SIR: Small firms in Bolton and Bury should not be alarmed about the Government's commitment to introduce a national minimum wage, as it will bring benefits to their business.
It will establish a basic wage floor for everyone and stop the downward spiral of firms competing on cost through low wages. Low pay means low quality, low output and low morale. In anyone's book, that's no way to run a business.
A minimum wage means that companies will compete on quality and not just cost. Firms will want to train and invest in their workers, so as to boost quality and
output.
These benefits to business are why companies in all sectors of industry accept the principle of the national minimum wage, as recent business surveys have shown. It is part of a package of measures to contribute to the competitiveness of the British economy and will help all firms, large and small.
Of course the level at which the minimum wage is to be set will be important, and will need to reflect prevailing economic circumstances so as not to have an adverse effect on jobs.
That is why we have established the independent Low Pay Commission whose membership is drawn from business, unions and academia, to advise the Government on the level at which the minimum wage might be set.
The Government will introduce a single national rate as regional rates raise a number of serious difficulties such as effects at the boundaries of regions, coping with employees who work in more than one region and having to fix regional rates of in-work benefits. However, regional concerns will be taken into account when the Commission holds its regional hearings.
The Commission will want to find out people's views on how the minimum wage should be introduced, and I hope businesses in Bolton and Bury will contribute their ideas on how to make it a success.
This way Government, businesses and employees will work together to ensure that the national minimum wage will help everyone in business to succeed.
?Ian McCartney.
Minister of State,
London.
?
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