Commission recommends 3% NMW increase to £6.50
THE Low Pay Commission, the body which advises the Westminster government on the rate of the National Minimum Wage has recommended the wage should increase by 3% this autumn.
Retailer organisations have expressed concern over the proposed increase but the proposal might be seen as less than expected given that politicians of all three main Westminster parties appear to have been suggesting that substantial increases in NMW should be made to help kickstart the economy and share benefits of any recovery with those in low-paying jobs.
Business secretary Vince Cable announced the Low Pay Commission’s proposal to MPs late last month but stressed that the government had not yet made a decision on any new rate of NMW. If it were to go ahead, the increase would see the current rate of £6.31 for adults increase 19p to £6.50.
John Lee, public affairs advisor at the Scottish Grocers’ Federation, said: “We strongly urge the UK Government not to accept this recommendation.
“Local shops cannot absorb the extra cost of this above-inflation rise; government must stop adding to the cost of doing business.
“Business rates are being capped and the new Employment Allowance will reduce employers’ NI contributions but the benefit to business from these measures will be swiftly undone by this rise in the national minimum wage.
“We desperately need coherent and consistent pro-business policies from government not just giving with one hand and promptly taking back with the other.
“This rise will lead to cuts in the number of staff or reductions to their working hours. The best way to protect local jobs and encourage investment is to freeze the national minimum wage at the current level – this is what we have told Vince Cable and the chancellor.”
The Association of Convenience Stores also expressed concerns over the proposed NMW increase.
James Lowman, chief executive of the ACS, said: “We are disappointed that the commission has recommended an increase in the national minimum wage above inflation, above average earnings growth, and above public sector pay-award levels. Our research has clearly shown that retailers have little choice but to reduce staff hours and delay further business investment when the minimum wage is increased.”