'Rise in minimum wage would cost jobs'

A rise in minimum wage to £6.10 would cost thousands of jobs, the British Chambers of Commerce has warned.

The Trade Unions Congress (TUC) recently suggested to the Low Pay Commission that the economy had room to accommodate a rise to £6.10 per hour from the current level of £5.73.

The British Chamber of Commerce argues that there should not be an increase. "We're not opposed to the minimum wage going up when employment is high and the economy is doing well, but when jobs are being lost daily and a recession is in full swing, it makes no sense to increase it," said director general David Frost.

"Most businesses are prioritising survival. A rise in minimum wage would not help firms hold on to staff but would simply add to unemployment."

However, payroll experts PAYEpeople predicted the rise would more likely be to £5.95 rather than £6.10.

"Our previous experience suggests that most businesses cannot continue to support the kinds of increases seen over the past few years," said PAYEpeople boss Allan Pearson. "Our data suggests the minimum wage should increase by a further 3.8% to a more manageable £5.95 per hour. I also believe that the adult rate will start to apply to workers from the age of 21, currently this is 22."