Last week the Government introduced a £7.20 an hour National Living Wage for workers aged 25 and over, and increased the tax free allowance to £11,000. This is great news for all workers.
People in Telford work hard, often on low wages; the introduction of the Living Wage and the increase in tax free allowance will make a real difference, leaving more money in workers’ pockets.
The 38p increase in minimum wage gives 1.3 million workers a pay rise – the biggest jump in minimum wages in any advanced economy for a decade. The National Living Wage will rise each year and by 2020 it should reach £9.00 an hour and the tax free allowance will be £12,500; millions of workers will be better off.
This Government was elected to deliver a higher wage, lower welfare, lower tax economy. Boosting pay, ensuring more people have the security of a decent wage, making sure people are better off in work: this the heart of the Government’s long term economic plan.
It is important to recognise the impact this policy will have on those employers who rely on low paid staff. Whilst larger companies will be able to absorb the costs of increased pay for employees, the Government has recognised that for smaller and medium sized companies increased labour costs could prove burdensome. To counter this, the March budget made cuts to business rates and corporation tax, which have been welcomed by employers.
Many Adult Social Care services rely on lower paid staff. To cover increased social care costs, Councils have been given the option of increasing Council tax by 2%. Telford and Wrekin Council has taken this option increasing Council tax by 2% to fund social care. Care workers deserve to be paid the Living Wage for the important work they do.
Higher wages will make employers think carefully about increasing productivity and employing staff. However, I expect the Apprenticeship levy, which will become effective in April 2017, to help fund entry level jobs.
I am proud to have voted for the introduction of the National Living Wage and I welcome its introduction. People should be rewarded for their hard work and the taxpayer should not be subsidising low wages – which keeps pay low.
I believe Telford as a whole will be better off as a result of the National Living Wage.