The British government led by Boris Johnson on Tuesday announced a substantial increase in the minimum wage from April, following his big election victory carried off thanks to the significant gains in deprived areas in favour of Brexit.
The minimum wage for employees over the age of 25 will increase by 6.2% on April 1 to 8.72 pounds an hour, the Treasury indicated.
This constitutes “the biggest increase in value” since the creation of the minimum wage – earned by 2.8 million Britons – in its current form in 2016, Johnson, quoted in a press release, insisted.
The announcement is causing employers some concern.
The announced increase constitutes four times the annual rate of inflation for November (1.5%).
It comes at a time when purchasing power has been put under pressure by the accelerating price increases after the Brexit referendum in 2016 that impacted on the pound. This trend has moderated in recent months.
The news comes less than three weeks after the parliamentary elections in the United Kingdom that ended with the biggest Tory majority in parliament since Margaret Thatcher’s in the 1980s.
Johnson’s party was delighted at gaining seats held for decades by Labour MPs in the centre and north of England, depressed regions that were predominantly working class in the past with a majority in favour of Brexit.
Anxious to have the public forget the austerity policies imposed by his party for 10 years and faced with a very left-wing Labour party, the Prime Minister promised during his campaign to spend more on the health and police services, invest in infrastructures and take action to help the most deprived.
Tuesday’s announcement was criticised by the British Chambers of Commerce, their co-General Manager Hannah Essex expressing her concern regarding a measure that will put pressure on company finances during “a period of great economic uncertainty” and calling on the government to offset the cost.