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Businesses warn Labour over ‘tit-for-tat’ minimum wage hikes | Politics News

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Businesses have warned Labour that “competing in a tit-for-tat” over the minimum wage could damage jobs, as Jeremy Corbyn is due to announce a wage hike for young workers.

Mr Corbyn will announce plans to extend the party’s £10 minimum wage policy to 16 and 17-year-olds during a speech in Birmingham today.

The proposal would be “nothing less than life-changing” for young workers and could see them earn an extra £2,500 per year, he will say.

Currently, workers under the age of 18 are paid a minimum wage of £4.35 an hour, compared to £8.21 for those over 25.

The government reviews the minimum wage rates each year, under the advice of the independent Low Pay Commission.

Business leaders have accused the Labour leader of using the minimum wage as a “political football” and say the changes could result in a loss of jobs for teenage workers.

A spokesperson for the Federation of Small Businesses said: “We must eradicate low pay. But politicians from all parties should not simply be competing in a tit-for-tat as to who can offer the most people the biggest hikes.

Some teenagers have an unrealistic view of what they will earn
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Workers under 18 are currently paid a minimum wage of £4.35 an hour

“Our research shows that the average small business has already seen £60,000 of increased annual business costs due to public policy changes since 2011.”

They added: “One in seven small employers has a team member aged 16-17, providing crucial opportunities for young people all over the UK – and changes must not lead to them losing their jobs, or hours, to afford an eye-catching political promise.”

Mr Corbyn is expected to say in his speech that the current “youth rates” amount to discrimination and the work of young people should be “properly valued”.

He will say: “Equal pay for equal work is hardly a controversial idea, so why are we discriminating against young people?

“You don’t get a discount at the shops for being under 18. But if the person serving you on the other side of the counter is young, they could be on half the wage of their colleagues.

“It’s time to end this discrimination. Young people’s work should be properly valued, not exploited by employers to cut their wage bill. If they’re doing the job, pay them the wage – the real living wage.”

Matthew Percival, head of employment for the Confederation of British Industry (CBI), said the current “youth rates” help to reduce youth unemployment.

He warned: “The minimum wage is an important part of the UK labour market and must not be used as a political football.”

However, trade union GMB backed the move, with general secretary Tim Roache saying: “Spot on. Rent, your bus fare, the shopping – none of those things cost less because you’re under 18.

“How can it be right that two workers doing the same job earn different wages? It’s discrimination, plain and simple.

“This announcement from Labour sets that right.”

Labour MP and shadow chief secretary to the Treasury Peter Dowd also defended the policy, saying it aimed to create fairness.

He told BBC Radio 4’s Today Programme: “It’s not about saying this person has exactly the same experience, it’s about a minimum wage.

“It’s not a question of saying everybody gets £10… if people want to pay more, that’s a matter for them, but we have got to be equitable in this situation.

“At the end of the day, young people are entitled to be paid reasonable wages.”

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