RETAILERS URGE OVERHAUL OF MINIMUM WAGE

27 February 2006

On the eve of the Low Pay Commission’s (LPC) imminent report to the Government (due end of February), retailers continue to call for a fundamental review of the ultimate goal of the National Minimum Wage (NMW).

The British Retail Consortium (BRC) believes the NMW has reached the ‘tipping point’ stating that an increase to £5.35 in October 2006 could lead to around 35,000 jobs being lost and will create an additional cost of £1.13 billion to the retail sector.

“Above-inflation increases in the NMW have had a serious impact on retailers of all sizes,” says Kevin Hawkins, Director General, British Retail Consortium.  “The trading climate last year and into the early part of 2006 has been tough and it is likely to remain so.  We feel the NMW has now reached a level where we need to take stock of where we are going. 

“The LPC states it wants the NMW to build on its initial success [by] producing the maximum benefit for low-paid works that can be achieved without damaging business and employment prospects.  In-depth discussion about whether the costs are now outweighing the benefits need to include a review of the future role of the LPC.

“It is crucial that in this uncertain retail climate, future increases in the NMW are kept at a level which businesses can afford to pay.”