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CBI condemns Labour plan for 23% minimum wage hike

22 Sep 14 A new policy pledge by the Labour Party to raise the national minimum wage has come under fire from the bosses’ lobby group, the Confederation of British Industry (CBI).

Labour has said that it will raise the minimum wage from £6.50 to £8 an hour by 2020 if it wins next year’s general election.

But the CBI said that the move would “put serious strain on businesses” and said that the minimum wage should remain a matter for the Low Pay Commission, not politicians.

For those aged over 21, the current minimum wage rises from £6.31 to £6.50 next month, having risen from £5.93 since 2010. That means it has gone up nearly 10% over the past four years. Labour is proposing a further 23% rise over five years.

CBI deputy director-general Katja Hall said:  "The minimum wage is set at the highest rate it can be without putting job creation at risk at the moment. It has risen more than average earnings throughout the recession and recovery and is set to increase by more than 3% from October.

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 "The Low Pay Commission is one of the biggest success stories of the last Labour government and makes its judgements based on considerable independent expertise. The LPC is not for politicians to play politics with.

"The national minimum wage has enjoyed broad business support and a move to a politicised US-style system is not in the interest of companies or workers.

"Raising wages in this way would put serious strain on businesses, particularly hard-pressed smaller firms with tight margins, which would end up employing fewer people. Instead, politicians should address how people move on in their careers, through training and better skills, helping them move to higher paying roles over time."

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