In a year of continued economic uncertainty, the minimum wage increase announced(Wednesday) is irresponsible, said the British Retail Consortium (BRC).
The increase was revealed in documents published immediately after the Budget. The BRC said it is excessive, at odds with Government promises of prudence and at odds with what's happening to pay generally – with many employers forced to freeze pay to safeguard jobs.
Today's 2.2 per cent increase will take the adult minimum wage from £5.80 per hour to £5.93 in October 2010. In the year to January 2010, average private sector pay fell by 0.7 per cent while for all employees, it rose only one per cent.
The BRC supports the principle of the minimum wage as a basic floor for decent pay in the UK but it has to reflect economic realities and mustn't damage business' ability to maintain job opportunities. The BRC has been campaigning for a rise this year in the range of zero to one per cent.
British Retail Consortium Director General Stephen Robertson said: “A measure of this magnitude should have been in the Budget speech. This increase is downright irresponsible. It's at odds with Government promises of prudence and public sector freezes and will damage retailers' ability to maintain and create jobs. How can an increase virtually double last year's be justified? Economic conditions were far weaker in the run up to this year's decision than twelve months earlier.
“The BRC supports the principle of the minimum wage, but it's sheer madness to be forcing new costs on this scale onto retailers and their suppliers.”
Once the economy returns to stability, the BRC is asking the Low Pay Commission (LPC) to establish a more predictable relationship between NMW and average earnings movements - while ensuring NMW does not increase faster than average earnings. This will also mean the LPC provides a more long-term outlook for the minimum wage than the current six months, giving businesses more certainty about the direction of future costs.
British Retail Consortium (BRC)