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Minimum wage plan is â??totally ludicrous'

Controversial proposals by the government to recoup its losses on the 10p rate of income tax by raising the minimum wage have been condemned by businesses. Chancellor Alistair Darling and enterprise secretary John Hutton asked the Low Pay Commission to consider the changes as part of a plan to compensate low-paid workers for their decision to scrap the 10p rate of tax.

But the Forum of Private Business (FPB) said the proposals are likely to compel smaller businesses to put up their prices, potentially leading to higher levels of unemployment. The organisation said the minimum wage should be set following ‘sound economic calculations’, rather than to achieve short-term political aims. It added that employers should not be expected to make up shortfalls in the government’s policies on personal taxation.

Phil Orford, the FPB’s chief executive, said: “Any notion that the UK’s businesses should be required to pick up the tab for the Government’s hashed personal taxation policies is totally ludicrous.

“This is not even a stealth tax; it is a blatant attempt to retain revenues generated by the removal of the 10p personal taxation rate by forcing businesses to bear the financial burden through increases in the minimum wage. We cannot quite believe that it is being put forward as a serious solution.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .