Retailers and industry bodies across the UK are divided over the introduction of a national living wage, as announced in today’s budget.
Speaking at the House of Commons, chancellor George Osborne said Britain “deserved a pay rise” and that a national living wage of £7.20 per hour would become compulsory for over-25-year-olds from next April, increasing to £9 by 2020.
Independent retailers were sceptical of the proposals, with some saying the £9 per hour rate was too high for small businesses.
Darren Hoggett, co-owner of independent J&B Menswear in Norwich, said: “It is a bit optimistic and unwise to set such a high target for just five years down the road. It might put people off taking on more staff and some businesses might struggle.”
Fran Bishop, co-owner of kidswear outlet Pud, which has three stores across Nottingham and Doncaster, added: “I think as long as the economy is doing well businesses can afford an increase. However, a pound here and there across several stores can add up and the onus shouldn’t always be on the employer to foot the bill. The government should incentivise retailers to employ more staff by taking the costs from elsewhere like business rates, which didn’t get a mention.”
Simon Poole managing director of menswear brand and retailer Luke, which has five stores, said: “I hope [the living wage] aids the independent as we pay more- it is the large multiples that are paying the minimum wage, and they are getting big government subsidies by way of their staff’s wages being supported by family credits which we are all helping to contribute to.”
Osborne said the living wage would have only a “fractional” effect on jobs and would cost businesses 1% of profits. This will be offset by a cut in corporation tax from 20% to 19% in 2017 and to 18% in 2020.