Critics proved wrong on pay laws, says DTI

DTI minister Alan Johnson has defended the introduction of the minimum wage,
saying critics who said it would be a burden to business and cost a million
jobs had been proved wrong.

Addressing company directors at the Institute of Directors last week, the minister
for competitiveness said 800,000 more people are in jobs than ever before and
that the cost of complying with the minimum wage was less than £20m a year –
0.0001 per cent of turnover.

He said businesses were benefiting through improving the working lives of
their employees.

"A key characteristic of our top performing companies is a culture that
promotes partnership, fairness and trust. Decent standards and security at work
make for a better motivated, versatile and stable workforce," he said.

He added that the regulations had been implemented carefully and
"adroitly".

"They are a major innovation in this country and we will not threaten
their survival by placing unnecessary burdens on business."

Ruth Lea, head of the Institute of Directors’ policy unit, said that despite
not having a major impact, some employers "at the margins" such as
care homes and charities had suffered.

She said the timing of its introduction had been fortunate because the
economy was buoyant, but if there was an economic downturn or the rate was
significantly increased, the impact would be wider.

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