Minimum wage increase 'comes at a cost for business'

John Brown says increased wages will come at an "extra cost for businesses"

Business owners in the south west have warned The Chancellor's new Budget could cause issues for the hospitality sector.

Chancellor Rachel Reeves' announced frozen personal tax thresholds until 2031 and a rise in the national minimum wage on Wednesday.

Cornwall Chamber of Commerce CEO John Brown warned the increase in minimum wage would come at "an extra cost for businesses".

The Chancellor also announced taxes on homes worth more than £2m and £5m, a mileage charge for electric vehicles and tax on pension contributions above £2,000. She said there would also be support for Cornwall's industrial sector, including a £30m Kernow Industrial Growth Fund.

Workers aged between 18-20 will see a minimum wage increase to £10.85 an hour, up from £10, and those aged 21 and over on the living wage will receive £12.71 an hour, up from £12.21.

Teenagers aged 16 or 17 on the minimum wage will be paid £8 an hour - a 45p raise.

Mr Brown said businesses needed more support with the rising wages.

He said: "There is nothing wrong with wages going up - that's a good thing for everybody, we want workers to be well rewarded.

"We need to also balance that out with some incentives, some opportunities and some relief for organisations so that they can not just pay better wages but actually keep people in work as well."

Tom Watson said he employed a lot of seasonal workers at his business

Tom Watson, a sausage stand owner in Devon, said an increase in minimum wage was welcome but could also put his business in a tricky situation.

He said: "It's massive, we employ a lot of young people and a lot of people on minimum wage.

"The nature of the business that we run is we have a lot of temporary staff coming in seasonally.

"It's a choice between us growing and taking on more staff and being careful about how many we take on and therefore saving ourselves money by not growing."

Tim Ball, owner of Bar Buoy Cocktails in Exmouth, said he was "relieved" alcohol duty had not increased but had "slight concern" over wage increases.

He said: "I am delighted for staff that they do get the increase, but for operators, whether it's retail or hospitality venues, I do have some concern of their ability to continue to keep their workforce fully employed."

Becky Martin said wage increases were a "tiny step in the right direction"

Exeter resident Becky Martin said the increase was "a minutely good thing" and a "tiny step in the right direction".

She said: "I think the youth in this country are already too disenfranchised - not motivated by any little gesture the government gives because times are just too hard for us right now.

"There's people that can't afford to live in the city they were born in - I can't afford to move out of my mum's house and I'm not even on minimum wage, I'm paid more."

The Chancellor has also announced that the two-child cap on means-tested benefits would also be lifted - currently parents can only claim universal credit or tax credits for their first two children.

This will be scrapped in April 2026, meaning those with three or more children will receive more in universal credit and tax credits.

Parents at a playgroup in Penryn said the cost of their food shop had doubled or even tripled in the last couple of years.

Kate who runs the playgroup, which also provides free clothes, equipment and toys for children under 5, said demand was soaring.

She said: "I think we've really noticed an increase in working families - families that previously were donating to us are now coming to get things from us.

"People are having to choose between heating and eating and I think demand is growing for our service."

Wailim Wong from Citizens Advice Cornwall said demand for its services had never been higher and, in the last year, the service saw 7,000 people in Cornwall alone.

He said: "Ever since lockdown really, it's been at that level - really, really high demand, people's issues are getting more and more complex.

"They're not coming with just one thing - they can't afford to pay the rent because they're in debt and they're in debt because they're not getting the benefits they're entitled to."