Jeremy Hunt has been urged to slash business tax amid a growing Tory-rebellion backed by former prime minister Liz Truss.
The Chancellor will use his speech at the Conservative Party conference in Manchester on Monday (October 2) to promise the national living wage will rise to at least ยฃ11 an hour from April.
It comes on the same day Ms Truss, Dame Priti Patel, Sir Jacob Rees-Mogg and Ranil Jayawardena are to appear at the Trafford Suite of the Midland Hotel in a meeting which aims to discuss how to supercharge Britain’s sluggish economic growth.
The former PM is leading a major revolt over the Government’s tax policy, joining 31 fellow Tory MPs to say they will not vote for any more tax rises.
Business owners have had a mixed reaction to Mr Hunt’s living wage announcement, with one urging the Chancellor to get back to what the Tories used to do – cutting business tax.
Samuel Mather-Holgate, an independent financial adviser at Swindon based Mather and Murray Financial, told Express.co.uk: “Hunt needs to focus on what the Conservatives used to do, namely cutting business taxes.”
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He added: “This will allow individual businesses to increase wages for staff as well as invest for growth when the country needs it most.
“The Government arenโt a price regulator and increasing burdens on business whilst taxes are already so high will significantly disincentive them to invest, grow and generate a higher tax return for the Treasury. Again, this is short-sighted from a Government void of ideas.”
Mr Mather-Holgate quipped: “Oh, how I miss Liz Truss.”
The Chancellor today linked the national living wage boost with renewed Government efforts to get people back into work.
He told broadcasters: “When it comes to the benefits system, we want to make work pay. And that is why today we are giving a pay rise to two million workers.
“That is a really big incentive for people to engage with the world of work, but we also have 300,000 people who have not been in work for a year, don’t have a disability, don’t have an illness.
“And we’re saying to them: you too need to do the right thing. We are making it worth your while and putting up the national living wage.”
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Barrister Tahina Akther, co-founder of Wildcat Law in London, said people are struggling, but so are many businesses, and the rise could spell lay offs.
She added: “Many businesses pay over the national living wage anyway just to retain and attract staff, where companies don’t it’s usually for a very good reason – they can’t afford to.
“The rise will come as a welcome relief to many who are stuck on wages tied to it, but not if it means redundancies because businesses can no longer afford those roles.”
Shirley Leader, director of Velvet & Rose in Petersfield, did not welcome the news. She told Express.co.uk: “As a womenswear boutique with ever increasing overheads, this news is not welcomed. We can understand the problems with the cost of living, however, we are already cutting back on what hours we can offer staff.
“Each year the minimum wage has increased significantly for us. The decreasing hours we offer has a direct impact on our local community. Perhaps the Government can look at other ways to help, such as reducing energy bills?”
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Arabella Harvey, whose company Raven Botanicals is based in Haddington, East Lothian, said her ethical skincare firm already pays a minimum ยฃ11 per hour.
She said: “We signed up to the Real Living Wage movement earlier this year and believe we get the best out of people when we pay them fairly.
“At a time when people are finding daily expenses a huge challenge, we hope raising the minimum wage will alleviate stress for workers and also enable increased spending with small businesses so that everyone benefits.”
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