Autumn Statement: 'It'll be businesses who are paying'

Anne-Marie Simpson says increasing the national living wage is good news, but traders will have to foot the bill

A bar owner said businesses will be forced to pay out more following the Autumn Statement, in an already tough economic climate.

Anne-Marie Simpson said Chancellor Jeremy Hunt's increase to the national living wage to £11.44 per hour was good news - but traders would foot the bill.

In the statement, Mr Hunt also announced a cut in National Insurance (NI) rates and a rise in benefits.

However, workers have told the BBC said the rise was "amazing".

'An inflationary cycle'

Ms Simpson, co-owner of Simpson Bar in Sutton Coldfield, said: "It really is probably the worst thing they could have done for hospitality at this time.

"The increases generously advised to the minimum wage aren't funded by government - they are funded by business.

"We are already paying over minimum wage for many staff; this now takes a further hit at support staff and more junior staff and just adds cost pressure onto business.

"These measures in particular are likely to increase costs to customers and take us back into an inflationary cycle."

She added: "The statement included some positive measures for individuals but feel aimed at winning individual voters rather than a deliberate set of measures to address the structural issues that we face in service industries and particularly on our high streets and town centres.

Her feelings were shared in nearby Kidderminster.

Francesca Harmon agreed the wage increase would put pressure on businesses

Francesca Harmon, who owns a hairdressers in the town said: "It is great with some of the reductions, with National Insurance being reduced from 12% to 10%

"But, on the other hand, obviously they are putting the cost of national minimum wage up.

"Great for my employed staff, but not so great as the employer that now it is an extra £1 per hour, I think, it is going up.

"So, actually, on one hand the government is giving us back a bit of money, and taking it away in the other hand."

Meanwhile, other business owners have said increasing wages was the right decision to help people.

Balka Garcha (right) is at the helm of the new Grounded Kitchen in the Touchwood shopping centre

Balkar Garcha, who has just opened Grounded Kitchen in Solihull, said it was unfair if prices kept increasing while wages stayed the same.

"We've seen wage increases before, it's just a part of the economy, a part of inflation," he said.

Mr Garcha said it was important to control costs responsibly and be a smart business owner.

"As a business owner you have to be flexible and you have to be able to take these challenges head on."

Mr Garcha added that the government's decision to continue reduced business rates were a "massive help" to the business.

Katy Hutchins said the rise would help workers with bills

But Katy Hutchins, a minimum wage worker, said she thought the wage rise was "amazing".

"That's really going to help significantly with food costs and fuel costs, as well as the bills at home," she said.