Trade bodies urge caution on National Living Wage

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Eighteen trade associations representing the interests of over 388,000 businesses have written to the new business secretary urging caution over planned increases in the National Living Wage (NLW) in the next four years.

In the letter to Secretary of State for Business, Energy and Industrial Strategy Greg Clark, the group raises concerns that the current plan for increases in the NLW will damage employment prospects in a wide range of sectors, and calls for the Low Pay Commission to be handed back the power to objectively assess the impact of wage rates on businesses.

The letter has also called on the Secretary of State to create a new steering group to allow businesses to talk to the government about the impact of the NLW.

Association of Convenience Stores chief executive James Lowman said: “The Low Pay Commission should regain its powers to recommend all minimum pay rates based on economic circumstances and the needs of both employers and employees, instead of having to work to targets set by politicians.

“Retailers and other businesses are already delaying investment plans and having to make difficult decisions about the staff they employ as a result of the introduction of the National Living Wage in April.”

The National Farmers Union, which has also signed the letter, said it was worried about the impact on farmers who employ a lot of seasonal workers to harvest crops.

NFU director of Policy Andrew Clark added: “We are seeing worrying impacts on how viable these businesses will be in the future and how this will affect people being able to buy British food - fruit and veg in particular.

“The UK needs a thriving farm economy creating jobs and growth so British farmers can continue to supply high quality food the public. Wages need to be affordable for farm businesses so employment levels aren’t affected, our self-sufficiency is able to increase in fresh produce and our horticulture sector, in particular, can grow.”

Brigid Simmonds, chief executive of the British Beer and Pub Association, said: “Given the current economic uncertainty, there is a real need to look at the cost challenges facing businesses.

“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 per cent 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.”

The letter has been signed by the following associations, which represent business employing around 4.5 million people:

· The Association of Convenience Stores

· Association of Licensed Multiple Retailers

· British Beer and Pub Association

· British Holiday & Home Parks Association

· Care England

· Charity Finance Group

· Federation of Small Businesses

· Federation of Wholesale Distributors

· Forum of Private Business

· Glass and Glazing Federation

· Mental Health Providers Forum