Why the Budget rise for national living wage and job creation is desperately welcome - Emma Newlands

I remember when I got my first proper job, working in a café at weekends when I was a teenager, and which saw me paid the princely sum of £2.80 an hour.

Fast-forward to today, when Chancellor Rishi Sunak is expected to confirm the national living wage will be boosted to £9.50 an hour, from £8.91, as of April 1 next year, with similar rises in place for the minimum wage.

The national living wage was adopted by the UK Government in 2016 – long after I’d left that first job and the café long gone.

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The pay rate, which was for workers aged 25 and above, was initially set at £7.20, and was seen in part as a way of reducing reliance on “the state topping up wages through the benefits system”.

Pedestrians walk outside the Treasury building in central London. Picture: Daniel Leal-Olivas/AFP via Getty Images

Now three quarters of firms signed up to pay the living wage say that doing so has increased motivation and retention rates for staff, according to the Living Wage Foundation.

The latest increase is to be welcomed in my view, with so many people finding they have way too much month left over at the end of their money, and increasingly so amid an undesirable combination of higher outgoings regarding fuel, food, and energy bills alone.

But as a business reporter, I can see the challenges on the other side of the pay packet for firms, with higher wage bills adding to increased financial pressures such as the coming rise in corporation tax to 25 per cent.

A recent survey found one in three mid-market businesses saw the increased tax burden as a major threat to future expansion and as big a challenge as, say, cyber risk.

That said, Mr Sunak also has innovation and resulting job-creation high up on his agenda, with news of a £1.4 billion Global Britain Investment Fund, and a new £150 million fund to help thousands of smaller firms in Scotland, with the Chancellor saying the latter will help such companies “make ideas a reality”.

That will be music to the ears of those lacking the capital to turbocharge their creativity – an oft-heard complaint in Scotland – and hopefully create a wealth of jobs. Ones that I imagine will, thankfully, pay more than £2.80 an hour.

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