping of the 10p rate of income tax.

Chancellor Alastair Darling and Business and Enterprise Secretary John Hutton have asked the Low Pay Commission to consider changes to the minimum wage regime to compensate younger workers hit by the removal of the 10p rate.

But at its Annual General Meeting in London, the Association of Multiple Licensed Retailers (ALMR) said minimum wage rates must be based on firm economic evidence and "not short-term political fixes".

ALMR chief executive, Nick Bish, said: "The minimum wage regime for next year was set only last month, with the Government accepting the Low Pay Commission's recommendations. It would be ridiculous for this ‘done deal' to be reviewed so soon - and for political, rather than economic, reasons.

"The Government is already hitting Britain's pubs and bars with higher taxes, plus extra rules and regulations - with disastrous results. Pubs are already closing at a record rate.

"An extra minimum wage rise would maximise the number of pubs going out of business," he added.

Jon Taylor, head of employment at emw law, warned that any rise in the minimum wage to compensate those on low incomes will have to be "significant".

"It is a real shame that it may be employers that end up footing the bill for the Government's u-turn via yet another rise in the minimum wage," he said.

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By Daniel Thomas

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