Bringing forward the Living Wage timetable in tomorrow's Autumn Statement would be "devastating for businesses", the Chancellor is being warned.
The Forum of Private Business (FPB) has written to George Osborne to seek assurances that there will be no unexpected acceleration of the planned increases in wages, due to start in April next year, which it says would severely impact on labour-intensive industries such as retail.

"We were caught unawares by the announcement of the National Living Wage in the July Budget and owe it to our members to ensure that this does not happen again," said FPB managing director Ian Cass.

"It is not clear what changes the Chancellor will make to the reduction or tampering of Tax Credits but it is important that additional costs are not put on small and medium-sized employers to pay for these changes.

"Recent research from the Forum showed that in 2104/5 the cost of employment was the major increase in small business inflation and that 37% cannot pass these savings on to their customers, meaning that such increases directly impact on the ability of a small firm to invest and employ."

The letter highlights the fact that the FPB supports wage increases when they are sustainable, in other words when they are introduced as a result of improved profits. In this case this rise cannot be sustained in a number of sectors and the organisation has urged the Chancellor to cut the costs of doing business at the same time as the rises.

Mr Cass concluded: "Compliance costs for employers with fewer than 10 people are around £3,000 per person - that is the same cost as their entire Employment Allowance. Reducing the level of compliance so that businesses can be more productive is now imperative. Without such cuts, it is hard to see how employment costs can be reduced."