Over the last couple of weeks, I’ve been pleased to see more companies and sectors raising concerns about the chancellor’s decision to introduce a national living wage at £7.20 in April 2016, rising to at least £9 by 2020.
I think that many businesses and their representatives were shocked by this announcement in the budget, and that includes the ACS.
Our view is that this will be a huge issue for our sector that will threaten members’ livelihoods.
We called this policy “reckless” on budget day, and I stand by that.
I can understand why many businesses were wrong-footed, but I think that the more the full impact of the living wage has been considered, the more it has dawned on businesses just how damaging this policy will be.
Let’s be clear about the impact to our sector. Marginal stores will close. In order to stay open, many stores will cut back on staff hours, raise prices, or cancel investments.
These strategies could undermine the long-term competitiveness and viability of these businesses, and because the living wage will continue to rise for at least four years, these strategies, adjustments and cost savings will be compounded year on year.
Clearly, there isn’t an easy fix here. There’s no consultation process on whether the national living wage should be introduced, and it’s such a crowd-pleaser that most of the political pressure has been for a higher living wage.
We believe that the best way forward is for businesses themselves to model the impact of the living wage and speak up clearly and publicly.
By doing this, we stand a chance of forcing a rethink in Government. Business can’t be squeamish about taking this issue on.