Traders issue warning on National Living Wage increase
Published:  01 August, 2016

The National Federation of Meat and Food Traders (NFMFT) has joined forces with other trade associations to express concerns over potential increases to the National Living Wage. 

The trade bodies, which represent 388,000 businesses that employ more than 4.45 million people, have written to Secretary of State for Business, Energy and Industrial Strategy Greg Clark, urging caution over planned increases to the wage over the next four years.

The current rate is £7.20 per hour, however the government has set a goal of increasing it to over £9 per hour by 2020. The group of trade bodies feel this will damage employment prospects and urged the Low Pay Commission, an independent body that advises the government about the National Living Wage and the National Minimum Wage, to “exercise caution”.

It states: “We are all advocates of better wages for the lowest paid in society but we also have a responsibility to highlight the difficult choices employers will have to make as the National Living Wage and other employment costs increase.

“We have engaged with the Low Pay Commission’s consultation process on the path of the National Living Wage and shown from our detailed research that labour-intensive businesses will be negatively impacted by the proposed wage increases. As a result, our members are having to revise their growth, investment, and employment plans as wage rates increase. We recommend that you and the Low Pay Commission exercise caution when setting future rates to reflect the economic uncertainties the country faces over the coming years.”

The group also puts forward the idea of creating a new steering group to allow businesses to talk to government about the impact of the National Living Wage, and that the Low Pay Commission be given the power to “objectively assess the impact of wage increases on businesses, and recommend future living wage and minimum wage rates with regard to their impact on employment opportunities.”

Speaking to Meat Trades Journal, NFMFT technical manager Richard Stevenson said: “Craft butchers do not object to the government’s living wage policy and we support better wages generally.

“However, we are concerned that the policy could be implemented too quickly and without taking into account the impact on small businesses, particularly if the economy was to suffer further slowdowns. Wages are a large part of small business overheads in retail and other service-orientated sectors and large increases at the wrong time could have devastating consequences.

“We were therefore pleased to join this group consisting of the leading organisations representing small businesses in a wide range of sectors.”

Andrew Clark, National Farmers’ Union director of policy, added: “The UK needs a thriving farm economy creating jobs and growth so British farmers can continue to supply high-quality food to the public. Wages need to be affordable for farm businesses so employment levels aren’t affected.”

The letter has been signed by:
• The Association of Convenience Stores
• Association of Licensed Multiple Retailers
• British Beer and Pub Association
• British Holiday & Home Parks Association
• Care England
• Charity Finance Group
• Federation of Small Businesses
• Federation of Wholesale Distributors
• Forum of Private Business
• Glass and Glazing Federation
• Mental Health Providers Forum
• National Care Forum
• National Day Nurseries Association
• National Farmers Union
• National Federation of Meat and Food Traders
• National Federation of Retail Newsagents
• Rural Shops Alliance
• Textile Recycling Association