The Association of Convenience Stores (ACS) has called on the Low Pay Commission to establish a new emergency brake mechanism for wage rates if increases have a negative impact on businesses and the wider market.
In an evidence session with the Low Pay Commission, ACS chief executive James Lowman highlighted the importance of the Low Pay Commission’s independence in recommending future wage rates based on its own economic analysis, rather than bowing to political pressure and arbitrary targets.
ACS has called on the commission to consider the introduction of a new emergency brake on wage increases, which would be put in place if any of the following impacts were being felt:
- A reduction in employment opportunities for low paid workers
- A shift towards more gig economy employment
- A reduction in in-work progression
- An impact on the attractiveness of entrepreneurship
- A reduction in business investment
Findings from ACS’ National Living Wage Survey 2023 have revealed that retailers have already responded to recent increases in the NLW by taking lower profits (69% of stores), reducing staff hours (56%), reducing the amount they invest in their business (50%) and automating certain processes (50%).
ACS chief executive James Lowman said: “It is essential that the Low Pay Commission continues to make recommendations for future wage rates based on independent economic analysis and detailed discussion with businesses about the impact that labour costs are having on their businesses.
“ Convenience stores provide genuine two-sided flexibility, with high quality secure, local and flexible jobs, but they are under significant pressure due to recent increases and challenges in the labour market when it comes to recruitment and retention.
“An ‘emergency brake’ mechanism to suspend uprating when wage rates have a detrimental effect on employment opportunities could prove crucial to the long-term sustainability of UK retailers and many other business sectors.”
The Low Pay Commission is currently tasked with raising the National Living Wage to reach two thirds of median earnings by 2024. This is projected to be around £11.16 per hour in April 2024, rising from its current rate of £10.42 per hour. The Low Pay Commission’s remit beyond 2024 is now being considered, with the commission taking evidence from a wide range of stakeholders including ACS.