Budget 2015: NI business concerns over ‘living wage’

Glyn Roberts said the �7.20 living wage could have a devastating effect on independent retailers
Glyn Roberts said the �7.20 living wage could have a devastating effect on independent retailers

Within the NI business community reaction to the concept of the living wage was hesitant at one end of the spectrum and alarmist at the other.

In an economy where income levels are lower than other regions of the UK, the notion was greeted with horror by the independent retail lobby group NIIRTA.

“The introduction of a compulsory ‘living wage’ will have a devastating impact on independent retailers in Northern Ireland,” said chief executive Glyn Roberts.

“This will lead to retailers having to reduce staff hours, work more hours in their business and ultimately cancel their investment plans.”

To introduce such a measure with no consultation, he said, undermined the independent Low Pay Commission and was a “reckless” way to impose a massive burden on small businesses.

“NIIRTA has concerns that the proposed increase in the Employment Allowance to £3,000, which is positive, for independent retailers, is unlikely to fully off-set the increase in costs brought by the new over 25s National Living Wage rate.”

For the CBI, Northern Ireland director Nigel Smyth said the introduction of a living wage of £7.20 next April, some seven per cent higher than the national minimum wage, would be of concern to many businesses, and would impact on job creation.

“The CBI supports a higher skilled, higher value, and higher wage economy, but legislating for a living wage does not reflect businesses’ ability to pay,” he said.

“This is taking a big gamble that the labour market can absorb year-on-year increases of an average of six per cent.”

Ann McGregor, the chief executive of the Northern Ireland Chamber of Commerce and Industry, described the Chancellor’s Budget pronouncement on the living wage as “dramatic”.

“However, most NI Chamber member companies already pay their staff at or above the living wage.

“They will want assurances, however, that moves to create a National Living Wage follow an evidence-based approach, and minimise impacts on smaller firms, for whom adjustment will be harder.”