September 22 2014.

Responding to Ed Miliband’s announcement that under a Labour government the minimum wage would rise to £8.00 (from £6.50) by 2020, John Longworth, Director General of the British Chambers of Commerce said:

“There is no doubt that the widening pay gap and a lack of social mobility is detrimental to the UK economy. As the economy continues to improve, businesses agree that the minimum wage must rise. In recent polling, sixty percent of Chamber members recommended an increase in line with current inflation, and fourteen percent favoured an above-inflation increase.

“However, businesses are in favour of an evidence based approach to the minimum wage rather than political parties using it to gain support from voters. The government should not intervene in such matters, unless there is market failure. A range of existing mechanisms, such as the Low Pay Commission and Living Wage Commission, are already in place to determine the optimal resolution for workers, businesses and long term economic growth.

“Politicians should instead focus on implementing policies to raise productivity and improve skills in the workplace – which are the keys to higher wages for all in the future.”