Mitie and Morrisons back minimum wage rise

New laws mean employers will have to pay staff aged 25 or over £7.20 an hour under a new 'National Living Wage' from April

Two of the country’s biggest employers have signalled their strong support for the Government’s plans to increase pay for low-paid workers.

The outsourcing group Mitie, which employs 70,000 people nationwide, backed the state’s minimum wage rise, while the supermarket chain Morrisons announced a 20 per cent rise for its staff.

New laws announced by the Chancellor, George Osborne, over the summer mean employers will have to pay staff aged 25 or over £7.20 an hour under a new “National Living Wage” from April.

But Costa Coffee’s owner Whitbread, the clothes shop Next and pub group Wetherspoons have warned that the plan will force them to raise prices for shoppers. The Federation of Small Businesses has also called for rises to be phased in more gradually and warned that a sudden 70p rise would hurt businesses locked into long term contracts.

Morrisons, which employs about 90,000 people on the shop floor, said it would voluntarily raise minimum pay for all staff to £8.20 an hour from £6.83 currently. No age restrictions will apply.

The pressure group the Living Wage Foundation has long campaigned for rise in wages to reflect living costs, calling for basic pay of at least of £7.85 an hour across the UK and £9.15 an hour in London. It is due to review its recommended rates in November.

This month Morrisons’ German rival Lidl became the first supermarket to sign up to the Living Wage Foundation’s campaign, promising to pay at least £8.20 an hour and £9.35 in London.

Mitie, which offers cleaning services to Lloyds Banking Group, Vodafone and Rolls-Royce, among others, gave its backing to the Chancellor’s wage plan. Ruby McGregor-Smith, its chief executive, said: “It’s long overdue given the lack of increases lower paid staff have had. We represent them, and of course we back it.”

Yesterday Mitie unveiled two contracts in its homecare business with Kensington & Chelsea and Hammersmith & Fulham councils in London, worth about £25m between now and 2020. Both contracts will pay £9.15 an hour as recommended by The Living Wage Foundation.