Craft Business

The Forum of Private Business (FPB) is calling on the Government to rethink plans which would force employers to pay for the loss of the 10p rate of income tax by increasing the National Minimum Wage. The chancellor of the exchequer, the Rt Hon Alistair Darling MP, and enterprise secretary John Hutton, have asked the Low Pay Commission (LPC) to consider changes to the minimum wage in order to compensate lower-paid workers, who could struggle following the removal of the ten pence rate.

However the FPB argues that employers should not be expected to make up shortfalls in the Government’s policies on personal taxation. It believes the move is likely to compel smaller businesses to put up their prices, and could lead to greater unemployment. "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,” says the FPB’s chief executive, Phil Orford. “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."