Living wage ‘reckless’ claims retail body
The introduction of a ‘living wage’ for workers over 25 is “reckless” and will have a “significant negative impact” on the retail sector, it has been claimed.
The Association of Convenience Stores (ACS) hit out at chancellor George Osborne’s budget announcement on Wednesday that the minimum wage for the top age bracket would rise to £7.20 next year, increasing to £9 by 2020.
The increase would mean even the lowest paid fulltime workers aged over 25 will command an annual salary of £17,500 a year at the turn of the decade.
The move is believed to counter low wage levels in the UK, which has kept consumer spending down.
Mr Osbourne’s announcement, part of the first Conservative budget in 19 years, was met with cries of jubilation from the party faithful during Wednesday’s rowdy annual budget statement.
However, ACS chief executive James Lowman said the so-called ‘living wage’ would have a “devastating impact” on thousands of convenience store owners.
“This will lead to retailers having to reduce staff hours, work more hours in their business and ultimately cancel their investment plans,” he said.
“To introduce this measure with no consultation undermines the independent Low Pay Commission and is a reckless way to impose a massive burden on small businesses.”
Those aged 25 and over will receive a 50 pence premium from employers in April 2016, increasing to 60% of median earnings by 2020.
Glyn Roberts, chief executive of the Northern Ireland Independent Retail Trade Association (NIIRTA) also criticised the move, saying it will “devastate” independent shop owners.
He added that other measures in the budget to compensate employers had not gone far enough.
“NIIRTA has concerns that the proposed increase in the Employment Allowance to £3000, which is positive for independent retailers, but it is unlikely to fully off-set the increase in costs brought by the new over 25s National Living Wage rate,” he said.
Announcing the living wage plans, Mr Osbourne said “Britain deserves a pay rise”.
The Chartered Institute of Directors welcomed the plans, saying it is time companies increased pay.
