Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment his Department has made of the potential implications for its policies of the recommendations of the Organisation for Economic Co-operation and Development in its November 2016 Global Economic Outlook that caution was needed in rolling out increases to the living wage on account of their potential effect on employment.

The Government seeks the advice of the independent and expert Low Pay Commission when making decisions on the rate at which the National Living Wage is set. The Government sets the Low Pay Commission a remit to monitor and evaluate the impact of the National Living Wage. When making recommendations in relation to the National Living Wage the Low Pay Commission is asked to consider the pace of the increase, taking into account evidence relating to the economy, employment and unemployment levels, and any other relevant policy changes. The Government’s decisions on setting the National Living Wage will continue to be guided by this analysis and advice.

The Government recently announced that the National Living Wage will increase to £7.50 from April 2017. This was the rate recommended by the Low Pay Commission. Our ambition is that the National Living Wage should continue to increase to reach 60% of median earnings by 2020, subject to sustained economic growth.