Pressure group the British Retail Consortium (BRC) has welcomed the Government’s restraint in increase the national minimum wage by 1.9 per cent to £6.31.
Business Secretary Vince Cable announced the rise yesterday and this will come into effect in October this year, while rises were also announced for young people.
18-20-year-olds will receive a five pence rise to £5.03 from October, as recommended by the Low Pay Commission, though Cable rejected the recommendation that apprentice’s rates should be frozen, increasing the wage by three pence to £2.68 an hour.
“The Government has made a very sensible decision to show restraint by limiting this October’s increase to 1.9 per cent,” said BRC Director General Helen Dickinson.
“This strikes the right balance between helping workers on the lowest incomes and reflecting the realities of current conditions.
“We strongly support the minimum wage as a floor for decent pay. 97.3 per cent of retail employees are paid above the minimum wage but an excessive increase would have affected related pay scales and priced young people in particular out of work.”
However, the Association of Convenience Stores (ACS) went further, criticising the move as a blow for local retailers, who it warned are already struggling with rising employment costs.
Prior to the announcement, the group had called on the Government to freeze minimum wage rates for 2013-14 as its research found that increases have caused 80 per cent of retailers to reduce staff hours while 67 per cent have been forced to delay expansion or investment plans.
ACS CEO James Lowman commented: “This increase will result in reduced employment and act as a barrier to growth for thousands of local retailers.
“In the current economic climate, the right decision for businesses would have been to freeze minimum wage.”
“Our research has shown that retailers have little choice but to reduce staff hours and delay further business investment when the minimum wage is increased.”