CBI responds to increase in National Minimum Wage and National Living Wage

John Foster, CBI Chief Policy and Campaigns Officer, said:

“Politicians and businesses are united in wanting to ensure people have access to well paid, fulfilling work. The only sustainable path to achieving that aim – not only for those earning the minimum wage, but right across the economy – is higher growth and productivity.

“The National Living Wage has proven to be a valuable tool for protecting the incomes of the poorest in society and has supported equality in the lower half of the income distribution. But with productivity stagnant, businesses will have to accommodate this increase against a challenging economic backdrop and growing pressure on their bottom line. That pressure will make it increasingly difficult for firms to find the headroom to invest in the tech and innovation needed to boost productivity and deliver sustainable increases in wages.

“Reviving business investment is the key to unlocking productivity gains and driving sustainable wage rises across the economy. Achieving this shared goal requires business and government to work together to find a long-term solution to inactivity and the wider labour costs undermining competitiveness.”