minimum wage changes next year

[tony84]

Minimum wage to rise to £11.44 per hour

The new rate will apply to those aged 21 and over for the first time, the chancellor says.

www.bbc.co.uk

This does not affect me as all of my staff are on more than the new minimum wage anyway so no sour grapes or anything here...
The increase in minimum wage is great for those on it. I also agree with the fact that 21 year olds should be on the same as a 24 year old if doing the same work but bringing that change in now seems a bit rough on small business owners.

Thats a heavy hit after a rough couple of years and a rough couple of years on the horizon.

For those of you who it will affect, what will it mean? You carry on or are redundancies/other cut backs on the cards?

 

[Newchodge]

Minimum wage to rise to £11.44 per hour

The new rate will apply to those aged 21 and over for the first time, the chancellor says.

www.bbc.co.uk

This does not affect me as all of my staff are on more than the new minimum wage anyway so no sour grapes or anything here...
The increase in minimum wage is great for those on it. I also agree with the fact that 21 year olds should be on the same as a 24 year old if doing the same work but bringing that change in now seems a bit rough on small business owners.

Thats a heavy hit after a rough couple of years and a rough couple of years on the horizon.

For those of you who it will affect, what will it mean? You carry on or are redundancies/other cut backs on the cards?

This is a leak. The reality will be announced tomorrow.

 

[tony84]

It does not say allegedly or expected, it seems pretty much nailed on.

 

[MikeJ]

This is a leak. The reality will be announced tomorrow.

No it isn't. It's an interview, on camera, with the Chief Secretary to the Treasury. It's an official announcement.

 

[Ecommerce&MailOrderGuy]

Published on government website
here

 

[Ecommerce&MailOrderGuy]

As an employer I'm happy to pay it.
BUT this will push loads of firms over the edge.
Not sure if it will help push up inflation too?

 

[Mark T Jones]

Minimum wage to rise to £11.44 per hour

The new rate will apply to those aged 21 and over for the first time, the chancellor says.

www.bbc.co.uk

This does not affect me as all of my staff are on more than the new minimum wage anyway so no sour grapes or anything here...
The increase in minimum wage is great for those on it. I also agree with the fact that 21 year olds should be on the same as a 24 year old if doing the same work but bringing that change in now seems a bit rough on small business owners.

Thats a heavy hit after a rough couple of years and a rough couple of years on the horizon.

For those of you who it will affect, what will it mean? You carry on or are redundancies/other cut backs on the cards?

It's nit entirely good for those who are on it - you can guarantee that employers will be looking for ways to reduce headcount.

Whilst it won't affect me, my clients are largely in businesses that rely on lots of low- paid staff. Specifically hospitality and care

A new minimum wage doesn't only affect the minimum paid, it knocks up through the scales - they've had a pay rise, so I want a pay rise

Care - in particular State- funded residential care is a profound case. It's both essential and growing. It comes with high fixed costs (many of which have been hit hard recently) and low margins. That's a huge conundrum for any government.

I will watch with interest

 

[bodgitt&scarperLTD]

This is massively inflationary. I'm just glad to not rely upon low end labour for my profits. A lot of firms will be struggling to decide whether to press on or to reduce headcount.

 

[Mark T Jones]

This is massively inflationary. I'm just glad to not rely upon low end labour for my profits. A lot of firms will be struggling to decide whether to press on or to reduce headcount.

Perhaps it's sponsored by ChatGPT

 

[Newchodge]

It is also another way for the government to raise money - the employee pays more tax and NI, the employer pays more NI; the employee is less likely to be entitled to state benefits. The cost is on businesses and the main winner is the government.

 

[Newchodge]

No it isn't. It's an interview, on camera, with the Chief Secretary to the Treasury. It's an official announcement.

Whatever happened to instant dimissal for anyone mentioning the content of the speech?

 

[Mark T Jones]

It is also another way for the government to raise money - the employee pays more tax and NI, the employer pays more NI; the employee is less likely to be entitled to state benefits. The cost is on businesses and the main winner is the government.

