UK living wage

A Tory candidate has been filmed saying some people with learning difficulties "don't understand about money".

Sally-Ann Hart, who is the Conservative candidate for Hastings and Rye, was appearing at a hustings on Thursday.

She was defending sharing an article that said disabled people could be paid less than the minimum wage.

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The National Living Wage will rise to £10.50 an hour by 2025, the government has said. So, how high could the lowest wages actually go?

When it reaches £10.50, it will be two-thirds of the median (middle) wage. It is likely to affect one in four employees and will be extended to all employees aged 21 and over by the mid 2020s.

But is there a limit to increasing the lowest wages and what are the benefits and risks of paying more?

Read this analysis by Jonathan Cribb from the Institute for Fiscal Studies

Tej Parikh, chief economist at the Institute of Directors, has had his say on the Living Wage proposal. He said:

Quote Message: All sides must be wary of playing a bidding war with minimum and living wages. Raising the thresholds is a delicate balancing act, as too high a bar risks forcing firms to reduce staff numbers amid elevated costs, particularly with Brexit disruption on the cards. It’s crucial that the approach is evidence-based, which is why the Low Pay Commission was set up in the first place.

All sides must be wary of playing a bidding war with minimum and living wages. Raising the thresholds is a delicate balancing act, as too high a bar risks forcing firms to reduce staff numbers amid elevated costs, particularly with Brexit disruption on the cards. It’s crucial that the approach is evidence-based, which is why the Low Pay Commission was set up in the first place.

Reaction is coming in to Sajid Javid's National Living Wage pledge.

Helen Dickinson of the British Retail Consortium told the BBC:

Quote Message: There is nothing wrong with targeting higher wages. But the government needs to think about the cumulative impact various different measures will have on retailers. Their recent deposit return policy to reduce waste will add cost for retailers and there was disappointingly no mention of business rate reform or freeze. All of this adds to the cumulative pressures you have seen take their toll on the retail sector.

There is nothing wrong with targeting higher wages. But the government needs to think about the cumulative impact various different measures will have on retailers. Their recent deposit return policy to reduce waste will add cost for retailers and there was disappointingly no mention of business rate reform or freeze. All of this adds to the cumulative pressures you have seen take their toll on the retail sector.

Adam Marshall, director general of the British Chambers of Commerce, added:

Quote Message: The government’s ambition is laudable but the path to doing so must be on the basis of clear economic evidence, with ample time for businesses to adjust to any changes. Companies already face significant cumulative employment costs, including pensions auto-enrollment, Immigration Skills Charge and the Apprenticeship Levy, so government must take action to alleviate the heavy cost-burden facing firms, or risk denting productivity and competitiveness.

The government’s ambition is laudable but the path to doing so must be on the basis of clear economic evidence, with ample time for businesses to adjust to any changes. Companies already face significant cumulative employment costs, including pensions auto-enrollment, Immigration Skills Charge and the Apprenticeship Levy, so government must take action to alleviate the heavy cost-burden facing firms, or risk denting productivity and competitiveness.