CUMBRIAN MPs have criticised companies that cut workers’ benefits to accommodate the new National Living Wage (NLW).

Since April 1, businesses have been required to pay employees over 25 at least £7.20 an hour, up from £6.70, a figure that will rise to £9 by 2020.

Some firms have clawed back the increase by reducing overtime payments and additional pay for working bank holidays and Sundays

Carlisle’s Conservative MP, John Stevenson, said: “Unfortunately there will be companies who cut workers benefits, which I think is a shame.

"I think it’s important for them to remember that it’s in their long-term interests to support their workers who are clearly a critical part of their business."

The NLW was debated in Parliament on Monday.

MPs passed a resolution criticising employers that "cut overall remuneration packages to offset the cost of its introduction, leaving thousands of low-paid employees significantly worse off." 

Sue Hayman, Workington’s Labour MP, said: ”I think if companies cut benefits it really undermines the spirit of the new law.

“The Budget saw cuts to corporation tax for businesses, which will bring savings. It’s as well to remember what some of their chief executives get paid. Private sector companies can also raise prices.

“The big concern is for the impact the new living wage will have on local government in these times of cuts. The Government needs to review those cuts to ensure no one is worse off."

Some supermarkets, including Tesco and Morrisons, have said they will no longer be paying Sunday and bank holiday overtime in order to fund higher basic wages.

Workers at Carlisle’s McVitie’s biscuit factory have seen similar changes to their contracts, although parent company United Biscuits has not said if the changes are a result of the NLW being introduced.

Over-time payments for working Sundays are being cut from double time to time-and-a-half while bank holidays, which were also paid at double time, will be treated as normal working days with no extra pay.

However, the DIY chain B&Q, which has branches in Carlisle, Penrith, Workington, Kendal and Barrow, has offered staff two years compensation after it cut bonuses and Sunday and bank holiday pay.

The move came in the wake of a 136,000-signature petition against the changes. B & Q will compensate staff with bonuses and pay for breaks for the next two years.