Rises in the national minimum wage are likely to damage growth for companies in Kent, according to business leaders.

The flagship policy of George Osborne’s first budget in a Conservative-majority government was the revelation that over 25s will be paid at least £7.20 an hour from April next year.

This will rise to more than £9 an hour by 2020, the Chancellor told the House of Commons on Wednesday.

Many bosses said the introduction of the “national living wage” will have a negative impact on small and medium-sized firms.

“If you look at sectors with a high proportion of low paid people like the care industry, hospitality and retail, they are going to see a significant impact on their wage bills..." - David Bywater, KPMG

Amanda Finn, partner and head of employment at Gullands Solicitors, based in Maidstone, said: “The proposal will have a huge impact on small and medium employers whose wage bill is already the largest expense that they have.

“This raise of over 10% will either have to be reflected in price rises or staff cuts to keep their products and services saleable within highly competitive markets.”

David Bywater, partner at KPMG, who lives in Folkestone, said: “The national living wage was unexpected. There are some businesses who will have concerns about this.

“If you look at sectors with a high proportion of low paid people like the care industry, hospitality and retail, they are going to see a significant impact on their wage bills.

“Yes the corporate tax rate is coming down but over a phased period. The reduction in national insurance is pretty small.

“Some sectors will be looking at this in a lot of detail.”

Nick Paterno, managing partner of McBrides accountants, based in Sidcup, said: “The new national living wage will impact labour intensive Kent businesses such as the cleaning and security sectors, agriculture and construction.

“Coupled with auto enrolment pension measures already introduced the impact on those businesses could be game-changing.”

Jo James, chief executive of Kent Invicta Chamber of Commerce, said: “Most chamber member companies already pay their staff at or above the living wage.

“They will want assurances, however, that moves to create a national living wage follow an evidence-based approach, and minimise impacts on smaller firms, for whom adjustment will be harder.”