Following the Treasury announcement of a 6.6% increase in the minimum wage, Jane Gratton, Head of People Policy at the BCC, said:
“With rising energy costs, higher raw material prices, high levels of debt as a result of the pandemic and tax increases due, many firms are facing a cashflow squeeze. So while businesses support the minimum wage, the size of this increase – with less than six months’ notice - will cause significant concern, especially with so many smaller firms already struggling.
“There is a limit to how much more firms can continue to absorb rising costs before they have to raise their own prices adding to inflationary pressures. It is therefore vital that companies are not faced with any further up-front costs for the remainder of this Parliament.
“The best way to sustainably increase wages is to help firms boost their skills and productivity.
“If businesses are to lead our economic recovery, they desperately need room to breathe, rebuild their finances and have the confidence and capacity to invest, including in the training and development of their people.”