Retailers are calling for financial support to help them offset above-inflation rises to the National Minimum Wage being considered for next year.
In its 2015 remit to the Low Pay Commission (LPC) the government asked for an investigation into the “wider economic impacts of faster rises which would restore the real value of the minimum wage” and wants the LPC to assess if above-average minimum wage increases could be introduced without harming employment.
The LPC is due to report back with its recommendations in February 2015.
Sanjeev Vadha of North East Convenience Stores, which employs 350 people, said the government needed to introduce tax breaks to help businesses. “There’s little or no support for business owners,” he said. “There sho uld be tax breaks for businesses to help them continue to employ people.”
Kay Patel, who employees 25 staff at his four Best-One stores in London, also called for subsidies. “We do as much as we can to minimise costs, but we need to have staff in stores,” he said. “The government should be subsidising employers for taking on staff rather than increasing wages every year.”
David Heritage of Barns Green Village Store in West Sussex said retailers should be given financial aid to keep employing people. “We employ more than 10 people and we are told what to pay them, which impacts on our bottom line,” he said. “What about an incentive for bosses who employ people and keep them off benefits?”
Association of Convenience Stores chief executive James Lowman also expressed concern. “We are disappointed that the business secretary has set out a remit for the LPC based on a presumption that rates should increase,” he said. “Politicians from all sides are having their say on what the minimum wage should be and we fear this could undermine the robust process the Commission has developed over a number of years.”
“The government has let down small shops, who are the backbone of the economy and one of the largest sources of employment in the country.”
Scott Preston, Tagon Stores, Shetland Islands
”We need some leeway so that we pay less National Insurance contributions for employees otherwise we’ll be forced to cut hours to make up for the constant increases.”
Rishi Madhani, Today’s Stokenchurch, Buckinghamshire
The living wage
As the national minimum wage is set to increase from £6.31 to £6.50 per hour in October, pressure is also mounting on employers to pay a ‘living wage’.
The living wage is calculated to be £8.80 in London and £7.65 outside of the capital.
Labour leader Ed Miliband backs a living wage and has pledged a tax rebate of up to £1,000 for each worker for firms that pay it should the Party get elected in 2015.
Kay Patel said that while a rebate would be helpful, if he had to pay the living wage to all staff at his four Best-One stores “his business would have to close”.