The CBI has warned that an increase in the minimum wage could increase labour costs and hit employment.
It stressed the need for caution when it published its evidence to the Low Pay Commission, the independent body that will review the rate by next July and recommend changes in October.
The CBI advised the commission to continue using the minimum wage as a floor below which wages should not fall rather than as an escalator for forcing up pay levels.
John Cridland, the CBI’s deputy director general, commented, “The minimum wage has worked well overall. We should prevent it withering on the vine by raising the rate as circumstances allow.
“The Low Pay Commission is best placed to weight the evidence and make an appropriate judgement – it is not the CBI’s job to specify the rate. But consultation with our members shows a figure in excess of £4 an hour could be extremely damaging to business.”
By Ben Willmott