Near 10% NLW rise would ‘add further pressures’

16-Nov-2022 - Last updated on 16-Nov-2022 at 11:01 GMT

Fragile sector: should the national living wage rise, it will put extra pressures on businesses, trade bodies have warned (image: Getty/Alphotographic)

A reported increase in national living wage (NLW) would “hit our already fragile sector hard” and “add further pressures on businesses”, trade bodies have said.

The rumoured rise from £9.50 would be an increase of 90p (9.5%) to £10.40. This is the biggest rise for those aged 23 and over for a number of years.

The Government website dates back to 2016 when the brackets were slightly different as before 1 April 2021, the NLW was for those aged 25 and over whereas now, the age has been lowered by two years.

In April 2022, the rate was £9.50 – up by 6.6% from the previous year when it was £8.91 an hour for those aged 23 and over.

Fragile sector

The British Institute of Innkeeping (BII) said while it was pleased the Government was recognising the need to support those on lower incomes, the sector had already faced huge increases to their staffing costs in recent years.

BII CEO Steve Alton added: “They are, in many cases, having to pay rates well above the NLW to attract and retain staff but there are also a host of other benefits great operators are using to look after their teams, including flexible working hours, world-class training and development and enhanced career pathways that mean staff can rapidly progress.

“Any increase in mandatory costs will hit our already fragile sector hard and many independent operators are themselves, working longer hours to cope with staff shortages and huge inflationary costs across the board.

“With the financial pressures facing them as small businesses at the heart of their community, they now need urgent support and investment from [the] Government, to allow them to be an integral part of the recovery needed for our nation.”

Increasingly difficult time

Furthermore, the British Beer & Pub Association (BBPA) chief executive Emma McClarkin highlighted how the sector would be impacted by the reported rise.

She said: “Our industry is committed to providing fair wages to attract and retain great people with average pay in our sector up by 12% compared to 6% national wage inflation from 2021 to 2022.

“However, an inevitable consequence of wage inflation is it will add further pressures on our businesses at an increasingly difficult time, with overheads for pubs and brewers already up 22% on last year.

“That is why we urgently need the Chancellor to step in and help reduce the cost of doing business throughout the supply chain so our pubs and brewers can not only survive but thrive.”