CBI claims minimum wage should not be increased until 2006

The CBI has told the Low Pay Commission (LPC) that business is ready to accept a minimum wage of a little over £5 an hour, but not until 2006.

Digby Jones, CBI director general, said the LPC should consider changes to the minimum wage when the impact of the £4.85 hourly rate introduced on 1 October 2004 had been more thoroughly felt and understood.

Jones said the minimum wage had been a success, and business wanted it to stay that way. 

“Caution has been the secret of that success, but the recent second big rise was a risk,” he said. “Because it is not yet clear whether the latest rise has been successful, we need to take extreme care from here, even if there is an election looming with union pressure for more than £5 an hour.”

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This contrasts sharply with trade unions, which are calling for the minimum wage to be increased to £6.50 per hour.

Dave Prentis, general secretary of Unison, said: “Big business scaremongering and self-interest continues to undermine the minimum wage’s potential to eradicate poverty and get workers off benefits.”