Trade associations representing almost five million employees have urged caution over planned increases in the National Living Wage in the next four years.
In a letter to the new Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, the industry bodies raised concerns that the current plan for staged increases in the National Living Wage would damage employment prospects in a wide range of sectors, and called for the Low Pay Commission to be handed back the power to objectively assess the impact of wage rates on businesses.
Although key food and hospitality associations such as the British Hospitality Association, British Retail Consortium and Food and Drink Federation were not signatories to the letter, other bodies including the British Beer and Pub Association (BBPA), Federation of Small Businesses and National Farmers Union were represented.
The letter called on the Secretary of State to create a new steering group to allow businesses to talk to government about the impact of the Living Wage.
“Given the current economic uncertainty, there is a real need to look at the cost challenges facing businesses,” said Brigid Simmonds, chief executive of the BBPA. “Increases in the National Minimum Wage and Living Wage are very much part of this, particularly in pubs where labour costs are high, at between 14% and 25% of operating costs. There needs to be an independent assessment by the Low Pay Commission of the economic climate and if necessary, a brake applied.”