Summer Budget 2015: Round-up

Mr Bowles said: “Smart Solutions welcomes any improvements the government can make to living wage of our workers, the government of course needs to be cautious that wage rises are affordable and don’t turn into job cuts”.

The LPC’s remit in relation to the NMW, which will now only apply to those under 25, will remain unchanged.

However, consumer spending power could be hit by wide-ranging welfare cuts.

“The CBI supports a higher skilled, higher wage economy, but legislating for a living wage does not reflect businesses’ ability to pay”.

The dramatic intervention saw Mr Osborne effectively steal Labour’s clothes as the champion of the low-paid.

“The LPC as an independent body conducts extensive research into the annual report it submits to government setting out its recommended level of national minimum wage, the last figure of which was £6.70 per hour”, he said.

“What the Chancellor did yesterday was for a political gimmick increased the minimum wage, but at the same time eroded the other complimentary support to that minimum wage, such as tax credits”.

The Office for Budget Responsibility points out that “many workers on the national living wage will be households’ second earners” – so about half the extra money going into pockets will go to households which are already in the top 50% in terms of income.

“What about the two million under-25s who are not covered?” The Treasury dismissed the warnings.

The forecast for economic growth was reduced to a 2.4 percent rise in gross domestic product this year, down from a prior estimate of 2.5 percent, after a stronger-than-expected 3.0 percent expansion in 2014.

So George Osborne’s “compulsory living wage” is actually lower than the living wage everyone has been talking about until now.

Mr Kelly said the Budget as a whole – with the rise in the threshold for inheritance tax to £1 million and the further corporation tax for big business – would make the United Kingdom a more unequal society. “However, without knowing the detail of the fundamental reform of business rates the gains from today’s budget for retailers and their customers are not clear”, the BRC’s Dickinson said in a statement following the budget speech on Wednesday.

“The difficulty with the Chancellor’s position though is that he is not bringing in those increases in wages in time for the pulling of the rug from underneath hundreds of thousands of working people with the introduction of what is effectively a work penalty into the tax system”, he said. “This is taking a big gamble that the labour market can absorb year-on-year increases of an average of 6%”.

Miss Winstanley (right) runs a clothing shop called TCS in Teddington, Middlesex, and recently opened a second store in Bath.

“I’m not saying there shouldn’t be a working wage, I just think that, probably, it’s a little bit too high”.

“But this issue of the minimum wage will have caught businesses by surprise”. However, the changes will be aimed at increasing tax on businesses which incorporate and then pay dividends rather than salary to the owners, which has historically often been a cheaper method of extracting profits from a company. He said: “It is a welcome move but we will have to see how it pans out”.

“Cuts to benefits will do nothing to improve many people’s situation in the poorest areas, if they start falling into debt on rent etc that will mean the burden will fall on local councils to cope”.