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Retailers are warning of the potential impact caused by the impending increase to the National Living Wage (NLW) and National Minimum Wage (NMW).
It follows the closure of the Low Pay Commission (LPC), a consultation by an independent body that advises the Government on NMW and NLW recommended rates. The LPC is expected to give its recommendation in October of this year, for rates that will come into effect from April 2021. It is working towards the Government’s request for the NLW to reach two-thirds of median earnings by 2024. This comes after chancellor Rishi Sunak confirmed his spring Budget that included an increase in the UK NMW from £8.21 to £8.72 as of 1st April, 2020.
Many business owners have voiced their concerns about the rise, fearing that if trade returns to pre-coronavirus levels, the increase will be passed on to the customer through increased prices. Others fear that as companies will be unable to afford the expense following the coronavirus crisis, it will lead to a surge in redundancies.
Earlier this month, the Association of Convenience Stores (ACS) hosted a roundtable to assess the impact of the rise on retailers. The group provided written evidence to the LPC in June, and plans to give oral evidence in July.
ACS chief executive James Lowman said: “Local shops have done a phenomenal job in adapting their businesses to ensure that they can continue to serve their communities while keeping their colleagues and customers safe. Employment costs are one of the biggest operational challenges for retailers who are already under immense pressure as a result of Covid-19. It was extremely useful for our members to share these experiences directly with Low Pay Commissioners.”
Whilst LPC’s consultation closed on 4th June, due to the current circumstances, the group is continuing to accept written evidence. In particular, the body is looking for evidence on the affordability and effects of an increase and views on the remit to 2024. Those who wish to submit evidence can download the consultation letter here.
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