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'No support' for minimum wage to be split into sectors

Recommendations that the national minimum wage be increased over five years to bring it in line with other developed countries have won broad support throughout the industry – but fears have been raised over suggestions that some sectors pay more than others.

This week saw the publication of a Labour-commissioned report into low pay by former deputy chairman of KPMG Alan Buckle. The report highlighted how the UK has “both higher levels of low pay and lower levels of productivity than our main international competitors”.

Retail accounts for 21% of all minimum wage jobs, the report said, and the UK has the highest proportion of “low paid” retail jobs in Europe – 49% of those employed in the sector, compared with 18% in France.  

The recommendations, which Labour has pledged to follow if elected in 2015, include: creating a five-year plan to bring minimum wages closer to the median level; adopting sectoral-specific rates of pay; improving enforcement of existing rules; and expanding the remit of the Low Pay Commission.

While some of the proposals – including the five-year “stretch” – have been welcomed by the industry, the idea that some sectors could pay more than others has raised concerns.

Helen Dickinson, director general of the British Retail Consortium, which consulted on the report, said: “The report considers the idea of a sector-based national minimum wage, which is something UK retailers simply cannot support.

“The reason the national minimum wage is so effective is that it ensures a basic floor for pay for all employees across the country. The idea that because you work in one sector your labour is more or less valuable than if you work elsewhere is unhelpful. Our focus should be on encouraging better pay and conditions across the UK workforce.”

Hilary Cookson, who is a former director of the British Shops and Stores Association and trustee of Bira as well as owner of Lancashire independent Maureen Cookson, said the five-year plan “appears a good idea to give firms time to plan”, but also voiced concerns about the sectoral breakdown.

“When looking at varying the national minimum wage rate throughout different sectors, should this not immediately be in effect for regions? Why is the national minimum wage in the North the same as the South, when there is a clear difference in living costs?” she asked.

“If the national minimum wage increases too much, smaller firms will not keep the differential between workers’ pay above and those on the minimum wage, and this will stagnate the drive to increase the average wage levels throughout.”

Gifi Fields, founder of supplier Coppernob, said he welcomed an increase in the base rate: “The more money that the average person has the more vibrant the economy, the more opportunities there are for all – providing we maintain competitive productivity. The naysayers were against the introduction of the minimum wage and forecasted doom. It’s the same naysayers today.”

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