May be

Given the current staff shortage I suspect it might just be a vote-grabber and a spike to Labour's guns

 

[Byzantium]

I suggest you hold cash ready to buy bonds and corporate debt because inflation is nowhere near finished and it is going to be driven up massively from wage inflation, housing inflation and services inflation and there is absolutely nothing anyone can do about it in the short term.

Interest rates will need to go up, not down and stay higher for longer.

So for now, pile into the USA equities rollercoaster as it is ready to ride, short UK equities and hold cash ready to plunge into UK fixed income once interest rates really have peaked, but not now.

 

[bodgitt&scarperLTD]

It is also another way for the government to raise money - the employee pays more tax and NI, the employer pays more NI; the employee is less likely to be entitled to state benefits. The cost is on businesses and the main winner is the government.

Very good point- this will help greatly to reduce in-work benefits. This is beneficial- it's daft that it's barely worth working any more than 16 hours a week because you are otherwise better off on the dole with no effort required.

At a glance, the cost falls upon business. The reality is that it falls upon the consumer. Buisnesses will do what they have to do to keep profits at a similar level. For example, less staff in supermarkets, more expensive products on the shelves, more self service machines. A worse experience overall for the consumer, at greater cost. Hence why I say it's inflationary.

It could also backfire on the government (and I suspect it will) by raising unemployment figures.

All a government can do is transfer wealth from one group of society to another. The government doesn't create wealth, and to be frank, nor does most of the British 'economy'. We don't sell tangible things to other countries.

 

[Newchodge]

Very good point- this will help greatly to reduce in-work benefits. This is beneficial- it's daft that it's barely worth working any more than 16 hours a week because you are otherwise better off on the dole with no effort required.

At a glance, the cost falls upon business. The reality is that it falls upon the consumer. Buisnesses will do what they have to do to keep profits at a similar level. For example, less staff in supermarkets, more expensive products on the shelves, more self service machines. A worse experience overall for the consumer, at greater cost. Hence why I say it's inflationary.

It could also backfire on the government (and I suspect it will) by raising unemployment figures.

All a government can do is transfer wealth from one group of society to another. The government doesn't create wealth, and to be frank, nor does most of the British 'economy'. We don't sell tangible things to other countries.

If the government invested in public services it does create wealth. Increase NHS pay by 15%. Tax and NI take for the government increases by 15%. Pension funds increase by 15%. Lower paid employees spend all their increased pay. much on VAT rated products so the VAT take increases. Business income increases, increasing the business tax take and enabling businesses to pay their own workers more, which in turn increases the tax and Ni take, as before . Not to mention the economic boost of people receiving needed medical treatment more quickly enabling them to return to work, come off state benefots etc etc.

 

[DontAsk]

We don't sell tangible things to other countries.

Apart from all the things we do sell, that is.

 

[SillyBill]

If the government invested in public services it does create wealth. Increase NHS pay by 15%. Tax and NI take for the government increases by 15%. Pension funds increase by 15%. Lower paid employees spend all their increased pay. much on VAT rated products so the VAT take increases. Business income increases, increasing the business tax take and enabling businesses to pay their own workers more, which in turn increases the tax and Ni take, as before . Not to mention the economic boost of people receiving needed medical treatment more quickly enabling them to return to work, come off state benefots etc etc.

A virtuous circle of government (which doesn't generate a cent) paying its staff, all private sector funded, more money? I don't follow the logic of NI/Tax take increasing by 15% as something to be lauded, when the nominal increase in tax take is much less than the norminal increase in the salary awarded, but then again %'s can confuse the best of us. We (the taxpayer) pay someone £4.5k more on a £30k salary (+15%) and as taxpayers we're supposed to then welcome the treasury then taking an extra c. £1900 in tax a year? So the difference we forget about? But its alright because these people will then spend all of their after tax increase with business which I/we then generate an "extra" profit on as a business, to ultimately pay more tax back to the treasury...as afterall if we don't pay the extra tax, how are we able to fund their £4.5K increase in the first place? So where is the dividend here? There isn't one, we just have the government handling more cash in nominal value (at a cost to administrate it with is negative drag on said cash) between public and private. the long and short of it is we're not generating a single penny to make us richer. By all means use an example of public investment like infrastructure investment to give a postive feedback loop but paying public servants more money for the same job, this isn't it. That isn't to say NHS staff don't need more in their pockets by the way, they may do so, but that isn't going to make the nation richer. The nation becoming richer is done by one means only, making products and selling services others (and preferably to other nations) want to buy. And the government should focus more energy on allowing business to do exactly that so we can fund the public services the nation needs. It doesn't work the other way around. I'd expect this economic argument is commonly heard at Momentum sub-commitees at the Labour party conference.

