Companies with fewer than 10 employees should be given a ‘holiday’ from the minimum wage, according to Conservative London Assembly Member Tony Arbour.
Mr Arbour will use a meeting of the Assembly’s Economy Committee to call for London’s small and micro-businesses to be given a short minimum wage
exemption of up to six months in an effort to boost employment and growth.
He says the minimum wage “can act as an inhibitor for small and micro businesses and prevent them from taking the necessary risks to succeed.”
The national minimum wage will rise by 1.8 per cent in October, 50 per cent higher than average wage growth. For adults aged 21 and over the minimum wage will rise from £6.19 per hour to £6.31.
Business leaders including the Federation of Small Businesses, the IEA and the British Chambers of Commerce have questioned the size of the increase.
Speaking ahead of today’s meeting, Mr Arbour said: “A time of high unemployment, is not the right time to be pricing out those at the margins of the labour market.
“I think it is important to now consider the idea of a minimum wage holiday for micro businesses and start up companies who employ fewer than 10 members of staff. This will encourage these small enterprises to take on new workers.”