Small businesses would be compensated in the event of a rise in the National Living Wage (NLW) under a Labour government, the shadow small business minister has pledged.

Speaking at the Association of Convenience Stores’ Heart of the Community event in London yesterday, Bill Esterson MP criticised the government for raising the minimum wage without assisting small businesses.

“The NLW was clearly a big increase in costs in retail, hospitality and care industries,” he said.

“We shouldn’t increase the NLW at the expense of small businesses, it is crucial there are measures in place to assist small businesses.”

He said small businesses would gain such assistance if the NLW rose to £10 per hour under Labour proposals.

However, high street minister Andrew Percy MP dismissed the idea. “I’d like to see Labour’s back-of the fag pack calculations on small business assistance,” he told delegates at the event. “The idea we can introduce a £10 minimum wage and compensate small businesses is fanciful.”

Pledging the government’s commitment to the NLW, he said: “We’ve tried to balance as much as we can – we cancelled national insurance rises and assisted with business rates.”

ACS chief executive James Lowman acknowledged the difficulty on lobbying over the issue, given cross-party support for NLW increases. “We haven’t got a magic wand on the National Living Wage. We need to manage it as a sector,” he said.

Esterson also called for an expansion of the Grocery Code Adjudicator’s role to help independent retailers by ensuring a level playing field in the industry.

“I’m afraid the GCA has been disappointing. The problem is [GCA] Christine Tacon only works three times a week with staff of five. There’s been one inquiry in 2.5 years, her office isn’t up to the job,” he said.

“The GCA should be a way of creating a level playing field for food. What happens when there aren’t enough suppliers left? The GCA needs a bigger role.”