The Association of Convenience Stores (ACS) has urged the Government to allow the Low Pay Commission to set wage rates based on evidence rather than political pressure in response to an announcement from the Chancellor.
In his speech to the Conservative Party Conference, Chancellor Sajid Javid announced plans to raise the National Living Wage over the next five years. He said: “Over the next five years, we will make the UK the first major economy in the world to end low pay altogether. To do that, I am setting a new target for the National Living Wage: Raising it to match two-thirds of median earnings. That means, on current forecasts, this ambitious plan will bring the National Living Wage up to £10.50.”
The Chancellor also committed to reducing the age at which workers are eligible for the National Living Wage down from 25 to 21.
Findings from ACS’ National Living Wage survey suggest that retailers are already taking action to deal with the most recent increase in the National Living Wage in April this year:
• 72% of retailers have reduced the number of paid working hours in their business;
• 64% have seen a reduction in the profitability of their business; and
• 52% of independent retailers have had to take on more hours in the business themselves.
ACS chief executive James Lowman said: “Convenience stores are often the only retailer left in villages and housing estates, where we offer essential services like Post Offices and free to use cash machines after specialist shops have left the market. Offering these services and a wide range of products requires significant staff time and adds up to 405,000 people being employed in our sector.
As the costs of employing people rises, well above inflation according to the Chancellor’s target of £10.50 per hour, local shops will simply not be able to survive, invest, and to continue to provide so many local, flexible and secure jobs. These jobs will either be lost or transfer to gig economy models with other businesses.
“We maintain that wage rates should be set by the Low Pay Commission based on evidence of the impact on employers and employees, and free of political pressure.”
The Low Pay Commission has been set a target of reaching 60% of median earnings for the National Living Wage by 2020. This is currently predicted to be £8.67 per hour. The current National Living Wage is £8.21 per hour.