Minimum wage rise would hit business, warns BRC
The British Retail Consortium (BRC) has said it is extremely worried about the effect of any future rises in the minimum wage on the retail industry.
The minimum wage for over-21s currently stands at £4.50 an hour, though this is due to increase to £4.85 in October.
At the beginning of August, the Government asked the Low Pay Commission to undertake a further review of the minimum wage, with particular reference to its effect on pay structures, recruitment and competitiveness in low-paying sectors and small firms.
The Government has asked that in any recommendations for change, the Low Pay Commission should consider its likely implications, in particular the effect on employment levels in low-paying sectors and the impacts on cost and competitiveness of business and the UK Exchequer.
In its response, the BRC said that small and medium businesses have been hit by the rise, and the “whole industry would suffer if rates were to rise substantially again.”
Kevin Hawkins, the BRC’s director general, said: “We feel the Government did not fully consider its actions with the rise to £4.85 and remain concerned about the severe impact it could have on wage differentials, recruitment rates, benefit packages and redundancies. However, we are now becoming more apprehensive about what the Low Pay Commission might recommend in the future.
“The retail sector employs 2.8 million people – 11 per cent of the UK workforce. Ill thought out decisions on the minimum wage will hit retailers hard. This survey will give a clear indication of how the retail sector is affected by these rises and we will be presenting the evidence to the Low Pay Commission.”
The TUC, however, refutes claims that industry has suffered from the minimum wage. Speaking in March when the new rates were announced, its general secretary, Brendan Barber, said: “The National Minimum Wage success story has defied the doom-mongers who said it would cost millions of jobs. Since it was launched five years ago the number of people benefiting from the minimum wage has at least doubled and employment has reached record levels.”
It is continuing to lobby for a minimum wage in excess of five pounds an hour.
