That George Osborne’s proposed Living Wage could reach £9 by 2020 took everyone by surprise this summer, not least the Low Pay Commission (LPC) whose remit will now have to be rewritten.
In our view it is vital that the commission should retain the power to vary wage rates according to the overall performance of the economy.
The government has done a superb job in shifting the responsibility for maintaining standards of living from themselves and onto employers. It is just as bad a deal for workers. Once the changes to benefits and tax credits begin to bite, a single person, working full time, with two children, is likely to be more than £1,000 per year worse off even with the Living Wage.
This will have a big impact on retailers’ ability to provide jobs and reinvest in their business. How much of an impact is hard to say.
Wage rates are one of the key economic areas reserved to the Westminster government, and as such the Scottish Grocers’ Federation has to work at a UK level to try to exert some influence. We have joined forces with the Association of Convenience Stores (ACS) to ensure the concerns of the c-store industry are recognised. We are collecting data from members on its likely impact and this will be fed into ACS’ submission to the LPC.
The initial results from Scotland suggest that most retailers will respond by cutting staff hours and working longer in the store themselves. A few respondents have even said the rise in staff costs might force them to close altogether. We have to make sure that this doesn’t happen.