As the UK economy settles down after the Brexit vote, businesses that employ staff in the retail sector are coming to terms with the more immediate impact that the introduction of the national living wage is having on their profitability.
The Government (or more specifically, ex-Chancellor George Osborne) set out a target for the Low Pay Commission (LPC) to hike the rate of the national living wage to 60% of median earnings by 2020.
As of writing, this figure stands at just over £9 per hour, but can and will fluctuate in the coming months and years.
This issue doesn’t rest on being for or against a national living wage, it’s about whether decisions that impact hundreds of thousands of businesses and millions of staff should be driven by evidence or politics
We do not believe that setting arbitrary targets to make political gains is the most responsible way to set wage rates, especially as the impact of the national living wage is already being felt in our sector.
Convenience store owners are already having to make difficult decisions to cope with the new rate, which was introduced for workers over 25 earlier this year.
Our national living wage survey has shown that many have cut back staff hours, delayed investment plans and taken on more hours themselves in an attempt to reduce their overall employment costs.
Our message to the Government is clear. We want to see the LPC given an independent remit, free of political pressure, to make recommendations on future wage rates that will take into account the impact on both employees and all types and sizes of business.
This issue doesn’t rest on being for or against a national living wage, it’s about whether decisions that impact hundreds of thousands of businesses and millions of staff should be driven by evidence or politics.
Let’s allow the LPC to set that rate and all the minimum rates of pay for people in the UK. We may not always agree with their decisions, but at the moment, businesses have no faith in the process for setting these rates.
Recently, ACS along with 15 other trade associations wrote to the Secretary of State for the department of business, energy and industrial strategy (previously known as business, innovation and skills), calling for the LPC to regain its independence and for a steering group to be created so business organisations can feed in the impact that wage rises are having on their members on a regular basis.
We must ensure the voice of business is heard.