Question

To ask the Secretary of State for Business, Innovation and Skills, what assessment he has made of the effect of the introduction of the Government's living wage on unincorporated businesses.

The Government believes that the new National Living Wage is affordable given the strength of the UK economy and labour market.

The Government will publish a full impact assessment for the introduction of the National Living Wage alongside the implementing regulations. This will contain a section on the impact on small businesses which includes many unincorporated businesses.

The Government is reducing Corporation Tax to 19% from 2017-18 and then to 18% from 2020-21; setting the Annual Investment Allowance at a new permanent level of £200,000; and increasing the Employment Allowance by £1,000 to £3,000 from 2016-17. The increase in the employment allowance means a business could employ four people on the National Living Wage and pay no National Insurance Contributions.