Autumn Statement 2016: National Living Wage to rise for workers

Chancellor Philip Hammond arriving in Downing Street. Photo: Stefan Rousseau/PA Wire

Chancellor Philip Hammond arriving in Downing Street. Photo: Stefan Rousseau/PA Wire - Credit: PA

A proposal to increase wages for low paid workers has been welcomed cautiously by employers.

Chancellor of the Exchequer Philip Hammond revealed in his first Autumn Statement a 4pc rise in the minimum wage for over-25s - known as the National Living Wage - from £7.20 to £7.50 an hour.

The change is expected to be introduced from April next year and provide £500 a year for full-time workers.

Care home owner prepared for 'trying times'

Lindsey Wood, owner of Crown Rest Home in Little Dunham, near Swaffham, said: 'The National Living Wage is good. Everybody should be able to pay their staff a wage they can live on.'

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But despite her business being in a strong position, compared to other care homes, she added it would be a 'trying time' over the next five years because of accumulative staff and running costs.

'I know Norfolk County Council do not have further funding for the care industry and that is going to have a significant impact on our business across the future,' she added.

Ms Wood employs between 30-40 staff who earn between £7.20-£10 an hour and care for 18 residents.

They have recently all enrolled onto the government's automatic pension scheme, which creates additional business costs.

The new living wage would cost her £40,000 a year.

Ms Wood added she would have to increase fees for residents to cover the increased staff pay.

She believed the care and hospitality industries, prevalent in Norfolk, would be hit hard by the national living wage changes.

The care home owner warned it was not only lower paid staff who would get the pay increase, but higher earners.

New National Living Wage should be paid on a 'voluntary' basis

Salena Dawson, regional chair of the Federation of Small Businesses in East Anglia which covers 6,000 businesses, said: 'A lot of our members already pay the National Living Wage.'

She added the rise should not be forced on businesses.

The business leader said firms should have the option to increase living wage payments by 30p an hour.

Ms Dawson believed the chancellor's proposal could 'cause hardship' on those industries.

'It is going to affect all sizes of businesses.'

She added that although small businesses could adapt to changes, alterations to staff payments could prevent them from investing in future developments or taking on staff.