18 May 2009, 17:32 PM
  • The Government’s decision to accept the Low Pay Commission’s recommendation, raising the National Minimum Wage by just 7p per hour in October 2009, has been received with widespread approval.

The minimal rise will see retailers pay their staff an hourly rate of £5.80.

“This increase of just 1.2% has broken the pattern of recent years, when significant increases had become the norm,” says Ken Parsons, chief executive of the Royal Shops Alliance (RSA).

“We very much welcome the fact that this award reflects current trading conditions. Many rural retail businesses just cannot afford to pay staff more, however much they would like to,” he adds.

“Often shop proprietors are now earning far less than the people they employ. It is no exaggeration to say that this decision will help some shops to remain in business,” concludes Mr Parsons.

Angela Coleshill, director of The Food and Drink Federation (FDF) has also expressed her approval following the announcement. “The FDF is encouraged by the moderate increase because it’s an issue we’ve lobbied the Low Pay Commission directly on this year,” she says. “This cautious rise will be welcomed by our members who want the sector to remain competitive, ensuring its future sustainability.”

In the past, the minimum wage has risen faster than the average rate of wage inflation. Retailers are pleased that this year’s change takes into account the exceptionally tough trading times of the last 12 months. “The more prudent approach makes a lot of sense at this time,” says Ms Coleshill.

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