 

[Newchodge]

It is an argument understood by economists, who suggest that the 'multiplier effect' of investment in the NHS is around 2 to 4 times. https://www.tutor2u.net/economics/blog/nhs-investment-boosts-economic-growth

When I said that increasing NHS pay by 15 % results in a 15% increase in tax and Ni take, I meant in relation to NHS salarues. Pay someone 15% more, they pay 15% more tax and NI.

 

[simon field]

It is an argument understood by economists, who suggest that the 'multiplier effect' of investment in the NHS is around 2 to 4 times. https://www.tutor2u.net/economics/blog/nhs-investment-boosts-economic-growth

When I said that increasing NHS pay by 15 % results in a 15% increase in tax and Ni take, I meant in relation to NHS salarues. Pay someone 15% more, they pay 15% more tax and NI.

They pay their whole 15% rise in tax?

So they’re no better off?

 

[Newchodge]

They pay their whole 15% rise in tax?

So they’re no better off?

Whch part of 15% rise in tax and NI take implies the tax takes 100% od the pay rise?

Income (after tax free allowance) 100, tax = 20
Income (after tax free allowance) 115, tax = 23

 

[DontAsk]

SWMBO and I will both be paying a lot more tax for 23/24, and subsequent years, due to savings rates going through the roof, and locking in to some very good 5 year deals. I suspect a lot of other people are in the same situation and the new Labour government will be in for a bumper harvest. Lets hope they use it to pay down some debt and don't squander it on vanity, ideological, nationalisations.

 

[SillyBill]

SWMBO and I will both be paying a lot more tax for 23/24, and subsequent years, due to savings rates going through the roof, and locking in to some very good 5 year deals. I suspect a lot of other people are in the same situation and the new Labour government will be in for a bumper harvest. Lets hope they use it to pay down some debt and don't squander it on vanity, ideological, nationalisations.

What are you forecast to net out after you adjust for expected inflation vs interest rate paid? CPI was 7.92% in 2022, likely c. 6.50% this year when all is said and done. So this year and last year where accumulating interest on savings at any less = losing money. Inflation is the government's best friend for stealing more off us. And I suspect Labour will not introduce many/if any "tax increases" when they come into power as the optics are abysmal at these base levels of tax and forecast projections. Instead if they have any brains they will continue robbing us as the Tories are, by not raising income tax and NI thresholds at anywhere near the rate of inflation, or as is, freezing them altogether. Very effective way of hauling in more and more tax while claiming taxes aren't going up in % terms, given a good chunk of the UK is financially illiterate its irresistibly low hanging fruit for our overlords and I fully expect this charade to continue. One has got to laugh about this lot too, in a little over 12 months they first bang up Corp Tax to raise an extra £18bn (disproptionately impacting SMEs) and then make a song and a dance about offering about £3bn back/year in tax "cuts" to principally the country's biggest businesses.

Separately, its quite something to me people still think the Tories are "right wing" - I must be living in a parallel universe where we're actually tough on crime, have controlled borders, have low taxes and a small productive State. Don't get me wrong, I hear a lot of talk about all this stuff but absolutely zero results, in fact the opposite, what have they delivered exactly? I am not fearful of Labour anymore as after 13 years of this lot they make Gordon Brown/Tony Blair look hard right; naturally they will get absolutely annihilated at the next election as their voter base, including me, is too disgusted to turn up to vote for them (Labour will get a landslide due to apathy IME), personally am very much looking forward to handing this government their p45s, can't come quickly enough. Perhaps Tory HQ might be convinced to put up some actual Conversatives for a new government in 2029. Otherwise, the way I see it, we might as well have a government who are at least slightly more sincere, at least with Labour I'd know to expect to be clobbered, so its a bit less jarring when it actually happens.