Barry Sheerman – 2016 Parliamentary Question to the Department for Business, Innovation and Skills

The below Parliamentary question was asked by Barry Sheerman on 2016-04-08.

To ask the Secretary of State for Business, Innovation and Skills, what steps his Department is taking to ensure that workers are not financially worse off as a result of the recent increase in the minimum wage.

Nick Boles

On current Office for Budget Responsibility forecasts a full-time National Minimum Wage (NMW) worker will earn over £4,200 more by 2020 from the National Living Wage (NLW) in cash terms. 2.9m low wage workers are expected to benefit directly, and up to 6m in total could see their pay rise as a result of a ripple effect up the earnings distribution.

What is allowed to be deducted from a salary is tightly controlled. The Government enforces this robustly, and is bolstering its resources to bear down on non-compliance through further increasing HMRC’s NMW/NLW enforcement budget for 2016/17.

Employers can choose to set and change the overall, wider remuneration level as long as they are paying at or above the NMW / NLW minima, but they will also need to consider whether that package, overall, remains competitive to retain and develop the people and talent they need for their businesses.

The Government has also taken measures to support businesses. First, from April 2016, the Government has increased the employment allowance from £2,000 to £3,000 from April 2016. We are also cutting corporation tax from 20% to 17% by the end of the Parliament, which will benefit over a million firms of all sizes and give the UK the lowest rate of corporation tax in the G20. The cuts since 2010 will be worth almost £15bn a year to businesses by the end of Parliament. Furthermore, the Government is cutting the burden of business rates by £6.7 billion over the next 5 years.